Luxury Marketers and Retailers - Will You Recognize Your Post-Recession Affluent Customer?
Will You Recognize Your Post-Recession Affluent Customer?
New Unity Marketing report details attitudes and motivations of the new luxury consumer
Have you been scanning the luxury horizon, looking for signs of those "green shoots" that signal the regrowth of the market after the recession? If so, be aware that you may not recognize the new species of luxury consumer that will make up your new, much-changed target market.
The current recession has greatly altered the luxury marketplace, likely for good, reports Pam Danziger, president of Unity Marketing and author of a new research study of the changing mindset and priorities of the luxury consumer. Danziger says, "The 'new normal' luxury consumer is more cautious, with a changed personal definition of luxury that values meaning over status. This is a brand-new luxury consumer, and marketing to him or her will require a completely different approach that speaks to these changed values, priorities, and desires.
The new Unity Marketing report, Luxury Consumers' Attitudes and Motivations Report: A Study of the 'New Normal' Luxury Consumer Market After the Recession, is based upon insights gathered in focus groups held in Beverly Hills -- 'ground zero' for the old conspicuous consumption lifestyle -- as well as surveys among 2,049 luxury consumers (average income $196,974).
Among the key findings that signal a profound and lasting change in the attitudes of affluent consumers regarding their luxury lifestyles:
For most affluents luxury is best enjoyed as an occasional pleasure, rather than part of one's everyday life experience, as 80 percent of those surveyed agreed, "I've been lucky to enjoy certain luxuries in my life, but luxury is not a part of my lifestyle."
Luxury brands have to deliver exceptional quality and value to affluents; they can no longer rely solely upon their brand name or reputation, as 84 percent of affluents agreed, "I don't mind paying more for high quality products, but I don't want to pay a lot just for the luxury brand name."
A cultural shift is taking place among those with means away from luxury indulgence toward a more conscious, careful consumer mindset. The end result will be people unlikely to pay such high prices again for luxury, as half of those surveyed agreed, "Even after the economy improves, people aren't going to go back to buying luxury like they used to."
Danziger says, "This study was prepared to help luxury marketers delve into the new mindset, priorities and values of the affluent consumer. The research found a dramatic shift in affluent consumer consciousness away from conspicuous consumption toward a more thoughtful, reserved, careful way of shopping and buying. The essential question for luxury brands, luxury marketers and luxury retailers is how to make the most of these changes in the target customer."
"This study contains more than 30 'take action' call outs that translate the research findings into recommendations for new luxury marketing strategies and tactics. So the report is not just a research study, but a call to action for marketers," Danziger concludes.
Introducing the Luxury Consumers‚ Attitudes and Motivations Report
Unity Marketing introduces its first in-depth attitudes and motivations study of the luxury consumer market. In this new study, Luxury Consumers' Attitudes and Motivations Report: A Study of the 'New Normal' Luxury Consumer Market after the Recession, Pam Danziger, Unity Marketing's lead investigator, probes the mindset of today's luxury consumer to uncover the keys to marketing effectively in the future economy.
This report is filled with facts and figures, but it doesn't stop with the data -- It pushes further to help marketers and retailers put the information and insights to use. The goal is to translate research-based findings into information that marketing executives can use to make critical strategic and branding decisions.
The underlying premise of this study of luxury consumer attitudes is simple: Changes in consumer behavior -- what they buy and how much they spend -- follows changes in their attitudes -- why they buy. This report focuses on affluent consumers' underlying attitudes and motivations in their luxury purchases and luxury lifestyles. It examines how affluents are responding to the current recession, as well as their overall feelings, attitudes and motivations that drive them to pursue a luxury lifestyle. The goal is to understand how the affluent consumers' mindset and psychology is making over the luxury market and creating a 'new normal' for luxury marketers in the future.
Specifically, the research goals of this study are to:
Understand what luxury means to affluent shoppers today and whether their concept of luxury has changed since the recession began;
Explore consumers' perception of their favorite luxury brands and whether they are trading down to less expensive brands;
Define what 'value' means in the consumers' shopping psychology and how affluents interpret 'value' when considering a particular purchase;
Understand how sale prices and discounts influence luxury consumers in purchases of both luxury goods and services;
Learn how the recession is changing these luxury consumers' lifestyles;
Compare luxury consumers' overall attitudes about their luxury lifestyles today with how they felt in 2007, prior to the recession and economic crisis;
Identify the personalities that make up the current luxury market; and
What the changes in luxury consumers' attitudes and motivations mean for the future of the luxury market.
Being forewarned is forearmed -- This study gives marketers data and insights they can use to plan for the future
The past two years have been a period of dramatic change in the consumer economy overall. High unemployment, decline in the housing market, and the global recession have hit consumers at all income levels, but uniquely in this current market it has caused dislocation and distress among the affluent consumers, defined as those with incomes corresponding to the top 20 percent of U.S. households with average income of about $200,000.
In times of dramatic changes like these, many analysts look to the past and what happened in other recessions to help predict the future. But the fact is no previous recession has been anything like this one, so past behavior can't predict the future.
Unity Marketing has a proven history of helping marketers prepare for upcoming change in the luxury marketplace. Unity Marketing predicted the downturn coming in the luxury market starting in the middle of 2007. That was long before the luxury retailers started to measure the effects of recession in reduced customer receipts. Retailers didn't discover the downturn until one-to-two quarters later (4Q2007), and it took even longer for marketers to feel the effects, roughly another quarter or more after retailers started to cut back on their orders (mid-2008). Unity Marketing gave its clients early warning of troubles brewing so they have plenty of advance warning to take steps to cushion the blow.