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Home Is Still Hot for Luxury Consumers Despite the Fall in the Housing Market

Home furnishings marketers continue to look up-market for opportunity, but targeting the customer with money to spend takes an investment in research

September 28, 2007 Stevens, PA -- Despite the doom and gloom predictions resulting from the widely-reported fall in the housing market, savvy home marketers can still find reasons for optimism. Last year the nation's home furnishings and household appliance market reached $253 billion, propelled by 7.1 percent growth in personal consumption, according to the latest figures from the Bureau of Economic Analysis. This growth was fueled in part by the purchasing behavior of the affluent consumer. Signs are positive the luxury end of the home market will be far less affected by the housing downturn than sectors that target less affluent Americans.

That is one reason why home furnishings and appliance marketers continue to explore opportunities at the high-end. It is also a reason why home goods marketers seeing their target market shift to a more affluent consumer need in-depth marketing research to pinpoint the new customers willing to lavish money on their homes.

Luxury consumers spent nearly 9 percent more on luxuries for their home in 2006
The fact is affluent consumers continue to want -- and have the money to afford -- more luxurious home furnishings. Last year the typical luxury consumer spent $21,700 on luxuries for their home, which was 8.6 percent more than they averaged in 2005, according to statistics compiled by Unity Marketing and published in the Luxury Report 2007: The Ultimate Guide to the Luxury Consumer Market.

Commenting on the potential for home furnishings marketers in luxury home, Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, said, "In our most recent survey we found that roughly one-third of luxury consumers have plans to redecorate their homes and about 15 percent plan on doing a major home remodel in the coming year. This represents a tremendous opportunity for home furnishings, furniture and appliance retailers and marketers, as well as decorators and contractors, for they supply the goods and services that help luxury consumers create luxurious homes environments where they can retreat, rewind and refresh."

Luxury home is a growth trend
Identifying luxury as the latest trend in the home furnishings market, a recent Wall Street Journal story reported, "Amid rising material costs, markers at High Point Show put focus on luxury market." The article goes on to discuss how furniture companies are marking up prices and limiting distribution to appeal to the affluent consumer. Brandweek magazine recently recognized the luxury home trend in their article, "Upscale design trumps housing slump," which reports on the success found by home appliance companies, like GE, Maytag and Whirlpool, as they move their product lines upscale.

But with so many home marketers rushing to the high end, the question is whether these companies are guided by a well-thought out strategy based upon an understanding of the affluent consumers' desires, or simply following the herd?

Danziger says, "The consumer is the first principle of marketing. Luxury home furnishings companies and retailers that want to achieve lasting success in targeting the affluent need to do their due diligence in the luxury market, which involves a commitment to consumer research. Home furnishing marketers will need inspiration in order to design interesting new luxury product offerings that will appeal to the affluent. That inspiration can be found in only one place � by understanding the mind set and desires of the luxury consumer."

She points to the Kohler Co. as a company that has successfully expanded its business from basic bathroom fixtures into the luxury realm. "Kohler regularly wins awards for product innovation. The secret of their success is designing products in order to enhance the experience of the customer with the company's products. They have been at the forefront of bringing the spa experience into the home." To learn more information about Kohler�s luxury transformation and how your company can gain inspiration to transform your business for the luxury market, click this link

New Research Initiative Will Give Insights into the Market for Luxury Home
Unity Marketing is undertaking a major new research initiative for a select group of forward-thinking home furnishings marketers and retailers that need to find a new path for success in the changing luxury home furnishings market. This investigation will focus specifically on the needs, desires and passions of home furnishings consumers, including furniture and decorative home furnishings buyers.

Through consumer research, including focus groups, quantitative surveys and in-home observational research, sponsors will tap into the psychology of people who buy home furnishings and decorative accessories in order to understand their drives, motivations and passions in making home decorating decisions and purchases.
The insight gathered will give research sponsors inspiration to discover new marketing opportunities in the luxury home market based upon defined consumer desires.

Two levels of sponsorship are available. Basic research sponsors will participate in the focus group and quantitative survey portions of the study. Advanced sponsors will get all the same benefits as basic sponsors, but will also go into luxury consumers' homes and observe them in their home space discussing how they view luxury. Further, sponsorships will be offered on an exclusive basis so no two companies that directly compete in one product category of luxury home will participate.

To learn more about the luxury home research investigation, visit http://www.unitymarketingonline.com/cms_home/homedecor/home_furnishings_2006.php

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