June 6th, 2013
This week Hilton Worldwide’s chief executive Christopher Nassetta announced the company was doing away with room service in its New York Hilton Midtown hotel. Turns out, this is the second Hilton to end room service, following the Hilton Hawaiian Village.
Apparently Nassetta thinks this is such a good idea for Hilton that at the hospitality conference hosted by New York University where he announced the change, he also called on other hotel companies to close down their room service operations too. After all, he claims, few guests use room service and it turns out not to be profitable anyway. So who needs it?
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Thanks Hilton, you just gave more forward-thinking and service-oriented competitors a big, sloppy wet kiss
Clearly, each hospitality company needs to study its operations, maximize profits and innovate to keep up with changing needs of its customers. As a result, room service has taken a hit, as other hotels move to scale it back or end it entirely. For example, Grand Hyatt in Time’s Square ended its 24-hour room service, which now shuts down at 11 pm, and Public, a Chicago-based Ian Schrager hotel, delivers food to guests in brown paper bags left outside hotel room doors.
But in this day of frequent international travel, 24/7 lifestyles and jet-lagged travelers further worn down by hassles getting to, from and especially through the airport, letting CFO’s watching the bottom-line make important customer-service decisions is short-sighted for Hilton specifically, and other hotels chains in general.
Hospitality companies that know which side their bread is buttered on ought to praise Hilton’s move and hope that more hotels follow suit. By taking the Hilton brand down a peg in service, they instantly elevated your brand up a notch competitively.
A more satisfying, pleasurable, customer-focused room service can become a key competitive advantage for you, if you keep your focus on the customer, not the bottom-line.
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How can you enhance the room service experience for your guests, and make a profit too?
Travelers, especially affluent travelers choosing an enhanced hotel experience, expect –demand – extra service, and they are willing to pay a premium for it, that the finding from Unity Marketing’s recent study of luxury travelers’ attitudes. Offering a better room service experience for your affluent guests is a way to distinguish your brand and encourage repeat visits.
So use the Hilton announcement, not as an example to follow blindly to some ‘new normal’ for the hotel industry, but as an incentive to discover ways to make the room service business more satisfying to guests and more profitable for you.
It’s time to:
- Re-engineer room service operations, starting from scratch and working out, as opposed to putting ‘band aids’ on existing problem areas.
- To explore the ‘ideal room service’ experiences your guests desire, through professionally-conducted research designed to take high-paying guests to a new level of service experience.
- To look outside the hotel ‘box’ and study other service-focused businesses to discover service models that might adapt to your operations. For example, what can you learn from studying the gourmet food truck businesses that attract long lines of customers and quickly deliver delicious food or from a renown retailer like Nordstrom which offers an exemplary model of customer service or from Zappos and Amazon, both of which have mastered the rapid delivery model to satisfy customers.
- To strategically integrate your loyalty/rewards program with room service. For example, by studying travelers’ history, you can determine guests that frequently order in-room dining and use those insights to reward guests for additional room service orders with added points, complimentary wine/beverage or other benefit. (BTW…I found this great white paper on hotel loyalty programs from Deloitte that is a must-read for anyone in the hospitality or loyalty program business http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/Consumer%20Business/us_thl_customerloyaltyPOV_012313.pdf)
- To create and market special hotel and room service packages for business travelers, couples, families. For example, back in the day when my husband and I traveled with our children, they thought it the greatest treat to order in room service and buy a movie, while we went down to have an intimate and peaceful dinner in the hotel restaurant.
Now isn’t the time to throw in the towel and ditch room service. On the contrary, it is a call for you to look at ways to innovate your room service operations to be more effective for your hotel, its bottom line and especially more satisfying to your customers.
Let Unity Marketing help you focus on your travel customers’ needs
Unity Marketing offers research and resources that will help you find ways to grow your business among the customers that count the most – the affluent consumers with discretionary money to spend. We provide research-based insights, information and understanding of your customers, which means more marketing success. Together, we can prepare for new opportunities that could profit your company.
- Get an overview: My latest book, Putting the Luxe Back in Luxury: How new consumer values are redefining the way we market luxury, uncovers the ways luxury consumers are changing and how specific luxury brands, including some travel brands, are responding. This gives the reader a great start in understanding the changing dynamics of the luxury consumer market.
- Understand the luxury travel market better: Unity Marketing offers a trend report, Affluent Consumers and Their Travel Plans 2013, that looks at the motivations and behaviors of the affluent consumers when they make travel plans, including a detailed analysis of the attributes they look for in a travel service provider.
- Go in-depth: If you need to understand the special travel and hospitality needs and desires of the U.S. affluent market relevant to your brand, Unity Marketing can conduct a customized research study of your customers and target customers. Utilizing a wide range of research methodologies, including focus groups, in-depth interviews, ethnography, surveys, Unity Marketing can reveal new insights, information and understanding of the affluent customers which will translate into greater marketing success for your brand.
- Let us help your team: If you need the background and analysis that will ground your creative approach in a specific market or for a specific client, Unity Marketing can craft a solution tailored to your business needs. Call me at 717.336.1600 or email pam@unitymarketingonline.com.
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May 7th, 2013
While new surveys show signs of optimism regarding affluent spending, the difference is the actionable interpretation
A reporter recently asked me about apparent discrepancies between the latest results from an American Express Publishing and Harrison Group luxury survey and Unity Marketing’s latest affluent consumer tracking study. The AMEX/Harrison study went out under a headline, “2013 Survey of Affluence and Wealth in America Finds Affluent Consumers Are Planning to Increase Spending Overall and in Key Luxury Categories,” while Unity Marketing’s reported “Affluent Consumers Express a Restrained Outlook on Luxury Spending.”
The reporter wanted to know which survey is right? Just to confuse the reporter more, I told her the fact is their data and ours are both ‘right’ and both surveys line up in many specific data points. The most important differences arise in how each organization interprets what the data means.
Without doubt the American Express Publishing/Harrison Group paints a rosy picture of the future for the affluent consumer. With year-to-year spending increases projected in several key luxury categories, plus an expectation of more available cash to be channeled into the purchase of luxury, AMEX and Harrison group anticipate a rebounding of the luxury market that would be welcome by those who target the affluent with their goods and services.
Unity Marketing’s latest survey shows some similar bright spots: an increase in spending on key luxury goods from 4Q2012 to 1Q2013 (including watches, linens and soft goods, and kitchenware/cookware), plus a small tick toward optimism in affluents’ expectation about their own financial futures. But unlike AMEX/Harrison, I advise luxury marketers to exercise caution and avoid taking their eye off the ball in a period that offers more uncertainty than optimism.
