Unity Marketing's Experiential Luxury Report 2008 is the definitive study of the luxury consumers' buying and spending preferences, written by Pam Danziger, the nation's leading expert on the 'new luxury' market.
This report provides vital market size, growth and demographics for anyone and everyone that sells luxury, from marketers, advertisers, retailers, service providers. The Experiential Luxury Report 2008 is an essential tool to understand the dynamics of the luxury market, today and into the future.
This important new study of the luxury market provides the results of a two-year longitudinal research study of the luxury market conducted quarterly. This report is compiles detailed statistics collected in twelve waves of Unity's quarterly Luxury Tracking surveys during 2005, 2006 and 2007. In each of the three study years over 4,000 luxury consumers were surveyed. Specifically in the 2007 survey a total of 4,284 luxury consumers were surveyed, with an average income of $155,100; average age of 45.2 years including 64 percent female and 36 percent male respondents.
Details about services included in Experiential Luxury Report 2008
Details about what these luxury consumers bought, how much they spent, where they made their purchases, and in certain categories the luxury brands they patronized are reported.
Experiential Luxuries
- Dining
- Entertainment
- Home Services (House cleaning/maid; lawn care; landscaping; party planning/catering; home decorator/designer; pet care; pool maintenance)
- Spa, Massage, Beauty and Cosmetic Services
- Travel (Foreign and domestic luxury hotels, commercial air, resorts, cruises, group tours, adventure travel, private air travel), including favorite brands of luxury hotels.
This report provides the facts and figures you need to develop winning marketing and business strategies. By working with the facts, not fantasies, you have a much better chance of success marketing to the luxury consumers. This report gives you a horizontal view of the luxury market, recognizing that luxury marketers compete not just with companies within their vertical product niche, but across all luxury categories as well.
Within each category of luxury, the key drivers for purchase are studied, such as role of luxury brand in purchase decision; the influence of sales price on purchase; where the shopper bought their last luxury; why they bought luxuries; whether their luxury purchases were made a gifts; and other motivational factors.
Special feature: Find out which of the five different types of luxury consumers are your best customers
A special feature in Unity Marketing's Experiential Luxury Report 2008 is a psychographic profile of the five key types of luxury consumers, including a newly discovered luxury personality, the Temperate Pragmatist. These include:
- X-Fluents (Extremely Affluent) who spend the most on luxury and are most highly invested in luxury living;
- Butterflies, the most highly evolved luxury consumers who have emerged from their luxury cocoons with a passion to reconnect with the outside world. Powered by a search for meaning and new experiences, the butterflies have the least materialistic orientation among the segments, yet they spend nearly as much as the X-Fluents on luxury;
- Luxury Cocooners who are focused on hearth and home. They spend most of their luxury budgets on home-related purchases;
- Aspirers, those luxury consumers who have not yet achieved the level of luxury to which they aspire. They are highly attuned to brands and believe luxury is best expressed in what they buy and what they own.
- Temperate Pragmatist a newly emerged luxury consumer who is not all that involved in the luxury lifestyle. As their name implies, they are careful spenders and not given to luxury indulgence.
