Luxury Report 2013: The Ultimate Five-Year Guide to the Luxury Consumer Market
Unity Marketing's annual report on the state of the luxury market, including a five-year trend analysis, has just been released
Affluents in the Driver's Seat of U.S. Economy
As consumer spending rebounds, the affluent consumer segment is supporting brands aiming high and low, and everywhere in between
STEVENS, PA; April 9, 2013 -- The financial news is full of reports of rebounds in retail and consumer spending, but this post-recession growth is not occurring uniformly across the economic segments. Rather, it is the affluent consumer who is increasing his or her spending, with much of the increase coming from those making $100,000 to $249,999 per year, a segment known as the HENRYs (High Earnings, Not Rich Yet). This is according to the Luxury Report 2013, the newest research report from Unity Marketing covering five years (2008-2012) of affluent consumer behavior in the luxury market.
"I think the most important shift in the economy at large is the growing importance of the affluent (top 20% of U.S. households by income which represent about 24.2 million households) in driving the recovery," says Pam Danziger, president of Unity Marketing and author of the new report. "The middle-class and lower-income folks have greatly reduced spending power, due to tax changes, unemployment, etc. so the affluent heavy-lifters are behind all the news about retail and consumer spending growing. If you dig a little deeper into the numbers you find it is the affluent behind all the good economic news."
Specifically, it is the HENRYs who are driving much of the improvement in the luxury goods and services markets. By 2012, the HENRYs had brought their spending levels back up to 2009 levels, even topping those by 3.4 percent. Even though HENRYs individually have a far lower spending threshold than ultra-affluents, there are about ten HENRY households for every ultra-affluent. That is why, with a total of 21.8 million households, the HENRY segment is a critically important part of the consumer market.
While the HENRYs have picked up the pace of high-end purchases since 2009, the ultra-affluents, those at the top 2 percent of incomes of $250,000 and above, have gone in the other direction. Ultra-affluents spending on luxury since 2009 dropped 14.1 percent and in 2012 it reached its lowest level in five years.
Danziger says, "The last study shows the ultra-affluents are starting to behave more like the HENRYs. For example, ultra-affluents cut back their purchases across the carefully curated list of top luxury brands included in Unity's survey in clothing, fashion accessories, beauty, jewelry and watches. That means even the high-income ultras are trading down to less premium brands. Further in 2012 Zales bumped Tiffany out of first place as ultra-affluents' jeweler of choice."
Ultra-affluents taking on the economical purchase behavior of the HENRYs
Looking to the future Unity Marketing expects affluents to continue to be strategic in their purchasing by making tradeoffs that will maximize the luxury return on their investment. Increasingly affluents are making strategic choices about which purchases will give them the most pleasure and which situations demand a true luxury brand purchase. For example, ultra-affluents purchased more mass-market beauty brands (L'Oreal Paris, Olay and Cover Girl) than luxe brands (Clinique, Lancome, Chanel) in 2012 and their purchase overall of mass brands reached its highest level since 2008.
"Affluents are still cautious about spending on high-priced luxuries and are being strategic, like swapping high-priced Chanel lipstick for Cover Girl. They are also indulging in more what I call 'premium' class goods and services -- below luxury, but better than mass - so for ultra-affluents the more affordable Ann Taylor is the most purchased luxe apparel brand and premium, not luxury priced Coach tops the list in luxury fashion accessories brands," Danziger says.
"Also, they are picking and choosing what works for them, like our recent study of travel trends where affluents get to their destinations the cheapest, most cost-effective way, but once they are there, they are willing to indulge in four-five star luxury hotels and dining experiences. That is, they are trading up and trading down strategically based upon what gives them they greatest return on their spending investment," Danziger explains.
Understanding the complex behavior exhibited by affluents is the first step in capitalizing upon this bright spot in the U.S. economy. The Luxury Report 2013 shows you how.
More about The Luxury Report 2013
The Luxury Report 2013: The Ultimate Five-Year Guide to the Luxury Consumer Market compiles the results of five years of quarterly luxury tracking surveys that Unity Marketing conducts every three months with ~1,200 affluent consumers who purchased one or more luxuries in the study period. Unity's luxury tracking study is the only longitudinal study of its kind that tracks the luxury consumer market, what they buy, how much they spend.
The Luxury Report 2013 examines consumers' buying behavior and spending habits in four key categories of luxury:
- Home Luxuries, such as kitchen appliances, bath fixtures, art and antiques, furniture, tabletop, decorative home furnishings, electronics and more
- Personal Luxuries, including fashion, beauty, jewelry and watches
- Experiential Luxuries, such as travel, fine dining, physician services and spa and beauty services.
The report contains details on 21 luxury product and services bought by affluent consumers, including annual spending, where these products were purchased and details of the types of products and services bought.