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Understand the Value of Data is in the Interpretation
I understand people’s desire to be optimistic. AMEX has a vested interest in putting a positive spin on the news to encourage marketers to advertise in their publications and to bolster the company’s stock market value. They make money by encouraging people to spend. By their own data, they estimate that nearly half all affluents (which they define as top 10 percent by income, but Unity defines as top 20 percent) have paid off their houses and four out of five carry no credit card debt. The company would like these consumers, who are “awash in cash,” according to senior vice president Cara David, to use some of this freed-up money to purchase more luxury goods, hopefully with an AMEX card.
I see things differently. Although the data Unity collects in its independent quarterly Luxury Tracking Study shows many of the same bright spots that AMEX/Harrison uncovered, I advise my clients that the luxury market is still too unstable to allow for unbridled optimism. They need to keep their guard up and continue to plan for market and competitive challenges ahead.
The Luxury Consumption Index (LCI), Unity’s proprietary measure of affluent consumer spending, has taken an up-and-down path through the quarters for the past several years and has not sustained a positive upward trajectory. Further the percentage of affluent consumers who expect to spend less on luxuries in the coming year (23 percent) equals the percentage who expect to spend more. Clearly, affluent consumers are cautious about future prospects.
Even AMEX/Harrison agrees, although reports of caution are buried below their picture of optimism. For example, they report that 76 percent of the affluents surveyed continue to insist that the recession is still on – matching Unity’s year-end survey finding. With three-fourths of affluents still seeing weakness in the economy, how can anyone believe these folks are going to throw caution to the wind and spend, spend, spend like there is no tomorrow? I, for one, don’t and neither should you!
Experts from AMEX/Harrison suggest that luxury consumers will focus on purchases that fulfill needs rather than wants, and that any bad economic news may cause these consumers to retreat from any spending increases. I agree with their note of caution, but I wish they hadn’t kept the news out of the headlines; it is important for marketers to understand that they need to prepare for the challenges ahead.
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Prepare for the Uncertainty Ahead
Luxury marketers need to prepare for potential uncertainty ahead rather than assuming that the economic bad times are over and that affluent consumers will return to pre-recession spending patterns with a lot of pent-up demand to release. (BTW…Unity’s tracking data shows that pent-up demand was released in 2010 and people’s spending has been retreating ever since) Affluent consumers, just like all others, learned how to cut back, make smart substitutions and budget during the downturn, and these lessons will continue to impact their buying behavior.
Unity Marketing offers luxury marketers accurate research data spanning several years, plus unbiased, in-depth analysis of the implications for the future. I offer actionable strategies for luxury marketers across a wide range of industries and product or service types. Together, we can prepare for the uncertainties that lie ahead for luxury marketing.
- Get an Overview: You are invited to attend a webinar May 23 where results of the latest Luxury Consumer Tracking Survey will be reviewed and strategies for growth explored with a focus on marketers, notably Lincoln Motor Company, Kering (formerly PPR), Ralph Lauren, and Coach, that have found success despite customers’ cautious outlook. Click [HERE] for details.
- Go Deeper: Purchase Unity Marketing’s Luxury Report 2013: The Ultimate Five-Year Guide to the Consumer Luxury Market, which gives a five-year perspective of the luxury consumer market. Click [HERE] for details.
- Let Me Help: For marketing solutions tailored to your business needs, give me a call at 717-336-1600 or email pam@unitymarketingonline.com.
Tags: Market Research
Posted in Luxury Market | No Comments »
April 11th, 2013
Advertising agencies and marketers need the intelligence and insight that leads to the perfect pitch
Mad Men has returned for our Sunday night viewing pleasure, and like many Americans, I am once again glued to my TV to watch Don, Roger, Peggy, and the rest of the crew navigate the world of 1960s advertising. And while the fashion has taken a questionable direction as the show heads into 1968 (sideburns and polyester?), one thing remains the same about this show: the thrill of watching a cutting-edge advertising agency find just the right approach to attract customers for their clients.
Get Inspired >>
Creative advertising requires customer insights that only research can provide
I think part of the appeal of Mad Men for those of us who work in marketing and advertising is the intrinsic truthfulness of the creative process. Whether it is hearing Don generate “It’s Toasted” on the fly for a Lucky Strike pitch in the first episode or watching Peggy piece together outtakes to make a campy, late-60s television commercial for Koss headphones in the most recent premiere episode, we recognize that great advertising comes from understanding. However, it is not enough to understand the product; advertisers must dig deeper to understand the consumer’s wants and desires and to be able to predict where consumers are headed and how their behavior changes over time.
This is why Unity Marketing’s cutting-edge research is a natural complement to the work of many advertising agencies and marketers, and why I enjoy working with advertising and marketing professionals. Our research reaches beyond a simple study of high-end products and experiences to take the pulse of the affluent consumer and how he or she behaves. For example, our most recent deep dive into affluent consumers and their travel plans shows that Asia, Australia, and New Zealand are on the travel wish list for many affluent consumers, and that they will look for bargains when booking their trip, but remember personalized service when they get home.
It is this kind of in-depth research your creative team needs to craft the concept, copy, and design that will capture the attention of affluent consumers. This is critical in the current economic climate, as affluent consumers are almost solely responsible for the rebound that signaled the official end of the recession. While lower and middle-class consumers are still mired in difficulty, the affluent consumers are spending more and driving any economic improvements we see.
But these affluent consumers are not spending evenly on all luxuries; instead, they are targeting their spending on products and experiences that make for great memories, and they are careful about finding bargains and trading off among their wants, choosing a luxury brand here, but downshifting to a premium or mass market brand there. These behaviors create many opportunities for the companies that sell to these consumers, but they require advertisers to understand behavioral patterns and craft a message that will hit home, every time. It is a challenge worthy of Don Draper.
And when your client beams with satisfaction and wonder at your understanding of their market? As Peggy once said, “This is as good as this job gets.”
Take Action >>
Unity Marketing delivers insights about your customers that will inspire great advertising and marketing
Unity Marketing offers several ways advertising pros can tap into the power of our research to help give direction to your creative endeavors:
Understand a specific market with a Luxury Trend Report: Unity Marketing offers concise trend reports that take an in-depth look at affluent behavior in a particular market. Our most recent, Affluent Consumers and Their Travel Plans 2013, looks at the motivations and behaviors of the affluent consumers when they make travel plans, including a detailed analysis of the attributes they look for in a travel service provider.
Go in-depth: If you need to understand the U.S. affluent market as a whole across a wide range of products and services, you need Unity Marketing’s Luxury Report 2013. This report tracks five years (2008-2012) of affluent consumer behavior, motivations, and spending in the areas of personal luxuries, home luxuries, and experiential luxuries.
