Marketing in New Luxury Style in 2015: What Affluents Buy, How They Spend, Where They Shop & How They Feel about their Wealth & Finances
What do Shinola, Alex & Ani, Vera Bradley and Canada Goose Know about the New Style of Luxury that Tiffany, Ralph Lauren, Coach and Michael Kors Missed?
Where Will America's Affluents Spend their Money in 2Q2015?
Get an exclusive peak into the Affluent Consumer Tracking Study (ACTS) & the Luxury Consumption Index (LCI)
What's hot with America's luxury consumer? Find out in the trend report by Pam Danziger - the premier consumer insights authority for the affluent consumer segment - which reveals the result of this winter's Affluent Consumer Tracking Study, a detailed look into the mind of the affluent consumer: Marketing in New Luxury Style in 2015: What Affluents Buy, How They Spend, Where They Shop and How they Feel about their Wealth & Finances.
"As Bob Dylan sang, 'The times they are a changin'," says Danziger, who has been studying the spending habits and preferences of high-end consumers for over 12 years and written two books on the subject. "Today, conspicuous consumption is not part of the game plan. Our research clearly indicates that bragging rights no longer come with buying designer brands but from shopping smart."
While it is true that affluents and high-net-worth individuals are feeling wealthier these days, in this post-recession era that does not necessarily translate into higher earning for luxury brands. "The 'wealth effect' is going in reverse," says Danziger. "Positive changes in affluents' perceived wealth is only making them hold tighter to their gains rather than spend freely on goods and services."
Austerity is the order of the day and luxury marketers are going to have to get use to the resulting drought in the U.S. luxury market.
Rainmaking in the Luxury Drought
In this detailed market research study Pam and her team at Unity Marketing surveyed 1,200 affluent consumers in January 2015 (with an average annual income of $266.9k) to learn What They Buy, How They Spend, Where They Shop and How they Feel about their Wealth & Finances.
This is a can't miss trend report for anyone looking to market to affluent consumers in 2015. You'll learn:
Affluent Austerity in the Post-Recession era
- What luxuries affluents consumers spend their money on today and what they will buy in the future?
- What trends are there in affluent consumption? What they are buying now and where are they buying from?
- What luxury brands affluent consumers are purchasing today and which brands are falling out of favor (and why)?
- How can you communicate effectively with today's value-driven affluent customer?
In her 2011 book Putting the Luxe Back in Luxury, Pam Danziger wrote "This is the 'luxury drought,' a dry period following the boom of the last decade. The luxury drought is characterized by affluents sharply reducing their spending on luxury, as they reevaluate, reprioritize and reassess their lifestyles."
Today, affluents are seven years older than when the recession first hit, and an aging population of affluents is not favorable for luxury goods purchases. Young affluents (24-44 years) are far more inclined to indulge in the material expression of wealth, but there simply aren't enough young people with affluent levels of income ($100k+) to make up for the aging out of Baby Boomers and the leading edge of GenXers (who reach 50 this year) from the prime target market for luxury goods.
'Luxury' as a dirty word
- Tiffany knows it: sales in the two-month holiday period were 1% below the previous year.
- Ralph Lauren understands it: net income was down 9% in its most recent quarter ending December 27, 2014 and the company is revising its 2015 revenue growth outlook downward by 40% from previous estimates.
- Coach feels the pain: sales in the last quarter of 2014 were off by 20% in North America, and 14% off overall.
- And Michael Kors is starting to worry: the company ended 2014 with four quarters in a row of decelerating comparable store sales:.
For many affluents in today's market, 'luxury' stands for overrated: a word marketers use to sell you something overpriced. The research shows that although affluents define luxury in many different ways, in the current environment the word luxury has become tarnished. It's a one-size-fits-all description that doesn't convey the right meaning any longer.
So how do marketers reach today's affluent consumer and get them to open their sizable wallets?
"Success in the luxury market begins with understanding the needs and desires of customers who can afford the luxuries you sell," says Pam. "Stop focusing on the aspirational customers and pay strict attention to those affluents with money to spend and a willingness to indulge."
High-end brands like Shinola, Canada Goose, Ghurka, and The Row know something about marketing to the high end customer that you don't. If you want to join the ranks of those who are prospering in the new style of luxury, subscribe now to Marketing in New Luxury Style: Executive Summary of the Latest Study of Affluents, What They Buy, How They Spend, Where They Shop and How they Feel about their Wealth & Finances.
With your subscription you will also receive a pdf executive summary report, as well as the detailed report covering affluent luxury purchases in 4Q2014.