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- Chapter 1 — About the Luxury Market
- Figure 1: Leading Luxury Marketers Revenues, 2004-2007
- Some 35 million Households Rank among the Nation's Top 25 percent
- Figure 2: Number of Households by Income, 2004 -2006
- Fastest Growing Affluent Households
- Figure 3: Total number of affluent households
- Demographics of the Top 25 Percent of Americans
- Figure 4: Household income by age, 2006
- Affluents Make More, Spend More and Save More
- Figure 5: Annual expenditures, 2006: Average U.S. households compared with affluent
- Trends in Affluence
- Increasing Diversity in the Luxury Market
- Figure 6: Diversity of Luxury Market
- Lifestage Changes Impacts the Luxury Market
- Figure 7: Triggers for luxury purchases, 2006 & proj. 2007 (Source: Luxury Tracking, 4Q06)
- Luxury Consumers’ Plans for Home Changes
- Figure 8: Home Changes 2005 (2Q2005 Luxury Tracking), 2006 and proj. 2007
- Luxury Consumers Rose from Middle-class Backgrounds
- Figure 9: Financial status of family of origin (Luxury Tracking, 2Q04)
- New Luxury Market Paradigm — From Things to Experiences
- Experiences Provide the Greatest Luxury Satisfaction
- Figure 10: Source of Greatest Luxury Satisfactions (1Q2006 Luxury Tracking) 22
- Figure 11: Sources of Greatest Luxury Satisfaction by income
- Chapter 2 — Luxury Market Top line Findings
- Luxury consumer spending declines sharply in second half of 2007
- Figure 12: Luxury Consumption Index thru 4Q2007
- Luxury marketers are feeling the pain too, as luxury consumers hold back on spending
- Five measures of luxury consumer confidence dropped sharply
- Luxury Consumers’ Feelings of Financial Well-Being
- Figure 13: Financial Well Being
- Luxury Consumers and Reported Spending Trends
- Figure 14: Luxury Spending Trends Past Twelve Months
- Luxury Consumers and Their Spending Expectations
- Figure 15: Expected Spending on Luxury Next 12 Months
- Luxury Consumers’ Confidence in Financial Health of the Country
- Figure 16: Overall Financial Health of Country
- Luxury Consumers Confident of Their Personal Ability to Handle Economic Turmoil
- Figure 17: Financial Prospects Next Twelve Months
- Predictions for the Luxury Market through 2008
- Total Luxury Purchase Incidence
- Figure 18: Overall Luxury Purchase Incidence (All Affluent Consumers), 2005-2007
- Luxury Purchase Incidence
- Figure 19: Luxury Purchase Incidence, 2005-2007
- Luxury Consumers’ Average Spending
- Figure 20: Average Spending on Luxury, 2005-2007
- Luxury Spending by Income Segments in 2006
- Figure 21: Luxury Spending by Income Segment, 2006-2007
- Luxury Spending by Age Segment
- Figure 22: Luxury Spending by Age - 40 and Under and Over 40. 2006-2007
- Luxury Spending by Gender
- Figure 23: Luxury Spending by Gender
- Overall Luxury Spending by Segment Summary
- Figure 24: Luxury Spending by Segment Summary, 2006-2007
- Luxury Consumers Remain Value-Oriented
- Figure 25: Most Recent Luxury Purchase Bought on Sale or at a Discount (4Q2006 Luxury Tracking)
- Overview Where Luxury Consumers Shopped
- Figure 26: Where People Shopped for Home and Personal Luxuries
- Luxury Shoppers’ Favorite Luxury Department Stores and Mass/Discount Stores
- Figure 27: Store Brand Usage for Any Luxury Shopping
- Luxury Consumers’ Favorite Magazines
- Figure 28: Luxury Consumers Favorite Magazines
- Chapter 3 — Experiential Luxuries
- Purchase Incidence of Experiential Luxuries
- Figure 29: Experiential Purchase Incidence, 2005-2007
- Spending on Experiential Luxuries
- Figure 30: Experiential Luxury Spending, 2005-2007
- Luxury Dining — Purchase Details
- Amount Spent on Luxury Dining
- Key Influencers for Dining Purchases
- Figure 31: Fine Dining Key Influencers for Purchase (2Q2006 Luxury Tracking)
- Luxury Entertainment — Purchase Details
- Amount Spent on Luxury Entertainment
- Key Influencers for Entertainment Purchases
- Figure 32: Entertainment Key Influencers for Purchase (2Q2006 Luxury Tracking)
- Luxury Home Services — Purchase Details
- Type of Home Services
- Figure 33: Type of Home Services Bought
- Amount Spent on Luxury Home Services
- Key Influencers for Home Services Purchases
- Figure 34: Home Services Key Influencers for Purchase (2Q2006 Luxury Tracking)
- Luxury Spa, Massage and Beauty Treatment — Purchase Details
- Amount Spent on Luxury Spa, Massage and Beauty Treatment
- Key Influencers for Spa & Beauty Treatments Purchases
- Figure 35: Spa and Beauty Services Key Influencers for Purchase (2Q2006 Luxury Tracking)
- Luxury Travel — Purchase Details
- Amount Spent on Luxury Travel
- Foreign Travel Choices
- Figure 36: Type of Foreign Travel Bought
- Domestic Travel Choices
- Figure 37: Type of Domestic Travel Bought
- Key Influencers for Travel Purchases
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- Figure 38: Travel Key Influencers for Purchase (2Q2006 Luxury Tracking)
Luxury Hotel Brand Usage
- Figure 39: Luxury Hotel Brand Usage
Chapter 4 — About Luxury Consumers' Attitudes toward Luxury
The Extent of Luxury - How Invested Are Luxury Consumers in their Luxury Lifestyles?