Let us help your team: If you need the background and analysis that will ground your creative approach in a specific market or for a specific brand, Unity Marketing can craft a solution for you. Call me at 717.336.1600 or email pam@unitymarketingonline.com.
Advertising agencies and marketers need the intelligence and insight that leads to the perfect pitch
Mad Men has returned for our Sunday night viewing pleasure, and like many Americans, I am once again glued to my TV to watch Don, Roger, Peggy, and the rest of the crew navigate the world of 1960s advertising. And while the fashion has taken a questionable direction as the show heads into 1968 (sideburns and polyester?), one thing remains the same about this show: the thrill of watching a cutting-edge advertising agency find just the right approach to attract customers for their clients.
Get Inspired >>
Creative advertising requires customer insights that only research can provide
I think part of the appeal of Mad Men for those of us who work in marketing and advertising is the intrinsic truthfulness of the creative process. Whether it is hearing Don generate “It’s Toasted” on the fly for a Lucky Strike pitch in the first episode or watching Peggy piece together outtakes to make a campy, late-60s television commercial for Koss headphones in the most recent premiere episode, we recognize that great advertising comes from understanding. However, it is not enough to understand the product; advertisers must dig deeper to understand the consumer’s wants and desires and to be able to predict where consumers are headed and how their behavior changes over time.
This is why Unity Marketing’s cutting-edge research is a natural complement to the work of many advertising agencies and marketers, and why I enjoy working with advertising and marketing professionals. Our research reaches beyond a simple study of high-end products and experiences to take the pulse of the affluent consumer and how he or she behaves. For example, our most recent deep dive into affluent consumers and their travel plans shows that Asia, Australia, and New Zealand are on the travel wish list for many affluent consumers, and that they will look for bargains when booking their trip, but remember personalized service when they get home.
It is this kind of in-depth research your creative team needs to craft the concept, copy, and design that will capture the attention of affluent consumers. This is critical in the current economic climate, as affluent consumers are almost solely responsible for the rebound that signaled the official end of the recession. While lower and middle-class consumers are still mired in difficulty, the affluent consumers are spending more and driving any economic improvements we see.
But these affluent consumers are not spending evenly on all luxuries; instead, they are targeting their spending on products and experiences that make for great memories, and they are careful about finding bargains and trading off among their wants, choosing a luxury brand here, but downshifting to a premium or mass market brand there. These behaviors create many opportunities for the companies that sell to these consumers, but they require advertisers to understand behavioral patterns and craft a message that will hit home, every time. It is a challenge worthy of Don Draper.
And when your client beams with satisfaction and wonder at your understanding of their market? As Peggy once said, “This is as good as this job gets.”
Take Action >>
Unity Marketing delivers insights about your customers that will inspire great advertising and marketing
Unity Marketing offers several ways advertising pros can tap into the power of our research to help give direction to your creative endeavors:
- Understand a specific market with a Luxury Trend Report: Unity Marketing offers concise trend reports that take an in-depth look at affluent behavior in a particular market. Our most recent, Affluent Consumers and Their Travel Plans 2013, looks at the motivations and behaviors of the affluent consumers when they make travel plans, including a detailed analysis of the attributes they look for in a travel service provider.
- Go in-depth: If you need to understand the U.S. affluent market as a whole across a wide range of products and services, you need Unity Marketing’s Luxury Report 2013. This report tracks five years (2008-2012) of affluent consumer behavior, motivations, and spending in the areas of personal luxuries, home luxuries, and experiential luxuries.
- Let us help your team: If you need the background and analysis that will ground your creative approach in a specific market or for a specific brand, Unity Marketing can craft a solution for you. Call me at 717.336.1600 or email pam@unitymarketingonline.com.
Tags: Advertising, marketing
Posted in Uncategorized | No Comments »
December 12th, 2012
Regardless of politics or policies, you must start thinking about growing your business in 2013
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As I look around the world of business, I see an environment that has pushed the pause button. After a divisive and exhausting election season, it is no wonder that American business owners and executives seem to be in a holding pattern. The country spent many tiring months debating its future direction, and now we have emerged from that electoral fight and appear to be headed straight off the fiscal cliff. It is enough to make anyone want to buckle their metaphorical seatbelts and prepare for a bumpy ride.
But taking a wait-and-see attitude toward future economic developments will only put your business further behind in 2013, whichever way the political and economic winds blow. Instead, businesses should be harnessing the power of strategic marketing planning to better prepare for a successful year to come.
Tap the power of strategic marketing planning
Most of us remember the “Four Ps of Marketing” that we learned way back in Marketing 101: Price, Product, Promotion, and Placement. If you want to make improvements in your business, we learned, you make changes in one or more of these areas until you get the right mix for your market.
The advice is good, but it is incomplete. To really succeed in a business climate that is buffeted by change daily, you need to understand two more Ps: Psychographics and Purchase Behavior. While the original “Four Ps” focus on how the business can manipulate its presentation of the product, they leave out the role of the customer. Adding these new Ps gives us a much more complete picture of the climate our businesses operate in.
Unlike demographics which give us the objective facts and figures that describe our customers (e.g. age, income, gender) and tell us who can afford our products, psychographics tell us who has the willingness to buy – among all of our possible consumers, who is the most likely to purchase our item, and what lifestyle clues they give us that tell us how to reach them. Purchase behavior tells us more about what consumer behaviors we need to target to inspire those with the money and willingness to buy to think about and purchase our products.
Understanding and applying the data on psychographics and purchase behavior requires more than a basic understanding of marketing theory; it requires decades of experience. Success requires research – you need to gather facts and figures in order to create winning strategies. And they need to be the right facts: accurate, reliable, dependable and interpreted accurately for your product and your brand. That’s where Unity Marketing comes in.
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A strategic marketing plan will help you assess your current position in the market and create competitive strategies to build your market share
Too many companies are approaching the new consumer environment with the same old strategic marketing plan in place. But the consumer market is very different today than it was two years, five years, or ten years ago. Brands need a plan that is designed for today’s environment and today’s customer: one who is younger and who behaves differently than those from prior generations.
Through Unity Marketing, I offer a consulting service that leverages the experience we have working with big companies and major brands toward helping small and mid-sized businesses grow. I will work personally with you to research your business, explore opportunities and develop a strategic marketing plan customized to your business.
To learn more about the strategic planning process, I have written a white paper, entitled “What, So What, Now What – You’ve Built It, But Will the Customers Come,” that describes the five-step process for creating your own strategic marketing plan. The steps are:
1. Conduct a Needs Analysis – Define your own business objectives, challenges and issues. Focus on the end goal of the marketing plan to see where you ultimately need to go.
