Unity Marketing : Luxury Consumer Confidence Recovers at End of Third Quarter

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Luxury Consumer Confidence Recovers at End of Third Quarter

Luxury Consumption Index rises to 103.3, up 4.1 points, but spending doesn't match growing confidence, reports Unity Marketing.

Stevens, PA November 1, 2006 - Luxury consumers' confidence rose at the close of the third quarter, reaching 103.3 points, up from 99.2 at the end of second quarter. But luxury consumers' spending on luxury didn't match their rise in confidence. This according to the latest result of Unity Marketing's Luxury Tracking survey of over 1,000 luxury consumers (average income $149.1k) conducted in October 2006.

"The rebound of the luxury index to 103.3 points means that luxury consumers have more confidence about the economy and their financial status. In particular, there is a notable rise in luxury consumers' perception of the financial health of the country. If the coming elections turn on the economy, this is good news for incumbents," says Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Shopping Experience. "However, luxury consumers didn't translate their rise in consumer confidence into increase spending on luxury during the last quarter."

Luxury consumers spent on average $13,432 buying luxuries in the third quarter, which was 9.6 percent less than they spent in the second quarter. With a few exceptions - notably luxury electronics, furniture, clothing, fashion accessories, wine and spirits - luxury consumers average spending declined, with the spending levels of the super-affluent consumers (those with incomes of $150,000 and above) down the most.

"The index shows some recovery in the third quarter, but not back up to previous high levels seen in the Spring '06," says Thomas Bodenberg, Unity Marketing's economic forecaster. "While the lower and middle-class consumers have benefited from the drop in gas prices, this doesn't have a significant effect in the luxury market. On the other hand, luxury consumers are much more impacted by the decline in the housing market. Super-affluents, in particular, who tend to live in the most expensive houses are likely to have experienced the steepest drop in their home's value which translated into more moderate levels of spending on luxury in the third quarter."

Danziger concludes, "Given the greater levels of confidence, we feel luxury consumers' spending levels will rise in the fourth quarter. In particular, Christmas 2006 gifting will be strong among luxury consumers as they accrue bonus payouts during the fourth quarter."

About Unity Marketing's Luxury Consumer Tracking Study

These findings are based upon Unity Marketing's quarterly luxury tracking study which surveyed 1,048 luxury consumers (average income $149.1k and age 43.4 years).

Every quarter Unity Marketing conducts a Luxury Consumer Tracking Study among 1,000+ luxury consumers. Year-end 2006 statistics compiled from the four 2006 tracking studies will be published in Unity Marketing's Luxury Report 2007 - Who Buys Luxury, What They Buy, Why They Buy.

In the tracking study detail purchase information is collected on these categories of luxury:

Home Luxuries:

Art, Wall D�cor & Antiques
Electronics and Photography, such as computers, televisions, home entertainment centers, cameras, PDAs, etc.
Home Decorating Fabrics, Window & Wall Coverings
Furniture, Lighting and Lamps, and/or Floor Coverings, including rugs
Outdoor, Lawn, Patio & Garden Products, such as lawn furniture, patio accessories, plants, grills, etc.
Kitchenware, Cookware & Housewares
Kitchen Appliances and Bath & Building Products, such as cabinets, bathtubs, etc. for home remodeling
Linens & Bedding
Tabletop, Dinnerware, Flatware, Servingware, Decorative Accents

Personal Luxuries:

Automobiles and/or recreational vehicles, such as boats, RVs, etc.
Clothes & Fashion Apparel
Fashion Accessories, such as handbags, wallets, suitcases, shoes, etc.
Fragrance, Cosmetics and/or Beauty Products and Skin Care regimes
Jewelry
Watches
Pet Products
Wine & Spirits
Pens & Writing Instruments

Experiential and Luxury Services:

Travel and vacations
Dining and restaurants
Entertainment
Personal and health services, such as beauty treatments, spa, massage and cosmetic procedures, health club, country club, etc.;
Home services, such as landscape, housecleaning, home remodeling, home decorating, party planning and catering, etc.

Luxury brands & magazines

Also included in the tracking study are measures of luxury brand awareness and usage as well as magazines luxury consumers purchase. This page provides a listing of brands.

Special Luxury Research: Holiday Gifting Projections Christmas 2006

Each quarter a topic of special interest to luxury marketers is researched. In the 3Q2006 study, luxury consumers plans for Christmas 2006 were included.

How to Subscribe

This is a semi-custom research service with subscribers adding specific product categories and their brands and the brands of five key competitors to the survey. In addition, subscribers can add up to six personal questions to the survey through the year. Use this link for more information about subscribing to luxury tracking or call Pam Danziger at 717-336-1600.

November, 2006 (About 100 pages)

Published Price Full Report, including brand rankings: $2,500

Executive Summary Topline 3Q2006 Results: $750

(Please Note: With the purchase of a report, subscribers may apply the subscription fee for 3Q2006 report to annual Luxury Tracking subscription)

Major Findings

More Information

Luxury Consumption Index

Table of Contents

Luxury Tracking 2006 Survey, Methodology & Questionnaire

Luxury Brands Listing

To Order:

Full Report (Paper Copy)

Downloadable PDF Full Report (Chapters 1-5)

Executive Summary (Chapters 1-3 only)

To subscribe to the Luxury Tracking Consumer Survey, please call Pam at 717-336-1600.