Luxury consumer expenditures rose 9 percent in second quarter but their confidence in future expectations declined from earlier this year

Stevens, PA  July 27, 2007 -- Affluent consumers went on a spending spree for luxuries in the second quarter 2007.  The typical luxury consumer spent $15,283 buying luxury goods and services during the second quarter, 9 percent more than the average expenditure of $14,024 in the first quarter.  This according to the results of Unity Marketing's Luxury Tracking survey of 1,000 affluent consumers conducted at the close of the second quarter 2007 (average income $155,500 and average age 44.3 years).

Industries benefiting from increased luxury consumer's spending included:

• Luxury electronics (average spending rose 14.5 percent); home decor fabrics, wall and window coverings (61.5 percent) ; kitchen appliances (8.4 percent); linens and bedding (11.4 percent) and tabletop (42.5 percent) in the luxury home sector.
• Luxury fashion accessories (28 percent increase); cosmetics and beauty products (33.8 percent); jewelry (54.6 percent) and watches (20.3 percent); and wine and spirits (12 percent) in the personal luxury sector.
• Luxury automobiles (13.8 percent increase); and
• Luxury dining (23.1 percent increase), entertainment (52.9 percent), and travel (21.4 percent), all in the luxury experiences sector.

(Note to media:  Charts, tables and graphs, including detailed data is available about luxury consumer spending on request.)

Luxury Consumption Index Drops to 96.2 points

While spending went up in the second quarter, luxury consumers' confidence as measured by future spending intent was at its lowest level in over a year.  This factored most strongly in the 4 point decline in the Luxury Consumption Index to 96.2 points. 

Commenting on this quarter's index, Tom Bodenberg, Unity Marketing's economic forecaster, said, "With spending going up this quarter while confidence in the future went down, this suggest an 'eat, drink and be merry' attitude for now, as these consumers foresee some cloudy patches ahead.  The decline in future expectations can be accounted for by continued uncertainty in the housing market, instability caused by the increasingly tense Iraqi/Iranian situation, and the continued high price of refined petroleum and uncertainty about energy supply." 

There is a silver lining to the doom-and-gloom forecast for the luxury market and that is the young affluents, aged 40 years old and younger.  Pam Danziger, president of Unity Marketing, explains, "The most aggressive future buying lies with the younger, upper-most income segments of the luxury population.  As opposed to the older luxury consumers, the young affluents are more likely to see their financial situation improving over the next twelve months which gives them greater confidence to spend more on the luxuries they desire." 

"In the second quarter the young affluents also continued their aggressive purchasing of luxuries, spending 39 percent more on average buying luxuries as compared to those over 40 years old.  For luxury marketers concerned with their future, the passions and desires of the young affluents -- what I call the 'Want-It-All' generation -- is where they need to focus their marketing planning and strategies,"  Danziger says.

New Study Uncovers Nine Key Trends Distinguishing the Young Affluents

This new generation of young affluents is the subject of a recent Unity Marketing's research study called the Generations of Luxury.  This study is luxury marketers' vital guide to understand the wants and desires of the new generation of luxury consumers in every luxury company's future.

The new Generations of Luxury report from Unity Marketing will help luxury marketers and retailers 'think young' in order to understand the young affluents and to position their brands for the future in the developed and the developing markets.

This 200+ page report presents the nine key trends that distinguish the young affluents from the more mature luxury consumers, based upon the latest research combining both qualitative and quantitative methodologies conducted by Unity Marketing. These nine trends form the basis for a strategy to help luxury marketers understand and reach out to the young affluents who will be their primary consumers for the next decade and beyond.

This study also reveals:

• What luxury marketers need to know about the young affluents in terms of branding, marketing and retailing to this generation.
• What luxury categories are most appealing to the young affluents and in which luxury categories the young affluents represent the core target market.
• Where the young affluents shop for their favorite luxuries and what marketers need to do to capture those customers when they are shopping.
• How marketers can influence young affluents in their luxury purchases.
• Why young affluents spend more and how luxury marketers can capture a bigger share of their wallets.

Use this link http://www.unitymarketingonline.com/cms_luxury/luxury/insights_study.php to learn more about the Generations of Luxury report and to order your copy today.  More information is available on the website above or by calling Unity Marketing, 717-336-1600.

Special Discount Offer:  Order Generations of Luxury report and get a copy of Luxury Report 2007: The Ultimate Guide to the Luxury Consumer Market for more than half-off off the published price  -- Get both reports for $5,000. 

For media:  Charts, tables and graphs are available on request.