2. Conduct a Marketing Audit – This is the research phase of the planning process where you study your existing marketing programs, successes and failures; study results with key partners, staff members, sales reps, media planners, etc.; evaluate marketing and promotional materials, websites, product positioning, pricing, distribution models, etc.; evaluate competitors; investigate target market, customer profiles, etc.
3. Review Your Marketing Report Card – Review the results of the marketing audit objectively and critically. Build a SWOT (Strengths, Weakness, Opportunities, Threats) analysis that clearly lays out the current environment for your product service.
4. Create a Strategic Marketing Plan – With all inputs from the previous phases, develop a strategic marketing plan detailing key strategies for the Four Ps – plus those critical extra two — that will help you connect and build market share with your target customer market.
5. Build in On-going Feedback – And the final critical step is to create milestones and guidepost along the way to measure success, evaluate results, and adjust course as needed.
If you’d like to learn more about strategic marketing planning, download the “What, So What, Now What” white paper by clicking here or call me at Unity Marketing 717.336.1600 or write at pam@unitymarketingonline.com to discuss your marketing challenges.
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December 3rd, 2012
Luxury jewelry customer is changing – Get ready for their changing demands
No doubt you’ve seen the latest headlines on Tiffany & Company, like this from the Wall Street Journal, Tiffany Again Cuts Outlook, with its report that profits dropped 30 percent on “weaker demand, weighed down by high precious metal and diamond costs.”
In studying the analysts’ reports, it looks like Tiffany, which has historically led the luxury jewelry industry, continues to pursue strategies that worked successfully in the past, but may not be appropriate for today’s changing and challenging jewelry market. If Tiffany is set in its ways and keeps repeating its ‘same-old, same-old’ strategies, it gives more adaptable companies an opportunity to capture market share lost by Tiffany.
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Unity Marketing’s latest Luxury Tracking Study finds dramatic changes in the luxury jewelry Market
In our most recent survey of luxury jewelry customers, we found that the share of luxury consumers who purchased jewelry rose from 13 percent to 15 percent. While this measure of demand still lags the 18 percent tracked in 2010, it points to people’s willingness to shop once again for jewelry items.
But what they don’t seem willing to do in the current environment is spend more for the jewelry items they buy. The amount spent on jewelry was down both from previous quarter and same period last year. In the current environment, luxury jewelry shoppers are making choices for less expensive, more affordable jewelry items. In today’s jewelry market value is key and even high income consumers who can afford the real thing are opting for less-expensive metal and gemstone options, as well turning to discounters and other value-oriented retailers to make purchases. The key for jewelry marketers is to create strategies around the new realities of today’s jewelry customers – what they want; what they value; what features, benefits, experiences they are willing to pay more to obtain.
Leo Schachter Diamonds is an innovator that discovered a new way to position the diamonds they sell beyond the traditional 4Cs – cut, color, clarity and carat — that every other marketer uses, but that few customers really understand. The company introduced a new concept, brilliance, that customers can actually see and experience. Rather than having customers look through a loupe to try to see features that only a trained jeweler can really distinguish, Leo Schachter Diamonds translated the concept of cut into what it means to the customers: how brilliantly the diamond sparkles and shines. Brilliance makes a diamond brighter to the customer’s eye and creates a new and meaningful way to communicate the value and quality of a diamond to the customer. You can read more about Leo Schachter Diamond’s luxury marketing strategy in my book, Putting the Luxe Back in Luxury: How new customer values are redefining the way we market luxury.
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Understanding your target customers – and be willing to change direction based upon what you learn – is how to grow your market share in the new luxury market
The way for marketers to grow market share in the current luxury jewelry market is to get down to basics and reexamine the foundation of one’s marketing in light of new consumer expectations, like Leo Schachter Diamonds did. They still deliver the 4Cs that diamond customers expect, but they created an additional value that gives customers a new reason to buy a Leo Schachter Diamond over another brand. That is a powerful competitive edge.
Unity Marketing offers marketers a variety of different solutions to gain deep and powerful consumer insights that will translate into winning marketing strategies for the new luxury market.
- Explore the overall jewelry market – Subscribe to Unity Marketing’s Jewelry Report 2011. This syndicated market research study is the place to start. It outlines the size and growth of the overall jewelry market, both fine and costume; what products are hot and what not; demographics and psychographics of the jewelry customer market; where they shop; favorite brands; and key market trends.
- Pin point promising target customer segments, and delve deeply into their needs and desires. For many jewelry brands, the affluent customer segment is the most promising to pursue. They have plenty of money to spend and their sophisticated lifestyle tends to make them appreciative of higher quality jewelry designs. Unity Marketing conducts an in-depth survey of affluent jewelry customers, their buying preferences and spending habits, four times per year. Marketers can keep their fingers on the pulse of their best customers through Unity Marketing’s Luxury Tracking Study.
- Develop unique marketing and branding strategies to build connections with customers and beat the competition. Understanding the target customer comes first, but marketers must also translate key consumer insights into marketing strategies that will draw the customers in and get them to buy. Unity Marketing can take its vast body of consumer insights and knowledge of luxury marketing strategies to help clients create a winning marketing and branding strategy of their own. If you’d like to learn more about strategic marketing planning, download the “What, So What, Now What” white paper by clicking here or call me at Unity Marketing 717.336.1600 or write at pam@unitymarketingonline.com to discuss your marketing challenges.
Posted in Jewelry Market, Luxury Market | No Comments »
November 29th, 2012
But is your company positioned to take advantage of the rising tide?
As you’ve probably heard, Unity Marketing’s latest Luxury Tracking Survey found luxury consumers’ confidence rose at its fastest pace ever in the fourth quarter 2012. With renewed confidence, luxury consumers spent much more on luxury goods and services as well; total spending was up more than 25 percent from the previous quarter.
But while total luxury spending was up at the individual consumer level, not all segments in the luxury market rose in step. For example, luxury consumers spent less on luxury furniture, lamps/lighting and rugs/floor coverings last quarter, and spending on both luxury home and personal electronics was down as well.
So while the luxury consumer confidence ‘tide’ is rising, that doesn’t mean that all ‘boats’ will necessarily rise along with it. Your company, your brand, your store must be properly positioned now in order to benefit from the improved consumer environment.
Take for example jewelry, the most luxurious of luxury goods categories included in our Luxury Tracking Survey. In the most recent study period, spending on luxury jewelry was down both from the previous quarter and from the same period last year. This cut in spending actually coincided with strong demand, as measured by the share of luxury consumers who made purchases in the category.