The Luxury Report 20123 is written by Pam Danziger, an internationally-recognized expert on the luxury market and is based upon the kind of in-depth consumer research for which Pam Danziger and Unity Marketing are known.
Guides luxury marketers to shifts and changes in their target customers' attitudes and shopping behavior
This report provides vital data about the last five years in the U.S. luxury market, from 2008-2012. It details trends in what luxuries affluents are buying, how much they are spending, where they are making their purchases and what brands they favor. This report provides invaluable information about the mindset, attitudes and spending habits of the affluent consumers that luxury marketers target. This is not just report about people with high incomes, but affluents who buy luxury goods and services.
More importantly it gives marketers an analytic five-year view of the luxury consumer market going in and coming out of the recession.
>> Luxury Marketers: This is a report about your customers & your target customers
Details about what these luxury consumers bought, how much they spent, where they made their purchases, and in certain categories the luxury brands they patronized are reported in four major categories of luxury. Significantly more product categories and more brands were included in the latest surveys, notably:
- Art & Antiques;
- Home Electronics;
- Furniture, Lamps & Floor Coverings;
- Garden & Garden Products;
- Kitchenware, Cookware and Cooks' Tools & Housewares;
- Major Home Appliances, Bath, Window Coverings & Building Products;
- Linens, Fabrics and Soft Goods;
- Mattresses & Sleep Systems; and
- Clothes & Apparel;
- Cosmetics, Beauty & Fragrance Products;
- Fashion Accessories;
- Personal Electronics; and
- Wine & Spirits.
- Luxury Dining;
- Spa, Salon, Massage Services; and
- Physician Services.
Provides marketers with facts and data that support strategic decisions
This report provides the facts and figures you need to develop winning marketing and business strategies. By working with the facts, not fantasies, you have a much better chance of success marketing to the luxury consumers. This report gives you a horizontal view of the luxury market, recognizing that luxury marketers compete not just with companies within their vertical product niche, but across all luxury categories as well.
Within each category of luxury, the key drivers for purchase are studied, such as role of luxury brand in purchase decision; the influence of sales price on purchase; where the shopper bought their last luxury; why they bought luxuries; and other motivational factors.
Five years of trend data enhances marketers understanding of their current and future customers
Enhancing marketer's understanding of their customers purchase behavior the Luxury Report 2013 contains data points covering five years (from 2008-2012) that show exactly how the affluents' money is being spent and how it is changing from year to year. It contains data about the average amount spent within a particular product category, such as Luxury Fashion Accessories, and within the category to the average amount spent on women's shoes or women's handbags, for example. It enables marketers to identify what products are up and down within their product category.
Further this report provides an estimate within product category of how the consumers' share of wallet is divided based upon type of store. So you can tell when affluent shoppers are shifting their spending out of one retailing segment and into another. For example, this year affluents spent less of their fashion accessories budgets in department stores and more in specialty fashion boutiques.
This report doesn't stop with the data -- It pushes further to help marketers and retailers put the information to use
It translates data into information and insights that marketing executives can use to make critical strategic decisions
This market research report helps make the research data and findings accessible and useable. It provides marketers with three powerful perspectives: "The What", "So What" and "Now What." This report is filled with advice and guidance for luxury marketers to take action on the research findings revealed.
Special feature: Find out which of the five different types of luxury consumers are your best customers
A special feature in Unity Marketing's Luxury Report 2013 is a psychographic profile of five key types of luxury consumers. These include:
- X-Fluents (Extremely Affluent) who spend the most on luxury and are most highly invested in luxury living;
- Butterflies, the most highly evolved luxury consumers who have emerged from their luxury cocoons with a passion to reconnect with the outside world. Powered by a search for meaning and new experiences, the butterflies have the least materialistic orientation among the segments, yet they spend nearly as much as the X-Fluents on luxury;
- Luxury Cocooners who are focused on hearth and home. They spend most of their luxury budgets on home-related purchases;
- Aspirers, those luxury consumers who have not yet achieved the level of luxury to which they aspire. They are highly attuned to brands and believe luxury is best expressed in what they buy and what they own.
- Temperate Pragmatist a newly emerged luxury consumer who is not all that involved in the luxury lifestyle. As their name implies, they are careful spenders and not given to luxury indulgence.
Special Offer: Order your copy of the Luxury Report 2013 and receive a FREE copy of Unity Marketing's best-selling trend report: Affluents Online 2013: A Luxury Trend Report on How Affluent Consumers Use the Internet, Social Media and Mobile Devices (a $595 value)
April 2013, 266 pages in PDF)
Subscription Price: $3,500 (Subscription fee for Luxury Report 2013 can be credited towards the annual Luxury Tracking Study for first-time subscribers)
Now the Unity Marketing Luxury Report 2013 is available in special editions containing subsets of the data.
- Home Luxury Report 2013- $2,995
- Personal Luxury Report 2013 - $2,995
- Experiential Luxury Report 2013- $1,995