Luxury Consumers Will Spend Nearly Twice as Much as Middle-Income Consumers On Gifts This Holiday Season

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Press Release

Luxury Consumers Will Spend Nearly Twice as Much as Middle-Income Consumers On Gifts This Holiday Season

Affluent market will be the holiday season's sweet spot for retailers this year, reports Unity Marketing

Stevens, PA November 14, 2006 - In Unity Marketing's latest survey of affluent consumers about their luxury purchases and spending, luxury consumers (top 25 percent of U.S. households based on income) plan to spend an average of $1,903 making their holiday gift purchases. This according to the Luxury Tracking survey of over 1,000 luxury consumers (average income $149.1 k average age 43.4 years) conducted in October 2006.

"Luxury consumers have significantly more discretionary income so they can be more generous with their gift selections. This year affluent men, especially those of the baby-boomer generation, will spend the most buying holiday gifts," says Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Shopping Experience.

Luxury Consumers More Likely to Give Clothing, Consumables & Experiential Gifts

While the top two gift choices this year for luxury consumers are the same as for the typical gifter - entertainment and recreational gifts (DVDs, CDs, toys, sporting goods, books, electronic equipment) and gift cards - luxury consumers are more likely to choose gifts of clothing and fashion accessories, consumables (gourmet food, wine and spirits, gift baskets) and experiential gifts (dining, entertainment tickets, spa packages) than the typical consumer is.

Department Stores and Internet Retailers Will Benefit Most from Luxury Consumer Gift Shopping

The stores that will benefit most from luxury consumer gift purchases will be department stores, including luxury (Nordstrom, Neiman Marcus, Saks Fifth Avenue, etc.) and mass market department stores (J.C. Penney, Macy's, Sears, etc.) and internet and other non-store retailers. Some 45 percent of luxury consumers say they are very likely to shop for gifts in department stores, while 44 percent plan to gift shop through a non-store or online retailer.

These two shopping destinations are far and away the most popular source for luxury consumers. No other type of store comes close. For example, only 24 percent report they are very likely to shop in electronics/computer specialty stores, while 23 percent plan to shop in specialty fashion boutiques and 20 percent are very likely to shop at discount or mass merchant (Wal-Mart, Target, Costco, etc.).

Danziger concludes, "While luxury consumers comprise only one-fourth of the population, their high incomes make them a particularly powerful segment for the nation's retailers. The key to capturing their shopping dollars is not so much to offer deep discounts on merchandise, but to entice them with engaging shopping experiences. So luxury retailers like Nordstrom or non-store retailers that deliver an extra-value gifting experience like RedEnvelope.com are more likely to attract luxury gift shoppers this year."

About Unity Marketing's Luxury Tracking Study

These findings are based upon Unity Marketing's quarterly luxury tracking study which surveyed 1,048 luxury consumers about their purchases, spending, store and brand preferences in four major categories of luxury goods and services, including home luxuries; personal luxuries (clothing, fashion accessories, jewelry, watches, cosmetics, wine and spirits, pet luxuries, and pens); automobiles; and experiences (dining, travel, home services, spas/beauty services, and entertainment).

Unity Marketing publishes its Luxury Tracking Study quarterly with the next due in January 2007. For more information visit (http://www.unitymarketingonline.com/reports2/luxury/luxury3.html)

Contact: Pam Danziger, 717-336-1600

For media: Charts, tables and graphs are available on request.

About Pam Danziger and Unity Marketing
Pamela N. Danziger is a nationally recognized expert specializing in consumer insights, especially for marketers and retailers that sell luxury goods and experiences to the masses or the 'classes.' She is president of Unity Marketing, a marketing consulting firm she founded in 1992.

Advising such clients as Cartier, PPR, R�my Amerique, Stearns & Foster, Waterford/Wedgwood, 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 consumer marketplace.

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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