Strong demand for jewelry coupled with reduced spending by customers with plenty of cash on hand (the average income for those surveyed in the fourth quarter was $290,600) points to jewelry customers looking for discounts and bargains or trading down to less premium jewelry selections — which is exactly what happened this time.
For example, fine gold jewelry, the category’s typical top seller, was bumped from first place by strong spending on sterling silver; further instead of buying premium-priced platinum jewelry, this quarter’s buyers opted instead for palladium and platinum/rhodium-plate jewelry. Luxury jewelry customers also economized on their gemstone selections, cutting back on diamonds while favoring less-expensive pearl, crystal and faux/manmade gem alternatives.
New patterns emerged in luxury jewelry buyers’ choice of stores in which to shop. Spending at discount stores (think Costco, Kohl’s and other discounters that sell fine jewelry) more than doubled this time. And while Tiffany still ranked as the number one luxury jewelry retailer, its share of jewelry buyers declined by nearly 10 percentage points, which signifies that Tiffany may be losing its edge with luxury jewelry shoppers.
What luxury marketers should take away from this analysis of the jewelry market is that not every brand, every company, every retailer is necessarily going to profit from luxury consumer’s return to the market. Their needs may have changed and the criteria they are using to determine value may be different now. Marketers need to assess their current position and make sure that their brand, their offerings, their pricing, their services line up with today’s, not yesterday’s, luxury consumer.
Take Action>> A strategic marketing plan will help assess your business’ current position in the competitive luxury market
With the economic environment starting to improve and luxury consumers willing to indulge again, businesses need a new road map that will help grow profits now and in the future. Too many companies are approaching the new consumer environment with the same old strategic marketing plan in place. But the luxury consumer market is very different today than it was two years, five years, ten years ago. Brands need a plan that is designed for today’s environment and today’s customer – one who younger and from a new generation than the Baby Boomers who have been the core customer for luxury brands for so long.
Through Unity Marketing I offer a streamlined consulting service that leverages our experience in the luxury market to help small and mid-sized businesses grow. I will work personally with you to research your business, explore opportunities and develop a strategic marketing plan customized to your business.
To learn more about the strategic planning process, I have written a white paper, entitled “What, So What, Now What – You’ve Built It, But Will the Customers Come,” that describes the five-step process for creating your own strategic marketing plan. The steps are:
1. Needs Analysis – Define your own business objectives, challenges and issues. Focus on the end goal of the marketing plan to see where you ultimately need to go.
2. Conduct Marketing Audit – This is the research phase of the planning process where you study your existing marketing programs, successes and failures; study results with key partners, staff members, sales reps, media planners, etc.; evaluate marketing and promotional materials, websites, product positioning, pricing, distribution models, etc.; evaluate competitors; investigate target market, customer profiles, etc.
3. Review Marketing Report Card – Review the results of the marketing audit objectively and critically. SWOT (Strengths, Weakness, Opportunities, Threats) analysis that clearly lays out the current environment for your product service.
4. Create Strategic Marketing Plan – With all inputs from the previous phases, develop a strategic marketing plan detailing key strategies for Product, Price, Promotion, Placement/Distribution that will help you connect and build market share with your target customer market.
5. On-going Feedback and Support – And the final critical step is to create milestones and guidepost along the way to measure success, evaluate results, adjust course as needed.
If you’d like to learn more about strategic marketing planning, download the “What, So What, Now What” white paper by clicking here or call me at Unity Marketing 717.336.1600 or write at pam@unitymarketingonline.com to discuss your marketing challenges.
With the economic environment starting to improve and luxury consumers willing to indulge again, business need a new road map that will help grow the business now and in the future. Too many companies are approaching the new consumer environment with the same old strategic marketing plan in place. But the luxury consumer market is very different today than it was two years, five years, ten years ago. Brands need plan that is designed for today’s environment and today’s customer – one who younger and from a new generation than the Baby Boomers who have been the core customer for luxury brands for so long.
Through Unity Marketing I offer a consulting service that leverages the experience we have working with big companies and major brands toward helping small and mid-sized businesses grow. I will work personally with you to research your business, explore opportunities and develop a strategic marketing plan customized to your business.
To learn more about the strategic planning process, I have written a white paper, entitled “What, So What, Now What – You’ve Built It, But Will the Customers Come,” that describes the five-step process for creating your own strategic marketing plan. The steps are:
1. Needs Analysis – Define your own business objectives, challenges and issues. Focus on the end goal of the marketing plan to see where you ultimately need to go.
2. Conduct Marketing Audit – This is the research phase of the planning process where you study your existing marketing programs, successes and failures; study results with key partners, staff members, sales reps, media planners, etc.; evaluate marketing and promotional materials, websites, product positioning, pricing, distribution models, etc.; evaluate competitors; investigate target market, customer profiles, etc.
3. Review Marketing Report Card – Review the results of the marketing audit objectively and critically. SWOT (Strengths, Weakness, Opportunities, Threats) analysis that clearly lays out the current environment for your product service.
4. Create Strategic Marketing Plan – With all inputs from the previous phases, develop a strategic marketing plan detailing key strategies for Product, Price, Promotion, Placement/Distribution that will help you connect and build market share with your target customer market.
5. On-going Feedback – And the final critical step is to create milestones and guidepost along the way to measure success, evaluate results, adjust course as needed.
If you’d like to learn more about strategic marketing planning, download the “What, So What, Now What” white paper by clicking here or call me at Unity Marketing 717.336.1600 or write at pam@unitymarketingonline.com to discuss your marketing challenges.
Tags: Jewelry Market, Luxury Market, strategic marketing planning
Posted in Jewelry Market, Luxury Market | 1 Comment »
September 20th, 2012
Can your stationery brand reach a luxury clientele? Find out with a deep-dive into the mind of the customer who values high quality stationery and paper goods
Get Inspired>>
Stationer Smythson expands into a lifestyle brand by finding new connections between its paper products and the customers’ needs
In honor of its 125th anniversary high-end British stationer Smythson has refurbished and expanded its Bond Street store, under the direction of former Burberry executive Andy Janowski. Bringing a new luxury lifestyle approach to the brand, Janowski and his design team, which includes British Prime Minister David Cameron’s wife, Samantha, doubled the store’s selling space by converting backroom offices. Now the store showcases an expanded range of goods, most notably leather goods, which team superbly with the brand’s fine writing papers.
