Luxury Consumers Start 2007 in a Consumer Confidence Slump, Reports Unity Marketing
Friday, 26 January 2007
Luxury consumers’ confidence declined to its lowest level in 2006 at the close of the fourth quarter. This sets the stage for more reserved spending by the nation’s affluent consumers on luxury goods and services in the first quarter of 2007.
Unity Marketing’s Luxury Consumption Index declined 5.1 points to reach 98.2 points in the fourth quarter 2006, down from 103.3 in the third quarter, according to the latest survey of 1,036 luxury consumers (average income $156.5k and average age 42.8 years).
In keeping with a decline in consumer confidence, the typical luxury consumer spent less on luxury purchases in the period, dropping 3.4 percent from $13,432 during the third quarter to $12,982 in the fourth quarter.
“But it’s not all doom and gloom for luxury marketers and retailers,” says Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Shopping Experience. “Spending on experiences rose modestly in the fourth quarter and spending on personal luxuries were up dramatically. However, a drop in spending on home luxuries pulled the overall spending levels down in the fourth quarter.”
Commenting on the Luxury Consumption Index, Thomas Bodenberg, Unity Marketing’s economic forecaster, said, “Luxury consumers signaled caution with the drop in the index as they enter 2007. While the majority of luxury consumers expect their personal financial status to improve in 2007, they remain concerned about the state of the economy overall. The dollar’s continued decline against the Euro and pound sterling and continued political instability in the Persian Gulf region accounts for the softness in luxury demand.”
About Unity Marketing’s Luxury Tracking Study
These findings are based upon Unity Marketing’s quarterly luxury tracking study which surveyed 1,036 luxury consumers about their purchases, spending, store and brand preferences in four major categories of luxury goods and services, including home luxuries (art and antiques, electronics, furniture, lamps and floor coverings, garden/outdoor, home decor fabrics, wall and window coverings, kitchen appliance, bath and building products, kitchenware and cooks’ tools, linens and bedding, tabletop); personal luxuries (clothing, fashion accessories, jewelry, watches, cosmetics, wine and spirits, pet luxuries, and pens); automobiles; and experiences (dining, travel, home services, spas/beauty services, and entertainment).
Unity Marketing publishes its Luxury Tracking Study quarterly with the next due in March/April 2007. For more information visit http://www.unitymarketingonline.com/cms_luxury/
For media: Charts, tables and graphs are available on request.