Luxury Consumers Start off 2006 Spending More — Lots More — on Luxuries
Luxury Consumption Index rises to 113.2 as luxury consumers turn increasingly positive about their financial well-being, reports Unity Marketing

Luxury consumers’ confidence continued on a positive trend, rising 8.4 points in the first quarter 2006, to reach 113.2 points, its highest point since Unity Marketing’s luxury tracking study began at the end of 2003. This follows a stunning 10.4 points increase in the index tracked at the close of 2005, according to Unity Marketing’s exclusive Luxury Consumption Index. The index measures luxury consumer feelings about their personal financial status and the prospects for the country as a whole.

Luxury consumers’ boosted confidence translated into a big boost in their spending on luxuries. The typical luxury consumer spent $13,820 on average buying luxuries from January to March 2006, up 18 percent over luxury spending in the same period last year.

“Luxury consumers expressed the most negative feelings to date about the country’s overall financial health at the end of first quarter, with 46 percent saying the country as a whole is worse off now than it was three months ago. Yet they are incredibly optimistic about their own financial status. This then translated into significantly stronger spending on luxuries during the first three months of the year,” said Pam Danziger, president of Unity Marketing and author of Let Them Eat Cake: Marketing Luxury to the Masses — as well as the Classes.

These findings are based upon Unity Marketing’s quarterly luxury tracking study which surveyed 1,196 luxury consumers (average income $145.7k and age 42.7 years). Information about their purchases, spending, store and brand preferences are collected on four major categories of luxury goods and services, including home luxuries, personal luxuries (fashion and fashion accessories, jewelry, watches, cosmetics, wine and spirits, pet luxuries, and pens), automobiles and experiences (dining, travel, home services, spas/beauty services, and entertainment).

“Every category of luxury enjoyed an up tick in consumer spending in the first quarter 2006, while average spending on home luxuries, notably home remodeling and redecorating expenditures on furniture, kitchen appliances, garden and outdoor and home decorating fabrics, window and wall coverings, increased the most,” Danziger commented.

Regarding this quarter’s Luxury Consumption Index rise, Thomas Bodenberg, Unity Marketing’s economic forecaster said, “T he strong increase in the index this quarter is a function of two psychological shifts. First, luxury consumers have made adjustments for the increased price of oil. Second, there is an expectation that American involvement in the war in Iraq will diminish. These factors combined with the strength in the stock market are reflected in luxury consumers’ increased confidence.”

Unity Marketing publishes its Luxury Tracking Study quarterly with the next due in June 2006.

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 2005 statistics compiled from the four tracking studies during the 2005 year will be published in Unity Marketing’s Luxury Report 2006 — Who Buys Luxury, What They Buy, Why They Buy

In the tracking study detail purchase information is collected on these categories of luxury:

Home Luxuries:

• Art, Wall Décor & Antiques
• Electronics and Photography, such as computers, televisions, home entertainment centers, cameras, PDAs, etc.
• Home Decorating Fabrics, Window & Wall Coverings
• Furniture, Lighting and Lamps, and/or Floor Coverings, including rugs
• Outdoor, Lawn, Patio & Garden Products, such as lawn furniture, patio accessories, plants, grills, etc.
• Kitchenware, Cookware & Housewares
• Kitchen Appliances and Bath & Building Products, such as cabinets, bathtubs, etc. for home remodeling
• Linens & Bedding
• Tabletop, Dinnerware, Flatware, Servingware, Decorative Accents

Personal Luxuries:

• Automobiles and/or recreational vehicles, such as boats, RVs, etc.
• Clothes & Fashion Apparel
• Fashion Accessories, such as handbags, wallets, suitcases, shoes, etc.
• Fragrance, Cosmetics and/or Beauty Products and Skin Care regimes
• Jewelry
• Watches
• Pet Products
• Wine & Spirits
• Pens & Writing Instruments

Experiential and Luxury Services:

• Travel and vacations
• Dining and restaurants
• Entertainment
• Personal and health services, such as beauty treatments, spa, massage and cosmetic procedures, health club, country club, etc.;
• Home services, such as landscape, housecleaning, home remodeling, home decorating, party planning and catering, etc.

Luxury brands & magazines

Also included in the tracking study are measures of luxury brand awareness and usage as well as magazines luxury consumers purchase. See a listing of brands used inthe study.

Special Luxury Research: Luxury Travel through Rest of 2006

Each quarter a topic of special interest to luxury marketers’ is researched. In the 1Q2006 study, luxury consumers were asked about their plans for luxury travel through the end of the year. Questions about number of planned trips, destinations, experiences that are important when traveling, factors that influence travel destinations and expected spending were asked.

How to Subscribe

This is a semi-custom research service with subscribers adding specific product categories and their brands and the brands of five key competitors to the survey. In addition, subscribers can add up to six personal questions to the survey through the year. See more information about subscribing to luxury tracking, or call Pam Danziger at 717-336-1600.

May, 2006 (About 100 pages)

Published Price: $2,500

(Please Note: With the purchase of this report, subscribers may apply subscription fee for 1Q2006 report to annual Luxury Tracking subscription)

Major Findings

More Information

Luxury Consumption Index

Table of Contents

Luxury Tracking 2006 Survey, Methodology & Questionnaire

Luxury Brands Listing
To subscribe to the Luxury Tracking Consumer Survey, please call Pam at 717-336-1600.

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