- Figure 40: The Extent of Luxury in Luxury Consumers' Lives -- the Good,
Better, Best and the 'I just don't care all that much'
Their approach to a luxury lifestyle is tied to how much they spend on luxuries
- Figure 41: Spending on Luxury 2Q2007 based upon good, better, best attitudes
Changing Personalities in the 'New Luxury' Market
Luxury consumers remain highly experiential and there are signs they are becoming even more experiential
- Figure 42: Attitudes about Luxury, 2007 & 2003 surveys
A New Luxury Consumer Personality Emerges — Temperate Pragmatist
- Figure 43: Personalities of Luxury, 2007 & 2003
- Figure 44: Attitudes about Luxury by Personality Segment, 2007
Introducing the Five Luxury Consumer Personalities
Luxury Personalities and Their Spending on Luxuries
- Figure 45: Average Spending on Luxury by Personality Types
Personalities' feelings about their current financial status and future status
Demographics that define the personalities
- Figure 46: Average Income by Personality
Field Guide to the Five Luxury Personalities
- Figure 47: Field Guide to the Luxury Personalities
Chapter 5 — Luxury Consumers & the Internet
Introduction
- Figure 48: Electronic Shopping and Mail-Order Retail Sales, YTD 2006-2007 and 2005-2006
Internet Is Growing in Importance in the Lives of Luxury Consumers
Social networking is not just for kids anymore -- Even luxury consumers do it
- Figure 49: Visited Social Networking or Social Shopping Sites Past Three
Months (July-September 2007), by Age
Luxury consumers used multi-media strategy combining magazines and Internet to research purchases
- Figure 50: Use of Magazines To Learn About Internet
Magazines play important role in making luxury consumers aware of new Internet sites
- Figure 51: Role of Magazines in Making Consumers Aware of New Websites
Luxury Consumers Were Most Drawn to the Internet to Visit a Trusted Online Retailer or as the
Result of an Internet Search
- Figure 52: Factors that Drew Luxury Consumers to Particular Website in Past
Three Months (July-September 2007)
About Half of Home & Personal Luxury Shoppers Used the Internet to Support Their Purchases -
Almost All Luxury Travelers Used the Internet
- Figure 53: Use of the Internet to Support Purchases, by Product and Service89
People who used the Internet to support their purchases tended to spend more overall
- Figure 54: Average Amount Spent by Luxury Consumers by Product Category and Use of Internet
Comparing prices was most widely used application for the Internet
- Figure 55: Uses of Internet in Support of Luxury Goods Purchases
Role of the Internet in Influencing Last Purchase
- Figure 56: Internet Rated Very Important in Influencing Last Purchase
Luxury travelers make the absolute most of the Internet
- Figure 57: Use of the Internet by Luxury Travel Purchasers
Trends in Spending and Time on the Internet, 2005 to 2007
- Figure 58: Average Time Spent Online for Internet Shopping and Research
Purchases, 3Q2007 & 3Q2005
- Figure 59: Average Amount Spent on Internet Making Purchases, 3Q2007 & 3Q2005
Having Access to Wide Selection of Merchandise, Convenience of Shopping at Home and Ability to Compare Products and Prices Are Keys to Attracting Luxury Consumers to Internet Shopping
- Figure 60: Features Luxury Shoppers Consider Very Important for Using the
Internet for Shopping, 3Q2007 & 3Q2005
