February 9, 2011
Affluent consumers are regaining confidence post-recession and the outlook for the luxury goods industry is improving, according to a study from Unity Marketing.
The study found that Unity Marketing’s measure of affluent consumer confidence, also known as the Luxury Consumption Index (LCI), reached 76.1 for the first quarter this year. This number rose 4 points from an identical survey fielded in the same time frame in the fourth quarter of 2010.
“The steady LCI incline in 2011 is a positive message that affluent consumers are seeing an improvement,” said Pam Danziger, president of Unity Marketing, Stephens, PA. “There has been a more sustainable upward trajectory in terms of their confidence.
“We are seeing young, affluent consumers dominate the luxury market for the first time ever in Unity Marketing’s luxury tracking study,” she said. “Young affluents are being more highly represented in the study.
“A lot of the older, baby boomer affluents are still sitting on the sidelines. The problem with that is that there are not nearly as many young affluents as there are baby boomers.”
Unity’s study surveyed 1,237 affluent consumers with average incomes of slightly more than $300,000 per year. The survey was conducted Jan 6-13.
The new report compares the most current 2011 data with information gathered during 2010, 2007 and 2005.
Findings
Affluent consumers backed up their growing confidence by spending 4.1 percent more on luxury goods as compared with the same period last year.
Categories that posted the strongest growth year-over-year as measured by the average amount spent by luxury shoppers included high-end cooking tools, kitchenware and houseware, electronics and luxury travel, with luxury cruises rating the highest.
“What it means that people were buying more focused, more narrow across this category of luxury and not other categories,” Ms. Danziger said. “Home in particular is where people can spend an awful lot of money.
“The data tells me that affluents are investing in their homes, remodeling and we also saw a strong uptick in outdoor luxury—patio improvements and furniture,” she said. “That was a surprisingly strong category.
“The demand for the post-recession is people starting to release that and continue to turn their focus to home.”
Final Take
Pam Danziger discusses why luxury consumers matter
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