“It’s about celebrating our extraordinary legacy and bringing it to life in an expression of contemporary classicism. It’s a translation of Smythson’s intrinsic identity, and the key is in the detail. The concept of the store is not just spatial or visual; it’s a comprehensive, sensory experience.” – Samantha Cameron, Smythson creative consultant
By thinking outside of the traditional stationery box, the design team expanded the new store to feature leather-bound notebooks and sketchbooks; leather covers for high-tech tools including iPads, iPhones and Kindle readers; wallets, handbags and briefcases, including an ultra-luxe $23,220 snakeskin and crocodile bag.
In the bespoke stationery department, Symthson offers an expanded range of customization options, from gold stamped initial to personalized messages, even a personal child’s sketch embossed on a leather book which makes a great gift for proud parents or grandparents.
The new store also added a men’s accessory room, which includes belts, and a new home collection showcasing picture frames, cashmere throws and leather-covered trays.
Coinciding with the new Bond Street opening, the company has revitalized its internet website to include films that highlight the history and the craftsmanship of the brand. The other eleven Smythson retail outlets are planned for similar renovation with the goal to transform how the high-end customer experiences the brand. Janowski says, “We want people to say ‘Wow!’ What a lovely shopping experience at Smythson. And we want to make sure shoppers find the same luxury online as they do in the store.”
Smythson is a traditional stationery brand that has searched out and identified new needs among its high-end clientele and so extended its reach beyond writing papers into a whole range of related lifestyle goods. The company’s success is tied to willingness to invest in consumer insights, then deliver on opportunities discovered.
Your brand can do this too – Develop a plan for business growth through a study of the customer’s needs. Unity Marketing offers an opportunity to delve deeply into the mind of the stationery consumer through a sponsorship for a joint research study of the stationery, greeting card and paper goods market.
Take Action>>
Participate in a new consumer insight study to discover the needs of customers for stationery, paper goods and greeting cards
Unity Marketing has designed a major new research study to help to marketers and retailers of stationery, greeting cards and fine papers for crafting and hobby uses understand the evolving needs of their customers. The research will help that marketers identify and take advantage of the emerging opportunities within the category for consumers’ shifting needs.
Click this link to learn more about the new study.
This research will give marketers and retailers with a commitment to understanding their current and future customers a cost-effective solution for customized consumer research.
Unity Marketing will conduct a quantitative consumer survey which will focus on both greeting card, stationery and paper goods buying behavior, including product choices, shopping destinations and overall spending, as well as the motivations and drives that propel the consumer in the marketplace.
We will learn about both male and female buying patterns, as well as the different motivations that drive consumers in their quest for these goods. We will also explore the generational aspects of this market. We will learn how the younger and older consumers for paper goods differ in their product preferences and buying and shopping behavior.
Research sponsors guide and direct the research so that it meets their specific needs
In order to make sure that this new consumer research focuses on the issues of most importance to greeting card, stationery and paper goods marketers and retailers, Unity Marketing offers sponsorships to companies who want to be more involved in the research. As a research sponsor, your company will be involved in both the qualitative and quantitative research development. The research will be ’semi-custom’ as company sponsors will contribute directly to the research. Here are the deliverables:
Input on the questions included in the survey, including addition of questions
- Your company’s major product category and/or type of store included in the survey
- Your company’s brand name will be included in the brand awareness and purchase incidence questions
- Topline quantitative survey results with demographic cross-tabs within one week of survey fielding,
- Detailed analysis report
- Webinar and telephone consultation about key findings and implications.
Most importantly, you will get an early read on the results of the research ahead of everybody else and insider information only available to sponsors.
Sponsors get the competitive edge
As a sponsor, you’ll participate in learning what drives the greeting card, stationery and paper goods buyer in shopping and product selection. You will discover how to tap into consumers’ passion for these goods in order to design new products to meet new needs. You will learn how to sell more of your company’s or store’s products. You’ll get a view ‘over the horizon’ about where the paper goods market is going and find out how to get out in front of the consumer.
Exclusive sponsorships are also available for marketers that want to maximize their competitive edge.
So if you are interested in participating in the stationery goods research project, please call me at 717-336-1600, complete the request form by clicking here or respond by email to pam@unitymarketingonline.com right away. Tme is limited, as we want to get into the field with the new survey shortly to deliver results before year’s end.
Posted in Lifestyle Branding, Luxury Market, Retail | 1 Comment »
September 10th, 2012
Affluent consumers face not just stagnant, but declining incomes — which challenges marketers at the upper-end of the market
The latest news cycle carried a story that caught my eye – Jay Leno, host of The Tonight Show,  just took a 50 percent pay cut! While his adjusted annual salary of $15 million still puts him among the very highest earners in the country, it points to an unsettling trend that is happening among the affluent: a trend toward downward income mobility. Â
Once unheard of, the downward mobility of the luxury class presents special challenges to marketers that target this elite group of upper-income customers. What happens when affluent customers just aren’t willing to ‘pay to play’ in the luxury market any longer?Â
Get Inspired>>
Research shows the fortunes of the affluent are not so fortunate any longer
The Census Department provides the authoritative look at the American people’s income and it presents a sobering view of where the American population stands in terms of income. Under a link entitled Income Inequality, you’ll find the latest data on the key income segments in the population. For example, in 2010 dollars, the income that defines the affluent top 20 percent has declined nearly 5 percent in the five-year period from 2006 to 2010 and it was basically flat in the preceding five years from 2001 to 2005.  By contrast the income limit grew 10 percent from 1996 to 2000 for the top quintile. At the top 5 percent of incomes, the trends are basically the same, rising rapidly from 1996-2000, flattening out from 2001-2005, then moving down from 2006-2010.Â
The average income for the affluent 20 percent and top 5 percent tells an even more explicit story of downward mobility among the affluent. Average income for a household at the top 20 percent dropped 7.5 percent from 2006 to 2010 and 12.7 percent for the top 5 percent in the same period. For the five preceding years, average income for both the top 20 and top 5 percent was flat, after having risen a stunning 14.3 percent from 1996-2000 for the top 20 percent and 17.1 percent for the top 5 percent.
I apologize for reciting all those numbers (call me at 717.336.1600 if you’d like to see the data) but the picture that it paints is an affluent consumer segment, the prime target for luxury marketers, that is experiencing a real drop in their income. Because these same consumers are significantly invested in their high-end lifestyle with income committed to a wide-range of fixed expenses to maintain that lifestyle, it’s in discretionary spending where they are going to take their cuts. So that translates into less money to spend each month for clothes, shoes and handbags, jewelry and home decorative accessories. These folks have plenty of all that stuff already, so it is the easiest, most painless way to adjust one’s budget when there is less money coming in each month.
