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Luxury Consumers Start 2007 in a Consumer Confidence Slump

Luxury consumer spending declines in fourth quarter 2006, reports Unity Marketing

Stevens, PA January 23, 2007 - Luxury consumers' confidence declined to its lowest level in 2006 at the close of the fourth quarter. This sets the stage for more reserved spending by the nation's affluent consumers on luxury goods and services in the first quarter of 2007.

Unity Marketing's Luxury Consumption Index declined 5.1 points to reach 98.2 points in the fourth quarter 2006, down from 103.3. in the third quarter, according to the latest survey of 1,036 luxury consumers (average income $156.5k and average age 42.8 years).

In keeping with a decline in consumer confidence, the typical luxury consumer spent less on luxury purchases in the period, dropping 3.4 percent from $13,432 during the third quarter to $12,982 in the fourth quarter.

"But it's not all doom and gloom for luxury marketers and retailers," says Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Shopping Experience. "Spending on experiences rose modestly in the fourth quarter and spending on personal luxuries were up dramatically. However, a drop in spending on home luxuries pulled the overall spending levels down in the fourth quarter."

Commenting on the Luxury Consumption Index, Thomas Bodenberg, Unity Marketing's economic forecaster, said, "Luxury consumers signaled caution with the drop in the index as they enter 2007. "While the majority of luxury consumers expect their personal financial status to improve in 2007, they remain concerned about the state of the economy overall. The dollar's continued decline against the Euro and pound sterling and continued political instability in the Persian Gulf region accounts for the softness in luxury demand."

About Unity Marketing's Luxury Consumer Tracking Study

These findings are based upon Unity Marketing's quarterly luxury tracking study which surveyed 1,036 luxury consumers (average income $156.5k and age 42.8 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: Status and the Luxury Consumer

Each quarter a topic of special interest to luxury marketers is researched. In the 4Q2006 study, luxury consumers and their attitudes about status were investigated.

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.

February 2007 (About 100 pages)

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

Executive Summary Topline 4Q2006 Results: $750

(Please Note: With the purchase of a report, subscribers may apply the subscription fee for 4Q2006 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:

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.