STEVENS, Pa. July 24, 2009 -- Unity Marketing's latest Luxury Tracking survey among affluent luxury consumers suggests that the worst of the recession is over for a near majority of those surveyed. Some 48 percent believe that their personal financial situation will improve over the next twelve months, the highest level reached since 3Q2007.
But while there are definite signs of improvement seen in the latest survey, Pam Danziger, president of Unity Marketing, warns that luxury marketers can't expect their affluent shoppers to come back with the same exuberance – and free-wheeling spending -- they exhibited before the recession.
Luxury consumer confidence as measured by LCI jumps highest rate ever
Luxury consumer confidence as measured in Unity Marketing's exclusive Luxury Consumption Index (LCI) gained 18.6 points in the second quarter 2009 – the largest quarterly increase measured since luxury tracking began in December 2003. Further the average amount affluents spent on luxury was up nearly 11 percent over the same period last year. These findings are based upon a survey of 1,017 affluent consumers of luxury (average income $207.8k; age 44.3 years) fielded July 7-12, 2009.
Moderating these positive trends is the fact that the average amount spent by affluents on luxury declined from first quarter to second quarter 2009. Details about which categories of luxury products and services are on the rise and those that continue to struggle because of lower consumer spending are contained in the 2Q2009 Luxury Tracking Report: Consumer Spending Trends. Click here to order a copy.
Rising confidence will not translate into over-exuberant luxury spending
Danziger says, "Marketers can't afford to be over confident right now. The latest survey data, while it shows signs of improvement, also shows continued weakness in specific categories and sectors in the luxury market. Affluent consumers' expectations of future luxury spending continue to lag behind other indicators that make up the LCI index. Further Unity's research shows that affluent consumers' basic attitudes and motivations that underlie their patterns of consumption are changing, and these changes are likely to outlast the economic downturn. The new survey points to opportunities for luxury marketers that align themselves with the new values-based mindset of luxury consumers."
Commenting on the results of the latest survey Tom Bodenberg, Unity Marketing's chief economist says, "As more and more American families feel the negative effects of recession, the idea of 'luxury' and the 'luxury lifestyle' is assuming a negative connotation. So while some affluents will relieve pent-up demand for luxury goods as a vehicle of lifestyle aspiration and expression as the recession ends, the media's focus on 'recession chic' -- personal expression that deliberately excludes luxury goods -- may leave a lingering distaste for conspicuous consumption and parading luxury labels."
Danziger concludes that luxury marketers need to align their marketing and branding messages with the new luxury consumer mindset. "Now is the time for luxury marketers to do their homework, dig into the data and devise realistic and achievable marketing strategies for their businesses after the recession. Unity Marketing has an in-depth library of research-based tools and research services to help luxury marketers plan for success in the future as the mindset and attitudes of affluent consumers transition from conspicuous consumption to a new values-based perspective."
Learn more about Unity Marketing's >2Q2009 Luxury Tracking survey