Luxury Consumer Confidence Rises and So Does their Spending
A Rise in Affluent Consumer Confidence Results in Their Spending More on Luxury in the Fourth Quarter
"The uptick in this quarter's LCI reveals a more positive outlook among affluent consumers about the economy at large, as well as increased optimism about their personal economic situation," says Pam Danziger, president of Unity Marketing and author of the upcoming book, Putting the Luxe Back in Luxury. "Affluents backed up their growing confidence by spending 4.1 percent more on luxury goods and services in the fourth quarter as compared with the same period last year."
Luxury categories that posted strongest growth year-over-year as measured by the average amount spent by affluents, included:
Luxury cook's tools, kitchenwares and housewares -- A popular gifting category where demand was strong for high-end kitchen appliances (food processors, juicers, espresso machines) and cookware purchased at specialty gourmet cooking stores.
Electronics, including high-end televisions for the home and personal electronics where digital book readers were a hot gift item.
Travel, where demand for luxury cruises remains strong and affluents are motivated by the desire to create special memories.
On the latest luxury consumer survey results, Tom Bodenberg, Unity Marketing's chief consumer economist, said, "While we may not see the boom times of 2003-2007, the current LCI shows an increase from the previous quarter, and may signify that the recent bump in retail demand may be sustainable. Closer analysis reveals that despite a noted reduction of market pessimism, this has yet to FULLY translate into increased demand -- so, while there are and will be an increase in the index, the pace will not pick up until the marketplace reduces its 'hold 'em' mentality"
The latest luxury consumer survey results are published in Unity Marketing's Luxury Tracking Report 1Q2011 -- The latest report on what luxuries affluents are buying and how much they are spending. The survey was conducted January 6-13, 2011 among 1,237 affluent luxury consumers (average income $308,700; median net worth $861,000; age 43.9 yrs; 42 percent male and 58 percent female).
About Unity Marketing's Luxury Tracking Study
Launched in January 2004, and every three months thereafter, Unity Marketing has measured the pulse of the affluent consumers in a longitudinal survey of 1,200+ affluent consumer households. One-third of each survey is comprised of ultra-affluents (HHI $250,000 and above).
Each quarter the Luxury Consumer Tracking Study reports what luxuries they bought during the past quarter, how much they spent, where they bought, the luxury brands they became aware of and used, and how they felt about their current and prospective financial status. A total of 22 major categories of luxury goods and services are included in the poll, including clothing, fashion accessories, home luxuries, travel, dining and jewelry.
Based upon the results of the survey, Unity Marketing also publishes a Luxury Consumption Index which tracks how luxury consumers feel and helps marketers anticipate consumers spending in the coming quarters.
In addition every quarter a special investigation of key trends in the luxury market are studied. In the current quarter luxury consumers and their values are studied. The findings of this special investigation is available as a separate trend report) or as part of the full Luxury Tracking Report.
Special Investigation: Luxury Consumers & What They Value Most
As each wave of tracking studies is fielded, special topics of interest to luxury marketers are researched in more depth and published in a separate trend report. In the third quarter 2010 Unity Marketing's Luxury Tracking Study investigated luxury consumers and how they use the internet, social media and mobile devices in their luxury lifestyles.
This investigation answers these critical questions about today's online environment so that luxury marketers can develop their online marketing strategies, including how best to use social media for building their brand and how to tap the rising power of mobile apps to connect with the affluent shopper:
How often do affluent consumers use the Internet in support of luxury goods and services purchases, what do they buy online, how much do they spend?
And key for marketers today, how the affluent customers are accessing luxury online -- via computers or mobile; through company websites, social media or through mobile apps?
When do they turn to the Internet and why they use it?
What are their favorite luxury websites and what specifically do they value about their favorite websites?
What turns them on about using the Internet for luxury purchasing and research?
The new report tracks the trends in affluent's use of the internet. It compares the most current 2011 data with data gathered during 2010, 2007, and 2005 to paint a picture of the changing landscape of online action and interaction.