There is good news and even better news for marketers aiming at the highest potential affluent customers in Unity Marketing’s most recent affluent attitude and purchase behavior survey. The good news is that affluents increased their average three-month spending on high-end or luxury goods and services by 3.2% overall.
The even better news is that affluents’ consumer confidence rose 17.3 points, as measured by the Luxury Consumption Index (LCI), the single biggest jump since 4Q2012. This according to a survey conducted in October 2015 tracking n=1,200 affluent consumers’ high-end and luxury purchases for a three-month study period, as compared to results from three-month study period fourth quarter 2014.
“Finally, we can bring some good news to brands that depend upon the out-sized spending potential of the affluent consumer segment, the top 20% of U.S. households based on income,” says Pam Danziger, president of Unity Marketing and lead researcher in the ACTS study. “Affluent consumer confidence in fourth quarter 2015 posted the strongest uptick we’ve seen in the past three years. Since affluent spending on luxuries are purely discretionary, their feelings of confidence in their financial status is essential to getting them to loosen their purse strings, which they did over the past three months.”
“While a 3.2% increase in luxury spending hardly reflects a booming luxury market, it is a positive turn. The key question is whether the affluent consumer segment will sustain a more positive outlook over the next six months. It hasn’t been since 2011, the period immediately after the worst of the recession, that Unity Marketing has tracked a quarter-upon-quarter gain in affluent consumer confidence. Everyone’s fingers should be crossed that we’ll see a sustained increase in 2016,” Danziger explains.
Affluents investing more in their homes
Contributing the greatest boost to affluent’s spending this quarter was a 29.6% quarter-to-quarter increase in spending for high-end home luxuries. Danziger says, “This remarkable increase in spending on home furnishings fits perfectly with affluent’s focus on gaining the greatest return on their investment in spending. For example, buying a new handbag or outfit gives a momentary thrill, but once the newness wears off, it is just another thing in the closet. But investing in home improvements, like redesigning the closet or new kitchen appliances, is something that greatly improves the quality of your everyday life. So we track affluents picking up the pace in spending on home electronics; major home appliances, building products and bath fixtures; and linens, fabrics and soft goods.”
Affluents investing in collectible personal luxuries that hold value
In the personal luxury space, affluents also picked up the pace on investments in jewelry and watches, both of which have inherent value, while spending on more disposable luxuries, like clothing, fashion accessories and beauty posted a decline. Also up in the personal luxury space were wine and spirits, another highly collectible category, and personal electronics, which deliver enhance people’s quality of life now that affluents are tethered to their internet connections 24/7.
Where affluents spend their money reveals what they really value
“With improved confidence in their financial status, affluents are choosing to spend where they get the greatest return on their investment as measured by improvements in their quality of life or that promise to hold their value. Brands need to position their product offerings around meaningful and measurable improvements they deliver to affluent’s luxury lifestyle. They have to deliver meaning to the customer, which today is measured by the enhanced lifestyle experiences they offer.”
Source: November 23, 2015 /EINPresswire.com
What else you should know about the affluent consumer
If you are targeting affluent consumers you also want to understand their needs, preferences, interest and purchase behavior:
- 59% of traffic to luxury sites is from mobile devices. [PM Digital]
- The U.S. luxury market is 3.5 times larger than the next largest market, Japan. [Bain & Company]
- Only 22% of affluents agree that if a luxury product goes on sale, it lessens the perception of luxury. [RSVP Publications]
- Mass affluents are 8% less likely to watch broadcast TV and 25% less likely to watch cable TV than the average U.S. household. [Nielsen]
- 62% of total millionaires list Amazon as their favorite place to shop. [Shullman Research Center]
- Affluents are 61% more likely than average to read a daily newspaper. [Nielsen]
- Affluents have 50% of the nation’s income and represent 40% of all consumer spending — a powerful pull for a luxury brand.
- 55% of affluent consumers used their phones as a mobile payment device. [Accenture]