Luxury consumers spending less, says study
After closing 2003 on a high note, 'luxury consumers' in the USA have demonstrated an overall decline in confidence, with the March 2004 'Luxury Goods Consumption Index' falling to 97.8 compared to January's baseline score of 100, according to Unity Marketing.
The luxury goods consumption index is a tool prepared by Unity Marketing to help marketers assess the vitality of the affluent market.
While luxury consumers started 2004 feeling positive about their financial well-being, that feeling was undermined slightly during the first three months of the year, according to Pam Danziger, president for Unity Marketing: "Their expectations about future spending on luxuries dipped in relation to their ability to spend."
Who counts as 'luxury'? A key psychographic characteristic of the luxury consumer is a cautious outlook about their personal finances. Such consumers pay close attention to maintaining their luxury standard of living, and do not spend at anywhere near their financial capacity. According to Danziger, instead of viewing luxury consumer as spend-thrifts, marketers must understand that such 'rich folk' are always on the hunt for a bargain.
Commenting on the luxury market's prospects for 2004, Thomas Bodenberg, statistician for Unity Marketing and former Conference Board executive, explained: "Despite conflicting economic news, and uncertainty in the marketplace caused by the Iraqi conflict, the 97.8 index shows merely a minor deterioration in confidence and purchase intentions toward luxury goods and services. As we enter the election cycle in full force, we can better examine the impact of the economic and political environment on present and future expenditures for luxury goods and services."
About the Index Unity's benchmark index of luxury goods buyers is calculated from a sample of 650 upper-income households across the USA. Each household has a total income of more than US$75,000 per year (and one-third earns more than US$150,000). Panellists report their purchasing behaviour concerning luxury goods and services over the most recent two months, along with attitudinal and expectation data concerning their households and the health of the economy in general.