Monday, November 26, 2012

Luxury Consumers Exhibit New Confidence

Affluent consumer confidence had a strong upturn in the third quarter, according to an on-going tracking survey of luxury consumers by PMP author, Pam Danziger.  As a result, luxury consumers picked up their pace of shopping in the past quarter, with luxury spending up 25.8 percent over last quarter.  This according to Unity Marketing's Luxury Tracking Survey conducted October 9-15, 2012 among 1,289 affluent consumers (avg. income $290.6k; avg. age 44 years.)

"The first half of 2012 showed affluent consumers restrained in spending on luxury goods and services, but spending rebounded strongly in the third quarter survey,"  Pam Danziger, president of Unity Marketing and author of Putting the Luxe Back in Luxury:  How new consumer values are redefining the way we market luxury.  "Over half (52 percent) of affluent consumer surveyed feel they are financially better off today than twelve months ago; this measure hasn't been this high since 1Q2011.  Rising even more sharply is the percentage of luxury consumers who feel the country as a whole is doing better now as compared with three months ago.  Some 37 percent of affluent surveyed feel the country is now moving in the right direction, up 15 percentage points from last quarter," Danziger reports.

Rising affluent consumer confidence is sparking a pick up in spending on luxuries, with these categories posting the strongest quarter-over-quarter increase:
  • Luxury clothing and apparel, with spending up 95.2 percent over second quarter;
  • Luxury kitchenware and cooks' tools, up 83.1 percent;
  • Luxury beauty, cosmetics, fragrances, up 75.4 percent;
  • Luxury dining, up 67.7 percent; and
  • Luxury fashion accessories, up 52.2 percent.
"Throughout 2011 and 2012, we have seen luxury consumer spending mostly on a downward trajectory, with their feelings of consumer confidence as measured by the Luxury Consumption Index (LCI) wavering over the same period.  Finally in the latest survey, we see a strong measure of growing confidence which should give marketers from high-end to mid-market a boost.  After all the affluent consumers we survey are the economy's 'heavy-lifters,' accounting for only 20 percent of U.S. households but over 40 percent of all consumer spending,"  Danziger explains.

Unity Marketing has been calculating the LCI since first quarter 2004 based upon five key measures of luxury consumer confidence including their expectations for future spending on luxury, their personal financial conditions and their overall assessment of the economy as a whole, in surveys conducted every three months among over 1,200 affluent luxury consumers.  This quarter's luxury tracking survey, conducted from October 9-15, 2012, took the measure of 1,289 luxury consumers (average income $290.6k; avg. age 44 years; median net worth $797k.)

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