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Luxury Marketers: What if Shoppers Just Aren't That Into You? Stevens, PA August 15, 2007 -- We've seen it on the news and read it in the papers -- The luxury market is booming with companies making money hand over fist catering to the whims of affluent consumers. But what if in your luxury business, the long-awaited boom is turning out to be a fizzle? What if affluent consumers just aren’t that into your brand? If so, you're not alone. Back in 2004, Sex and the City writer Greg Behrendt and his co-author Liz Tuccillo created a sensation with their book, He's Just Not That Into You, a dating guide for single women that explained men they are dating who are elusive and uncommitted are simply not all that interested in her. But the wisdom goes deeper than dating. "Luxury marketers would do well to recall the message of this book. They need to come to grips with the fact that not all affluent consumers are falling at their feet," says Pam Danziger, president of Unity Marketing, a research firm specializing in the luxury market, and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience. This may be happening more often than one might expect, according to new research from Unity Marketing. Danziger says, "Our latest luxury consumer survey shows that only about 10 percent of affluent consumers live the kind of luxury lifestyle where buying top-of-the-line brands is the norm." The second quarter Luxury Tracking Report, based on a survey of some 1,000 luxury consumers (average income $155,500 and who spent an average of $15,283 on luxury in the second quarter of 2007), reports fully one-third of the affluent consumers surveyed said that while they have been fortunate to enjoy luxuries in their life, that "luxury is not a part of my lifestyle." Another 27 percent admitted to scaling back on some purchases in order to afford luxuries in areas that really matter to them, but for these occasionally indulgent affluents, high-end luxury living is not a part of their every day life either. This means that three out of every five potential luxury consumers is able easily to walk past the high-end stores and brands calling their name. Understanding What the Consumer Values Is the Challenge for Luxury Marketers Luxury marketers face a challenge this research highlights. A majority of affluent consumers are simply not that engaged in the world of luxury living. "I think marketers sometimes get too caught up in their business and their brands' marketing messages. They are clueless as to how the consumers really see things. They project their own excitement onto the consumer, so they read enthusiasm, when the customer really isn't willing to pay a whole lot of money to buy a luxury that they don't need or really value," says Danziger. "Luxury marketers need to pay attention to the customer and strive to make their products or services truly exciting in order to capture their attention. They need to listen to the consumer to make sure that the values represented by their products and services align with what is really important to the customer. They need to invest in consumer insights that will help them discover what the typical affluent consumer really wants in the luxuries they occasionally indulge in. They need to keep in mind that the customer for whom luxury is an everyday expectation -- these 'best of the best' consumers -- only comprise less than 10 percent of the luxury market," Danziger advises. "Instead, marketers need to convey to the reluctant luxury customer why their product or service is a smart choice as that occasional treat. They need to emphasize the superior quality, workmanship, materials, or service that they provide and work hard to make customers see why it is worth ‘trading up’ to their brand of luxury item,' Danziger concludes. For media: A chart entitled The Good, Better, Best of Luxury – and 'I Just Don't Care That Much', is available on request. About Unity Marketing's Luxury Consumer Tracking Study 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 are published in Unity Marketing's Luxury Report 2007-- The Ultimate Guide to the Luxury Consumer Market http://www.unitymarketingonline.com/cms_luxury/luxury/Luxury_Report_2007.php. In the tracking study detail purchase information is collected on these categories of luxury: Home Luxuries:
Personal Luxuries:
Experiential and Luxury Services:
Luxury brands & magazines Special Luxury Research: Luxury Consumers, Their Personalities and Attitudes About Their Luxury Lifestyles How to Subscribe About Pam Danziger and Unity Marketing Advising such clients as PPR, Diageo, Stearns & Foster, Waterford/Wedgwood, Lenox, Prudential Fine Homes, Ritz Carlton, Orient-Express Hotels, The World Gold Council, The Conference Board and American Express, Danziger taps consumer psychology to help clients navigate and master the changing luxury consumer marketplace. In recognition of her ground-breaking work in the luxury consumer market, Pam received the Global Luxury Award presented by Harper's Bazaar for top luxury industry achievers in 2007. Her latest book is Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, published by Kaplan Publishing in October 2006. Her other books include Let Them Eat Cake: Marketing Luxury to the Masses—as well as the Classes, (Dearborn Trade Publishing, $27, hardcover) and Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior (Chicago: Dearborn Trade Publishing, 2004).  |
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