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Press Release The Rich Are Getting Richer and Spending More on Luxury Stevens, PA April 12, 2006 - Out of the nation's 113.1 million households, a total of 30.2 million, or roughly the top 27 percent of households by income, are classified by Unity Marketing as affluent. These affluent households have an average income of $137,500, which is a comfortable income almost anywhere in America, though hardly rich. In 2004 the number of affluent households grew 8.4 percent from 27.9 million affluent households in 2002, according to Unity Marketing's new Luxury Report 2006: Who Buys Luxury, What They Buy, Why They Buy.
Among the affluent market the segment with the highest income also grew faster than any other. The super-affluents, defined by Unity as those with incomes of $150,000 and above, grew 18.1 percent from 2002 to 2004 to reach 6.6 million households, more than twice as fast as the affluent market overall. Super-affluents spent two times more than affluents on luxury and three times more than near-affluents In 2005 the average affluent household spent $52,588 buying luxuries, up 3.8 percent over the average amount spent in 2003, or $50,640. But super-affluents spent significant more than the other segments on luxuries. The typical super-affluent household spent $86,445 buying luxuries in 2005, as compared to only $26,488 among near-affluents (incomes $75,000-$99,999) and $42,224 among affluents (incomes $100,000-$149,999). Overall super-affluents spent three times more buying luxury than near-affluents and two times more than affluents. The super-affluents outspent everybody else in all four categories of luxury — home luxuries, personal luxuries, such as fashion and jewelry, automobiles and experiences, such as travel and dining. Trends in spending point to growth for experiential luxury marketers, while many home luxury marketers will face challenges “The affluent consumers, while representing just about one-fourth of U.S. households, are a powerful force in the consumer economy,” says Pam Danziger, president of Unity Marketing and author of Let Them Eat Cake: Marketing Luxury to the Masses — as well as the Classes. “Their spending preferences will determine the ultimate success of many industry sectors, companies and luxury brands in the future. For example, the typical luxury household spent nearly 5 percent less buying home luxuries in 2005, while their spending on personal luxuries rose a modest 5.6 percent.” “Given these trends in spending, the best prospects for growth in the home luxury market are in the categories of garden and outdoor, kitchen appliances, bath and building products and luxury kitchenware and cook’s tools, the only home categories that experienced increased spending in 2005,” Danziger says. “Personal luxury marketers must remain vigilant about delivering superior value and quality in their products while maintaining competitive prices to attract more luxury consumers in the future.” “It’s among marketers of luxury experiences where the greatest growth will be seen in the coming years. The average luxury household spent nearly twice as much on luxury experiences in 2005, up from an average of $11,632 in 2004 to $22,746. “For today’s ‘new luxury’ consumers, their ultimate luxury satisfaction comes from the things they do, rather than the things they have or own. While luxury consumers will still buy luxury goods, what they really crave are more life changing experiences. It is in that direction where their spending will continue to shift,” Danziger concludes. About Unity Marketing’s new Luxury Report, 2006 This important new study of the luxury market provides the results of a four-year longitudinal research study of the luxury market, which combines qualitative and quantitative methodologies. This report is compiled from Unity’s quarterly Luxury Tracking surveys, which in 2005 included over 4,000 survey respondents. In 2005 the average income of respondents was $139,075 and the gender distribution was 65 percent female and 35 percent male. The average age of respondents was 42.9 years, with 47 percent of respondents being Baby Boomers and 38 percent being GenXers. More details about products and brands included in Luxury Report 2006 Details about what these luxury consumers bought, how much they spent, where they made their purchases, and in certain categories the luxury brands they patronized are reported in four major categories of luxury: Home Luxuries
Personal Luxuries
Automobiles (including brandsAcura, Audi, BMW, Cadillac, Jaguar, Infiniti, Land Rover, Lexis, Lincoln, Mercedes, Porsche, Saab, Volvo) Experiential Luxuries
This report provides the facts and figures needed to develop winning marketing and business strategies for luxury marketers. It takes a horizontal view of the luxury market, recognizing that luxury marketers compete not just with companies within their vertical product niche, but across all luxury categories as well. Within each category of luxury, the key drivers for purchase are studied, such as role of luxury brand in purchase decision; the influence of sales price on purchase; where the shopper bought their last luxury; why they bought luxuries; whether their luxury purchases were made a gifts; and other motivational factors. Special feature: Find out which of the four different types of luxury consumers are your best customers A special feature in Unity Marketing’s Luxury Report 2006 is a psychographic profile of the four key types of luxury consumers. These include:
For more information, call Pam Danziger, 717-336-1600 or email pam@unitymarketingonline.com For media, charts, tables and graphs of luxury consumer spending are available on request. About Pam Danziger and Unity Marketing Pamela N. Danziger is a nationally recognized expert specializing in consumer insights for luxury marketers, whether they sell luxury to the masses or the ‘classes.’ She is president of Unity Marketing, a marketing consulting firm she founded in 1992. Advising such clients as Lenox, Cartier, Herend, Rémy Amerique, Stearns & Foster, Phillips, Prudential Fine Homes, Baccarat, The World Gold Council, The Conference Board and American Express, Danziger taps consumer psychology to help clients navigate and master the changing luxury marketplace. Her latest book, Let Them Eat Cake: Marketing Luxury to the Masses—as well as the Classes, (Dearborn Trade Publishing, $27, hardcover) is in book stores now. She is the author of the recent book, Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior (Chicago: Dearborn Trade Publishing, 2004). Her new book, Shopping: Why We Love It and How Retailers Can Create the Ultimate Consumer Experience, will be published Fall 2006. She has appeared on CNN’s In the Money, NBC’s Today Show, CNBC, CNN International, CBS News Sunday Morning, Fox News’ Your World with Neil Cavuto, ABC News Now, NPR’s Marketplace and is frequently called upon by the Wall Street Journal, New York Times, American Demographics, Women’s Wear Daily, Forbes, USA Today, Associated Press, Los Angeles Times, Chicago Tribune for commentary and insight.
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