Shipping and Handling Charges Discourage Luxury Internet Shoppers
Features that Are Very Important for a Luxury Website
- Figure 62: Features Very Important for a Luxury Website
Luxury Consumers' Favorite Internet Websites
- Figure 63: Top Ten Luxury Consumers' Websites
Chapter 6 — About Luxury Travel
Nearly Four Trips Planned For April to December 2006
- Figure 64: Travel Plans April-December 2006
Luxury Resort and Foreign Travel Top List for Personal Vacation Plans
- Figure 65: Type of Personal Trips Planned
Travel Spending Trends, 2005 to 2006
- Figure 66: Trends in Luxury Travel, 2005 to 2006
Relaxation and Stress Relief Is Primary Experience Desired by Luxury Travelers
- Figure 67: Travel Experiences Rated Very Important by Luxury Travelers
Having Special Experiences that Make Memories Is Top Factor when Planning Travel
- Figure 68: Factors Rated Very Important When Planning Luxury Travel
Chapter 7 — About Happiness and Motivators for Luxury Purchases
Luxury Consumers Just Want to Have Fun
- Figure 69: Motivators Rated Very Important When Purchasing Luxury
Happiness Is the Ultimate Luxury
People have a happiness ‘set point’ that is resistant to change
Money doesn’t buy happiness, in fact the pursuit of wealth may make people less, rather than more happy
Income and Assets Measure One's Success in Business and Career --
Happiness Measures One's Success in Life
Understanding affluent consumer psychology is critical to success in luxury brand marketing
- Figure 70: Satisfaction with Life Scale by Ed Diener (4Q2007)
Money does buy happiness -- but an increase of 2.5 times more money only gets you 10 percent more happiness
The new luxury consumer is adopting a 'less is more' lifestyle
Chapter 8 — Status & the Luxury Consumers
Attitudes about Status
- Figure 71: Attitudes about Status
Personalities of Status
- Figure 72: Personalities of Status
- Figure 73: Status Personalities Attitudes
Consensus Connie Goes Along with the Status Quo
Sarah the Status Seeker Places a Priority on Prestige
Quality Magnet Martha Is Driven to Buy the Best
Anti-Status Andy Rejects the Trappings of Status
Lifecycle of Luxury Brands’ Status Tied to Consumers’ Age
- Figure 74: Status Attitudes Most Closely Associated with Younger Consumers 123
- Figure 75: Anti-Status Attitudes Most Closely Associated with Older Luxury
Consumers
Maintaining Luxury Consumers’ Desire for Status Through the Acquisition of Luxury Is Good for
Luxury Marketers
Counter Trend toward Anti-Status Is Taking Hold
Chapter 9 — Luxury Consumers and the Loyalty Factor
Luxury Consumers’ Membership in Loyalty Programs
- Figure 76: Membership in Loyalty Programs, by age and by income
Membership and It’s Impact on Brand Choices
- Figure 77: How Strongly Loyalty Programs Influence Brand Choices
Membership and Its Impact on Luxury Spending
- Figure 78: Average Amount Spent by Luxury Consumers 1Q2007 based upon Membership
Want to Target Young Affluents? Create a Loyalty Program for Them
- Figure 79: Average Amount Spent by Luxury Consumers 1Q2007 based upon age and membership
Case Studies of Effective Loyalty Programs
Characteristics of Effective Loyalty Programs
Appendix A
Research Objectives
Research Methodology
Income Demographics
- Figure 80: Income Demographics
Gender
Age Distribution
- Figure 81: Age Distribution
Other Demographic Variables
Survey Questionnaires
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