PRESS RELEASE

Stevens, PA— January 19, 2004 The December/January issue of Luxury Business newsletter is out.

You surely have noticed that the luxury market is hot, hot, hot and getting hotter. Year-end forecasts are filled with predictions that the luxury market is surging back in a big way. For example, Davide Dukcevich, a Forbes columnist, offers holiday cheer to luxury marketers everywhere: "In 2004 look for the return of what Italian fashionsita Gianni Agnelli once called 'the need for the superfluous'." The publication of Trading Up, the New American Luxury, has authors Michael Silverstein and Neil Fiske doing the book promotion circuit and generating lots of buzz about how those even below the top 1-to-2 percent of the income ladder are reaching up for specific luxuries they crave, while they shop at Wal-Mart for everything else.

Why is the luxury market so important? It's not only the depth of their pockets and their contribution to the consumer economy. It's that the affluent, luxury consumer is a bellwether of trends coming to the great mass market. The natural evolution of all luxury concepts is from the classes to the masses. In other words, all luxury concepts after first being introduced to the luxury affluent consumers inevitably are translated down into the mass market. So today everyone is a member of the 'jet set,' while back in the '60s that term meant something and described only the most elite who had the means to fly by jet. This luxury evolution is! happening faster and faster today owing to the rapid adoption of technology and the explosion of mass media, particularly the Internet. And that ultimately means that luxury marketers have to move faster and faster to stay out in front of the great mass-market bell curve

Unity Marketing has just completed its 2003 year-end luxury consumer survey. This survey updates the luxury survey we conducted in 2002 and provides a snapshot of changes in the mindset of the luxury market as we go into 2004.

The major finding this year is that luxury has gone experiential. As in last year's survey, the luxury consumers' focus in buying and pursuing luxury is how they experience it, the feelings and emotions luxury evokes, and the way luxury purchases express one's values and attitudes. Luxury is no longer about rampant materialism or having and getting, but the enjoyment and reveling in the luxury experience. Among other key findings:

-The luxury consumers feel considerably more positive about their financial status this year, as compared with last.

-The number one must widely purchased luxury in the past year was luxury electronics, mirroring a finding from our 2002 survey. And among those who bought jewelry, they spent nearly $2,000—that is 46 percent more than they spent on this ultra-luxury category in the previous year. Spa spending also got a 36 percent boost this year over average spending last year.

-Luxury consumers continue to be bargain shoppers, enjoying the experience of saving money while buying luxuries. Because of that, discounters and other off-price stores are the favorite shopping source for home luxuries, but department stores and specialty retail still lead in the personal luxury realm of fashion, beauty and jewels.

-The luxury products brand is very important for the majority of consumers in only two key categories: Luxury automobile and luxury beauty and fragrances. For every other category fewer than half of the consumers rated luxury brand as very important in their last purchase decision.

Unity's survey includes consumers with incomes of $100k and above, along with a comparative sample of upper middle-income consumers from $50k to $99.9k. For those targeting the upper stratosphere of the affluent market, Elite Traveler just released their 2003 Luxury Spending Survey, an examination of 431 individuals in three segments based upon affluence: Elite Affluent, those with a net worth in excess of $10 million; Upper Affluent Plus, individuals with a net worth between $5 and $10 million; and Upper Affluent, those with a net worth of $1-$5 million.

Interestingly, many of their findings among the most affluent mirror ours. Among their most important finding is that the most wealthy (i.e. Elite Affluents) are more optimistic about the economy. They also spend more frequently and in much larger amounts across all categories included in the survey. For example, the most affluent are:

-More likely to spend significantly on spas and health resorts for their winter holiday travel.

-More likely to spend on the latest technology and will spend over $5,000 on electronic purchases this holiday season. They also expect to spend big on photographic equipment.

-Will be major purchasers of jewelry and watches this holiday.

"As above, so below"—Elite Traveler's survey focuses on their very ultra-elite target market, i.e. consumers with $1.1 million and above household income. On the coming pages, we will summarize the major findings from the latest luxury consumer survey. Much more detailed analysis of the data will follow and ultimately be published in the 2004 edition of Unity Marketing's Luxury Report, scheduled to be released during first quarter 2004.

Also covered in this issue:

Luxury Goes Experiential

Luxury Electronics and Experiential Luxuries Show Biggest Growth

Importance of Brand in Luxury Purchases

Less Emphasis on Luxury Home Decor in 2003

Luxury Consumers still Improving their Dining and Cooking Experiences

Jewelry and Watches are strong Personal Luxury Performers in 2003

Experential Luxuries get a boost in 2003

Luxury Consumers Spent More on Jewelry & Watches, Kitchenware & Cookware and Tabletop in 2003

Luxury Shoppers Shop for Home Luxuries at Discounters, while Department Stores and Specialty Retail Lead in Personal Luxury Shopping

With Exception of Luxury Beauty, Majority of Luxury Purchases Are Made on Sale or at a Discount

Only in Luxury Automobiles and Fragrances & Beauty is Luxury Brand very important for a majority of Shoppers

Luxury Consumer Better Off This Year Than Last

Experiential Luxuries Are Most Satisfying and Become More Satisfying with Age

Luxury is not about Having and Owning, but about the Experience

To order this issue, or an annual subscription Click here.

For more information contact Pam Danziger, President, Unity Marketing; 717-336-1600; FAX 717-336-1601 Pam@unitymarketingonline.com

To arrange an interview or other media inquiries, contact Len Stein, Visibility, 914-712-2610; lens@visivilitypr.com

Back