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Discount Department Stores like Target and Kohls Appeal to the Nation's Wealthiest Shoppers

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Think that the nation's wealthiest shoppers, those ultra-affluents at the top 2 percent of U.S. households with incomes of $250,000 and above, shop only at the toniest places?  Think again.  They are just as eager as shoppers with less disposable income to find good quality at reasonable prices.  That's why they shop at discounters like number one ranked Target, as well as at Kohls, Costco and Walmart just like everybody else, according to the latest survey of luxury consumers conducted by Unity Marketing.

"Trends in where luxury consumers shop reveals how a new values orientation has taken hold of the affluent shopper," explains Pam Danziger, president of Unity Marketing and author of Putting the Luxe Back in Luxury:  How new consumer values are redefining the way we market luxury (Paramount Market Publishing, 2011). "The wealthiest shoppers look at their luxury spending as an investment, but not like an investment where they buy it today and put it up on eBay tomorrow and make a profit.  Rather they see their purchases as an investment in their lifestyle that must deliver a meaningful return as measured in greater pleasure, comfort, superior performance and longevity of wear and use."

Danziger continues, "When they look at a luxury brand and its high price tag, wealthy shoppers make a shrewd investment calculation, evaluating the money spent with the expected return to their lifestyle.  If the product doesn't measure up, they won't spend the money; rather they will trade down to a cheaper, yet acceptable alternative.  In today's retail landscape people can find good substitutes for almost any product out there at all different price points.  The shopper can be choosy and the wealthiest shoppers can afford to be the choosiest."

That is why it should come as no surprise that more ultra-affluents shopped at Target (39.5 percent) in the first three months of 2011 than shopped at Neiman Marcus (20.1 percent) or at Macy's (34 percent) than at Bloomingdales (19.4 percent). 

"Looking to the future, retailers at the top end, like Neiman Marcus and Bloomingdales, have to recognize that their competitive set extends beyond those in their 'class,' but also to mass. With Apple's retail innovator Ron Johnson joining J.C. Penney as CEO later this year, I expect to see exciting changes emerging from Penney's particularly in the area of the customer's shopping experience.  Johnson already has a solid base of affluent Penney shoppers.  The fact is a larger share of ultra-affluent consumers (22.4 percent) shopped at J.C. Penney's in the first three months of 2011 than shopped at any one of the seven luxury department stores included in Unity Marketing's survey."

[Note:  The full list of discount and mass department stores and ultra-affluent shopping behavior is available on request by calling 717.336.1600.]

Click this link to learn more about The Luxury Report 2011 and to order your copy http://bit.ly/c2BFMJ  or call Pam Danziger at 717.336.1600 for more information.

About Pam Danziger and Unity Marketing: Pamela N. Danziger is an internationally recognized expert specializing in consumer insights for marketers targeting the affluent consumer.  She is president of Unity Marketing, a marketing consulting firm she founded in 1992. Pam received the Global Luxury Award for top luxury industry achievers presented at the Global Luxury Forum in 2007 by Harper's Bazaar.
 
Pam gives luxury marketers "All Access" to the mind of the luxury consumer.  She uses qualitative and quantitative market research to learn about their brand preferences, shopping habits, and attitudes about their luxury lifestyles, then turns these insights into actionable strategies for marketers to use to reach these high spending consumers.  Unity Marketing is the voice of the luxury consumer for such clients as PPR, Diageo, Tempur-Pedic, Google, Swarovski, Constellation Wines, Luxottica, Ford Motor Company, Orient-Express Hotels, Italian Trade Commission, Marie Claire magazine, The World Gold Council, and The Conference Board.
 
Follow Pam on Twitter @
www.twitter.com/PamDanziger
 
Hew new book, Putting the Luxe Back in Luxury:  How new consumer values are redefining the way we market luxury, is available from Paramount Market Publishing.  Her other books include Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience, published by Kaplan Publishing in October 2006;  Let Them Eat Cake: Marketing Luxury to the Masses—as well as the Classes, (Dearborn Trade Publishing, $27, hardcover) and Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior (Chicago: Dearborn Trade Publishing, 2004). 

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