Stevens, Pa. -- Mixed signals; that is what the latest Unity Marketing quarterly survey of affluent consumer confidence delivered for the first six months of 2011.
On a positive note, the Luxury Consumption Index rose 6.7 points, the highest rate of growth since first quarter 2010, to reach 82.8 points. However, today the LCI still stands below its post-recession high of 86.9 points reached in January 2010.
Tempering luxury marketer's enthusiasm for the return of the luxury consumer market is the fact that spending on luxury by the affluent consumers surveyed was basically flat from previous quarter and 4.1 percent less than reported in the first quarter 2010.
Commenting on the conflicting results of Unity Marketing's latest Luxury Tracking Survey conducted April 6-13, 2011 among 1,321 luxury consumers (avg. income $287.2k; median net wealth $897k; age 45 years; men 45 percent & women 55 percent), Unity Marketing's president, Pam Danziger, and author of Putting the Luxe Back in Luxury, says, "There is a lot of 'noise' out there about the return of the luxury market. I am advising my clients not to believe everything they see or hear."
"While the worst may be behind us, there are still worrisome trends brewing in the market for luxury. For example, the rate of change in luxury consumers' spending peaked between the second and third quarter 2009. Since then the rate of change has steadily slowed, which indicates that much of the pent up demand for luxury goods that built during the worst of the recession has already been released. Spending on luxury is likely to flatten out over the coming quarters unless there is dramatic improvement in the economy overall, which seems doubtful."
Commenting on the latest luxury consumer survey results, Tom Bodenberg, Unity Marketing's chief consumer economist, said, "This quarter's rise in the LCI, but with luxury consumer spending flatlining at the same time, signifies a great deal of uncertainty and market demand volatility. The rise in the LCI (highest in the past 12 months) reflects a noted reduction in market pessimism. However, this has yet to FULLY translate into increased demand. While there is a slight yet continuous increase in the index over the past 12 months, increase in the rate of growth of the index will not pick up unless there is a sustained economic recovery."