 That said, while the average income of a household at the top 5 percent may have declined from $358,700 in 2006 to $313,298 in 2010 – a painful 13 percent drop – those $300k+ households still have tremendous spending potential. That just brings into focus luxury marketers’ new challenge: to compete more aggressively for the remaining discretionary spending power of those top 5 percent.
Take Action >>
Research-based insights into the minds and motivations of luxury consumers is key to beating the competition
Gaining new insights into the purchase motivation and spending power of the affluent consumer market is critical for luxury marketers to create a marketing strategy that will position their brand to beat the competition. The days where the affluent 5 percent could ‘shop till they drop’ are over – Reduced income means consumers, even the affluent, have to be more selective about where and how much they spend. That is one reason a value-oriented marketer like Costco is so successful today.Â
Unity Marketing can help luxury marketers gain new research-based consumer insights that can be used to find a new path to success in an increasingly competitive marketplace for luxury spending.Â
- The Luxury Report 2012: The Ultimate Guide to the Luxury Consumer Market: This annual report gives you a top-level view of the behavior of affluent consumers over the past four years, including their favorite brands and retail destinations and the amount spent on luxury in a variety of home, personal, and experiential categories. It probes into key demographic segments in the affluent consumer market, including differences in purchase behavior by gender, age, income and wealth.
- Unity Marketing’s Luxury Tracking Study & LCI: Providing the source data for the annual luxury report, this customized quarterly survey of 1,200+ affluent luxury consumers gives marketers detailed tracking information about current luxury purchases and spending, as well as forward-looking guidance on future shifts in luxury consumer behavior in Unity Marketing’s proprietary Luxury Consumption Index (LCI), a measure of affluent consumer confidence that historically predicts shifts in luxury consumer spending in subsequent quarters.
- Wealth Wave: Millennials and their Luxury Aspirations: This in-depth report, which includes an executive summary of key findings and take action strategies, plus the detail focus group report with quotes and summary of the discussion, gives marketers new insights into the future direction of the next generation of luxury consumers that will come to the fore in the consumer market starting about 2018 or so. Get ahead of the curve by studying the differing needs and desires of your future luxury customers. This report will be especially valuable to luxury brands in these key core segments which were discussed in the groups: luxury jewelry; fine dining; luxury hotels and hospitality; luxury fashion, apparel and fashion accessories; luxury wine; and luxury retail including online and internet shopping destinations.
Tags: affluents, costco, downward mobility, income demographics, Luxury Market
Posted in Luxury Market | No Comments »
September 6th, 2012
The future success of luxury brands will be determined by the emerging customers and how well the brands anticipate their special needs and desires
With a focus on the future, the 2012 Obama campaign has chosen “Forward†as its campaign slogan. Inevitably it focuses people’s attention on the next four years and the hope for a second Obama administration to bring more prosperity and opportunity to the American people.Â
I like the slogan and believe that it should be used not just in politics, but adopted widely by marketing executives as a motto to focus on the future. They need to discipline themselves to think beyond the next quarter or two, beyond the next year and to the next four years, eight years, even ten years. For luxury brand marketers, in particular, they need to be looking beyond 2016 and to the presidential election of 2020, two election cycles out. For it is in 2020 that a new generation of Millennial consumers will reach critical mass in the affluent market. Their arrival will inevitably change the entire luxury brand business model, especially how marketers will deliver a luxury experience to this new generation of consumers.
We can predict the future of the luxury consumer market
In my recent book, Putting the Luxe Back in Luxury: How new consumer values are redefining the way we market luxury, I devoted several chapters to the demographics of the affluent consumer market. The beauty of demographics for marketers and business planners is that population demographics are highly predictable. We can look at birth and death rates, immigration statistics and other quantifiable trends to project the makeup of the population five-ten-twenty years out and more.Â
Also highly predictable is who will reach affluence in the future. People who achieve affluence share many common characteristics, specifically high levels education, ambitious career goals in fields that are associated with high financial rewards, and a stable personal life that makes people highly likely to marry and invest in community by buying a home.  By combining quantifiable demographic projections with our understanding of how people achieve affluence, we can very reliably predict those young people in the Millennial generation, born between 1981- 2000 and aged 12-31, who are on the road to affluence and thus those people who will be the target customer for luxury brands in the future.Â
Since affluence comes with middle-age, as people’s income reaches its zenith from ages 35-to-54 years, we know that affluent Millennials will take over as the largest generational segment in the luxury consumer market around 2018-2020. These will be the “Forward†years for luxury brand marketers to focus on.
Unity Marketing recently selected a group of ambitious, high-achieving, highly-educated Millennial generation young people and conducted a series of focus groups to understand their attitudes, values, aspirations and expectations for their future. We talked about issues of greatest import to luxury brand marketers for the future of their businesses, including:
- Money — What money really means to them, what they are willing to do to get lots of it, how important it is in their lives, and what they will do with it once they get it Â
- Their American Dream – How they see their future, what their personal lifestyle dreams and aspirations are, how they define their “American Dreamâ€
- Materialism – Their drive to acquire material luxury goods; their aspirations to achieve the ‘good life’
- Status symbols – What status means to them, how they display their status
- Luxury – How they define as luxury and its role in their lives
- Deep-dive into key sectors of the luxury market, specifically luxury jewelry, fine dining, luxury fashion, luxury hotels, luxury wine and luxury shopping and shopping experiences, including stores and online destinations.
The results of this research into the future customers of the luxury market has now been published in an in-depth report, entitled Wealth Wave: Millennials and their Luxury Aspirations, which includes  a future look Millennials expectations in the luxury jewelry, fine dining, fashion, hotel, wine and retail markets. Â
Get Inspired>>
Each generation defines what luxury is –
Millennials will bring their own unique perspective and expectations into the marketplace
Unity Marketing’s investigation into the mindset of these ambitious young people on the road to affluence uncovered many distinct differences and unique generational perspectives of critical importance to the future success of luxury brands. But perhaps the most profound and potentially troubling one is that for this generation of well educated young people, there is a real danger that luxury is going to be perceived simply as a marketing concept or a term used in a marketing context, not something that has real meaning or resonance to their lives. Â
Simply calling a brand, a product or an experience a luxury doesn’t necessarily make it so, as this discussion from the focus group reveals:
“I can’t remember the last time I’ve actually said the word luxury or luxurious in a sentence. I hear it in a Lexus commercial, but never just talking to my wife or my parents would I say, “I had a luxurious day. [Another] I’d second that. [Mod: Does that mean it [i.e. luxury] doesn’t really mean anything to you?] It’s watered down. It’s just watered down.”
