Declining consumer confidence, esepcially among the less well-to-do luxury consumers, results in drop of more than 20 percent in average amount spent on luxury
Luxury consumers' feeling of confidence tanked in the third quarter as measured by Unity Marketing's Luxury Consumption Index. The index plummeted to 87.3 points, its lowest level since 2004, following a 4 point drop in the second quarter. The index is based upon an October survey of over 1,000 luxury consumers (average income $150,200 and age 43.6 years) tracking their buying preferences and spending patterns.
Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, said "Two quarters' steady decline in the Luxury Consumption Index predicted a cut in luxury consumer spending, which is exactly what occurred in the third quarter. The amount spent by affluent consumers on luxury dropped 21 percent from an average of $15,283 in the second quarter to $12,142. This is the steepest decline since the fourth quarter of 2004 and it brings the average spending of luxury market consumers to its lowest level since second quarter 2005."
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The market for luxury goods, services, and experiences is growing ever more competitive. As the luxury consumer market continues to heat up, market research is no longer an option; it is an absolute necessity. The fact is: The luxury marketer with the most knowledge wins!
Luxury marketers need to know all there is to know about their customers and potential customers. They must stay vigilant in tracking the shifts, turns, and changing preferences among the affluent consumer market. They need up-to-the-minute data, as well as a historical perspective, to anticipate the next major luxury business opportunity or branding challenge. But conducting the regular, routine research needed to identify shifts in the luxury market is extremely costly and time consuming.