Luxury Consumers Are Cutting Back And The Consumers' Age Is Key To Where They Make Their Cut Backs
Unity Marketing's Luxury Tracking Study Finds Young Affluents And Those Over 40 Choose Different Priorities For Reducing Their Luxury Budgets
With affluent consumer confidence about the U.S. economy and personal fortunes rocky during the early months of 2008, luxury marketers increasingly must target their message to the segment of affluent consumers most likely to make a purchase of their goods and services. Marketers can't afford to take a 'one-size-fits-all' approach to marketing to an increasingly diverse luxury consumer market.
In the past the young affluents (those high-income individuals aged 40 years and younger) have been the most exuberant purchasers of all things luxury, spending nearly one-third more on luxuries than those over 40 years old in 2007. However, the two age groups are showing distinct differences in how they spend their luxury budgets now that they are making more careful decisions and being more cautious about their spending.
“The weak economy is hitting the different age segments in the affluent market in surprising ways,” says Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience. “Most notably, older affluent consumers are spending more on luxury goods that will last, while young affluents are more likely to splurge on luxuries that give a more immediate gratification.”
Young Affluents Choose 'One-Time' Luxuries, While Older Consumers Choose Those That Will Last
According to Unity Marketing most recent survey of the affluent consumers, young affluents spent significantly more than older consumers on purchases of garden/outdoor luxuries, fashion accessories, wine and spirits and travel.
By contrast the older affluents spent significantly more than young affluents on investment-type purchases, specifically luxury goods that are likely to hold their value and even increase in value. So they spent more on art and antiques; home decorating fabrics, wall and window decor; jewelry; and watches. This is based upon the findings of a survey among 1,258 luxury consumers conducted early April, 2008 (average income of all those surveyed was $173,400 and average age 45.9 years).
"Young affluents are still building their luxury lifestyle as they enter their prime-earning years, so they are more likely to purchase luxuries they can enjoy immediately, such as a wonderful piece of outdoor furniture, a high-end handbag, a vintage bottle of wine, or the trip they have been longing to take," says Danziger.
“Consumers over 40, on the other hand, are more likely to have already invested to build their luxury lifestyle. When economic pressures come to bear, they are most likely to restrict their luxury purchases to goods and services that will help them protect their investment in their luxury lifestyle. A new piece of art, a home remodeling project, or a luxury watch or piece of jewelry are all things that will bring pleasure now and hold or even increase in value over time."
Luxury marketers' new challenge: Overcome resistence of cautious consumers by creating urgency to buy now
Danziger advises, "The future for luxury marketers and luxury brands ultimately rests on how well they anticipate the passions and appetites of the newly emerging young affluent consumers. They need to 'think young' in order to understand the young affluents and to position their brands for the future, both for the short and the long term.
"Today in a tight economy where affluent consumers are feeling the pinch, younger affluents are opting to spend more on luxuries that give an immediate lift, while the more mature are making longer-term investment purchases. That finding suggests that luxury brands that want to capture the young affluent segment need to increase the urgency associated with a particular purchase, such as offering products in limited editions, limited-time introductory prices and special sale events all focused on getting young affluents to act now and not to wait and contemplate," Danziger concludes.
Track Future Shifts in the Luxury Market Before They Actually Start to Impact Your Business
Unity Marketing's premier service for luxury marketers and retailers is its quarterly Luxury Tracking study. The syndicated Luxury Tracking study gives luxury marketers the ability to anticipate the ups and downs in the market in the only longitudinal luxury panel research study of its kind.
The Luxury Tracking study is a cost-effective way for luxury marketers to monitor their brand and competing brands' usage among their target market. Luxury tracking gives marketers the data they need to predict changing patterns of affluent shopping consumer behavior before it occurs, so they are ready with new products and marketing initiatives before the changes and shifts in consumer behavior start to gain traction.
The Luxury Tracking study is a vital tool to gain more insight and understanding about the luxury market from one of the world's foremost experts on the mindset of the luxury consumer, Pam Danziger, president of Unity Marketing and author of Let Them Eat Cake: Marketing Luxury to the Masses -- as well as the Classes (Dearborn Trade Publishing, January 2005).
About Unity Marketing's Luxury Tracking Study and a Special No-Risk Trial Offer for New Subscribers
New subscribers to the Luxury Consumer Tracking Studycan take advantage of a special no-risk offer on a trial subscription to the service that can be rolled over into a full year of the service at a reduced cost. New subscribers may purchase a trial of a single quarter of the study for $2,500, which will include customization of the tracking study to fit your product and brand preference needs. This offer carries no commitment to subscribe for the usual year.
Once the subscriber experiences the powerful insights available in the Luxury Consumer Tracking Study, they may subscribe for an entire year (an additional four quarters) for $10,000 -- that is a 25 percent savings off the normal annual subscription cost of $12,500.
New subscribers will therefore get five quarters of luxury tracking for the normal list price for four. In effect, you will receive one a quarter for free.
What Luxury Tracking Subscribers Get:
Subscribers will receive:
- Luxury Tracking Study quarterly analysis report of what 1,000-1,250 affluent consumers bought in the past three months, what they plan to buy in the next three months, how much they spent and their brand preferences. Each subscriber will have their brands and up to five or six key competitor brands included in the survey. The survey questionnaire is also customized to each subscribers specific product and service categories.
- Luxury Market Report, 2008 - Who Buys Luxury, What They Buy, Why They BuyYear-end summary of luxury consumer purchases and spending, covering trend years 2006-2007 consumer purchases. This annual report represents a $3,500 value.
- Access to Unity Marketing's affluent consumer survey panel Subscribers can access this affluent consumer survey panel for customized market research projects. Costs to be calculated separately.
- Half-price discount on all other Unity Marketing reports ordered.