Take Action>>
Anticipating the future needs and desires of luxury consumers is possible –
Plan now for the evolution of a new luxury market brought about by the turnover of a new target generation
As of yet, the Millennials have not made a significant dent into the luxury market, being still in school or just starting out in their careers and not yet having ascended into the affluent market. Yet these ambitious, highly-educated young people are luxury brands’ future customers, and the future leaders of business. By 2020 the Millennial generations’ tastes, appetites and desires for luxury lifestyles will be strongly felt. For forward-focused marketers it could mean a coming luxury boom. Or it could also be a bust for those that ignore the profound changes this generation will bring.
“It’s easier for companies to come up with new ideas than to let go of old ones.†– Peter Drucker
Understanding the aspirations of Millennials for a luxury lifestyle is critical for luxury brands, including what money, status, and success means to them.  Luxury marketers will need to both innovate with new products, services, marketing strategies and branding concepts, as well as let go of old ideas that will prove ineffective, even counterproductive, for marketing to this new generation. Unity Marketing has solutions to help you understand the future luxury market and make “Forward†the slogan for your brand:
- Putting the Luxe Back in Luxury – My book looks at both the present and future direction for the luxury market and includes the forward-looking data on the demographics of luxury to help you plan for your business’ future.
- Wealth Wave: Millennial and their Luxury Aspirations – This in-depth report, which includes an executive summary of key findings and take action strategies, plus the detail focus group report with quotes and summary of the discussion, gives marketers new insights into the future direction of this generation that will come to the fore in the luxury market starting about 2018 or so. Get ahead of the curve by reading and studying your future customers. This solution will be especially valuable to luxury brands in these key core segments which were discussed in the groups: luxury jewelry; fine dining; luxury hotels and hospitality; luxury fashion, apparel and fashion accessories; luxury wine; and luxury retail including online and internet shopping destinations.
- Create a “Forward†strategy for you brand —  Need a customized marketing solution that will help you anticipate the future customers for your brand, then call me at 717.336.1600 or email pam@unitymarketingonline.com  to discuss your needs.
 Â
Tags: Future Luxury Market, Generational Shift, millennials
Posted in Luxury Market | No Comments »
August 27th, 2012
When it comes to the consumer market in general — and the luxury market in particular –Â Romney emerges as candidate best for business
Over 30 years ago, Ronald Reagan ran a successful presidential campaign based in part on the question, “Are you better off now than you were four years ago?â€Â Twenty years ago, Bill Clinton did likewise with the no-nonsense campaign focus, “It’s the economy, stupid.â€Â
Regardless of social issues or international conflicts that may be debated, elections often come down to economics, and this year, we are waiting to see which man – Obama or Romney – will convince the country of the wisdom of his economic plan. I believe luxury marketers should be crossing their fingers, hoping for a Romney victory.
Under President Obama, we have seen the country split in half as the president failed to deliver on a number of promises for his first term – today, unemployment stands over two percentage points higher than his goal, and real median household income has dropped by 5 percent. We have reached the staggering point at which half the country pays taxes, and half don’t, according to the Heritage Foundation. What’s more shocking, nearly 110 million individuals – one-third of all Americans  – are receiving some kind of federal welfare, according to statistics produced by the Senate Budget Committee Republican staff.  And those 110 million welfare recipients don’t even include those receiving Social Security or Medicare.
It is in this climate that President Obama made one of his most tone-deaf statements to date: “If you’ve got a business, you didn’t build that.â€Â Pundits and politics-watchers have endlessly debated the context and the hand gestures and body language surrounding that statement, but one thing is clear. The president’s attempt to laud government’s role in business as the unsung creator of infrastructure was rightly heard by business owners to mean that government, not the individual, should get the credit for the worry, late nights, and financial risk it takes to build and run a business.
Into this questionable business climate comes Romney, whose personal experience in business is buttressed by the selection of Paul Ryan as his vice-presidential nominee. In the Romney/Ryan ticket, we see a definable plan for economic growth and control of governmental spending that is friendly to business and to affluent business owners.
This is not to say that Romney has not hit a few sour notes. His affluent lifestyle, which allows him the luxury of a garage with a car elevator and his wife to be deeply involved in the pricey hobby of dressage, seems to be at odds with a global trend away from conspicuous consumption. In Greece, owners of swimming pools are becoming targets for tax investigations, leading these affluents to camouflage their luxuries; in the U.S., we are seeing a milder form of this as affluents shy away from luxury goods with visible logos. The Romneys will need to find a way to mute their lifestyle if they are going to truly appeal to small business owners whose daily luxury runs more to a latte from Starbucks than a ride on a pedigreed horse.
Get Inspired>>
Affluent consumers are waiting in state of ’suspended consumption’
Nonetheless, I believe the Romney/Ryan ticket is the best for business, and my research shows that affluent consumers are waiting for the election before they commit to greater spending or hunker down to weather a coming economic storm in a second Obama administration. In Unity Marketing’s proprietary Luxury Consumption Index (LCI), which consistently predicts shifts in GDP, we see affluent willingness to spend see-sawing up and down through the past few quarters, taking another dip in the most recent study. This combines with our most recent Luxury Tracking research, which shows luxury consumers cut back their level of luxury spending during the second quarter (April-June) by 8.2 percent from first quarter. The decline in spending was even more pronounced comparing year-over-year, down 26.9 percent.Â
I believe affluent consumers are in a state of “suspended consumption,†waiting for the results of the election. An Obama victory will signal to these heavy lifters in the consumers economy that their work is not respected, and that both the government and the electorate is suspicious of their success. They will cut further back on luxury purchases in order to fly under the radar, not marking themselves as part of – or a potential part of – the one percent.
A Romney victory, on the other hand, will signal a greater governmental friendliness to businesses of all sizes and to the ultra-affluents and HENRYs that run and manage them. A Romney win will be better for business as a whole and for the luxury marketplace in particular.
Take Action>>
Learn more about the luxury marketplace and the affluent consumers
There is little we can do to impact the results of the national election, but we can better understand the affluent consumer that buys luxury goods and services and respond when election results come in.Â
- Get the Overview: My latest book, Putting the Luxe Back in Luxury, details how consumers’ values impact their buying decisions and vital data about the demographics of affluent consumers.
- Understand the Climate:Â Our latest Luxury Tracking Study covering the second quarter 2012 shows how consumer behavior is changing now, along with examining the LCI in depth and how it predicts future economic behavior.
-  Take it to the Next Level: Need a customized marketing solution that will see you through the election and beyond? Contact me at pam@unitymarketingonline.com or 717-336-1600.
Tags: LCI, Luxury Tracking Study, Obama, Presidential Election, Romney
Posted in Luxury Market | No Comments »
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