November 16, 2012
Luxury marketers should consider young affluents as an influential group to drive revenue since this demographic is spending approximately twice as much as mature affluents, according to a new survey from Unity Marketing.
The Luxury Tracking Survey found that younger affluents are more likely to use mobile devices than mature affluents. Therefore, marketers should focus on mobile efforts rather than social media since the growth of social media has remained stagnant over the years.
“To target young affluents, mobile media rather than social media needs to be part of your plan because I think social media has reached its plateau," said Pam Danziger, president of Unity Marketing, Stephens, PA. "The focus needs to be on mobile media because that is what young people are using now."
The Luxury Tracking Survey is a longitudinal study of the luxury consumer market. It is conducted quarterly and started in January 2004. Approximately 5,000 luxury consumers are surveyed on an annual basis.
Seeing the future
The latest results from the survey conducted during the third quarter of 2012 as well as the measures from the Luxury Consumption Index show that most luxury consumers have a strong sense of confidence.
The survey found the most growth in the Luxury Consumer Index between the second and third quarters of 2012.
This confidence could translate to more spending in early 2013.
“I am optimistic and I think with this large increase this quarter, we may well see continued growth for the luxury consumer,” Ms. Danziger said. “When consumers believe their income is stable and they feel confident then spending will increase.
“I feel confident that we will see continued strength in the luxury consumer spending going into 2013,” she said. “We’re going into 2013 with a very strong and very confident group of people.”
The survey also tracked data for 21 categories of luxury goods and services.
Luxury clothing and apparel was the fastest growing category in the third quarter of 2012.
Although the future is still uncertain, luxury consumers are more important to the economy than in previous years.
"Affluent consumers today contribute more to the economy now than they did from 1980-2000," Ms. Danziger said. "The middle class has come out of the recession in a weaker position, so the affluent consumers are going to become more important to marketers."
Mobile minded
One key takeaway from the study is that luxury marketers should target young affluents differently than mature affluents.
Social media remains an important tool as 86 percent of young affluents and 77 percent of mature affluents have one or more profiles on a social media Web site. However, that number has remained stagnant since 2010, per Ms. Danziger.
Moreover, 59 percent of young affluents compared to 44 percent of mature affluents use their mobile devices to check prices, make purchases and comparison shop.
The most popular luxury mobile applications are BMW, Mulberry and Mercedes-Benz, per the survey.
Other popular luxury brand apps are those from Chanel, Louis Vuitton, Neiman Marcus, Gilt On-the-Go and Tiffany & Co.
The survey also found that consumers aged 45-64 years have the highest level of income, but have significantly lower levels of spending on luxury goods.
Furthermore, young affluents who are indulging in luxury goods are much more positive about the future than mature affluents.
“What is most interesting is that age is going to become the single predictor of spending,” Ms. Danziger said. “If you have an older customer base then they are going to be less likely to indulge than a younger customer base.”
Final take
Erin Shea, editorial assistant on Luxury Daily, New York
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