Why luxury consumers are so similar the world over
Luxury consumers in the US and much of Western Europe are very similar in many ways, especially in the emphasis they place on experiences rather than material goods, according to a report from The Conference Board.
According to Lynn Franco, director for The Conference Board's Consumer Research Center, luxury consumers in different geographies have remarkably similar perspectives on how to define luxury, with most (44%) strongly agreeing that "luxury is having enough time to do whatever you want and being able to afford it".
What defines luxury? For luxury consumers in almost every country, time is apparently the ultimate luxury, being cited as "the most highly valued luxury" by 35% of respondents, followed by "life experiences" (25%), and "having comfort, beauty and quality" (18%).
Relatively few luxury consumers strongly agreed with the following:
- Luxury is less about the material things one has or one owns and more about how one experiences life, a sense of happiness and satisfaction (only 26% strongly agreed).
- Luxury is being comfortably well off and not having to worry about tomorrow (25% strongly agreed).
- Luxury is the finer things in life that surround you with extreme comfort, beauty, and quality (25% strongly agreed).
- Luxury is the "best of the best" in all aspects of your life (18% strongly agreed).
Luxury consumers' favourite pursuits mainly included high-tech activities and travel. High-tech activities, such as using a personal computer, the internet, or a mobile phone, ranked as the most participated-in lifestyle activities by nearly three-quarters of all luxury consumers. Travel was ranked next, at 69%.
Luxury status icons The most popular "status luxuries" owned (across the countries surveyed) were:
- Collections of antiques and rare items (30%);
- Original art, paintings and sculpture (31%);
- Second homes or holiday homes (27%);
- Fine jewellery and watches (24%);
- Fine musical instruments (22%).
American luxury consumers led in the ownership of antiques or collections of rare items, while Italian luxury consumers were more likely to own original art. Italian luxury consumers also reported the highest share of holiday homes or second homes. Chinese luxury consumers led in the ownership of fine jewellery and watches, while the French had the highest incidence of fine musical instruments.
Cultural differences found Compared with luxury consumers living in other countries, Japanese consumers trail in their participation in the various lifestyle activities included in the survey, such as photography (only 30% compared to the international average of 59%), avid book reading (35% versus a 58% average for all countries), and listening to records, tapes, and DVDs (37% versus 56%).
Other key differences across cultures included:
- American consumers are noted for their interest in cable or satellite television, pets, physical fitness and health foods, electronics, and investing in stocks and bonds.
- British consumers are distinctive in their strong interest in the internet and mobile phone usage, videos and DVDs, wine, gourmet goods, health foods, avid book reading, and cable or satellite TV.
- German consumers are more involved in reading books, attending cultural events, gardening, and home furnishings.
- Italian consumers share many of the same interests as those in Germany, but they are more active in travel.
- French consumers are similar to those in Germany and Italy, but with an even greater interest in gourmet food and wine.
- China has the greatest interest in photography, electronics, and home furnishings.
Always better than the rest According to Pamela Danziger, president for Unity Marketing and author of the report, "For most, luxury is not specifically related to how much something costs or what brand it might be. Instead, luxury is highly personal and something individuals will interpret and judge for themselves. But while luxury is highly personal and separated from price and brand, it is expected to be something with a quality that sets it far above ordinary products."
Luxury is always noticeably above average, as 81% of luxury consumers agreed that "luxury is about the feelings the consumers get in enjoying their luxury lifestyle, so it is very much an experience, rather than a material item they own. Luxury is being able to pursue your own passions and interests."
Who counts as a luxury consumer? Nearly three-quarters of those surveyed agreed that "luxury is for everyone, and is different for everyone", suggesting that some consumers may use luxury products and participate in luxury activities even though other aspects of their life is not strictly luxury.
The vast majority of luxury consumers say they avoid conspicuous consumption and "buying to impress". The person who most matters when it comes to luxury is the individual and they experience, interpret, and feel about their own luxury lifestyle, and not what their neighbours, colleagues, or co-workers think.
Conclusion While brands don't necessarily define luxury, many luxury consumers look to the brand and the brand's reputation as a signal of quality. In fact, China was the only country surveyed in which a significant portion of consumers (46%) tended to agree with luxury being defined largely by the brand itself.
The report, sponsored by Conde Nast, Gucci Group, Gibson USA, The Ritz Carlton, and Tru Vue, was based on an online survey of 1,800 affluent consumers in the US, China, France, Germany, Italy, Japan, and the UK. All the respondents were aged 18+ and were in their country's top 25% income bracket.