Luxury Consumer Confidence Recovers at End of Third Quarter

Furniture World News

Luxury consumers’ confidence rose at the close of the third quarter, as measured by Unity Marketing’s Luxury Consumption Index which reached 103.3 points, up from 99.2 at the end of second quarter. But luxury consumers’ spending on luxury didn’t match their rise in confidence. This according to the latest result of Unity Marketing’s Luxury Tracking survey of over 1,000 luxury consumers (average income $149.1k) conducted in October 2006. “The rebound of the luxury index to 103.3 points means that luxury consumers have more confidence about the economy and their financial status. In particular, there is a notable rise in luxury consumers’ perception of the financial health of the country. If the coming elections turn on the economy, this is good news for incumbents,” says Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Shopping Experience. “However, luxury consumers didn’t translate their growing consumer confidence into increased spending on luxury during the last quarter.” Luxury consumers spent on average $13,432 buying luxuries in the third quarter, which was 9.6 percent less than they spent in the second quarter. With a few exceptions — notably luxury electronics, furniture, clothing, fashion accessories, wine and spirits — the amount luxury consumers spent in most categories declined, with the spending levels of the super-affluent consumers (those with incomes of $150,000 and above) dropping the most. “The index shows some recovery in the third quarter, but not back up to previous high levels seen in the Spring ’06,” says Thomas Bodenberg, Unity Marketing’s economic forecaster. “While the lower and middle-class consumers have benefited from the drop in gas prices, this doesn’t have a significant effect in the luxury market. On the other hand, luxury consumers are much more impacted by the decline in the housing market. Super-affluents, in particular, who tend to live in the most expensive houses are likely to have experienced the steepest drop in their home’s value. This translated into more moderate levels of spending on luxury in the third quarter.” Danziger concludes, “Given the greater levels of confidence, we feel luxury consumers’ spending levels will rise in the fourth quarter. In particular, Christmas 2006 gifting will be strong among luxury consumers.” About Unity Marketing’s Luxury Consumer Tracking Study These findings are based upon Unity Marketing’s quarterly luxury tracking study which surveyed 1,048 luxury consumers (average income $149.1k and age 43.4 years). Every quarter Unity Marketing conducts a Luxury Consumer Tracking Study among 1,000+ luxury consumers. Year-end 2006 statistics compiled from the four 2006 tracking studies will be published in Unity Marketing's Luxury Report 2007 - Who Buys Luxury, What They Buy, Why They Buy. In the tracking study detail purchase information is collected on these categories of luxury: Home Luxuries: -Art, Wall Décor & Antiques -Electronics and Photography, such as computers, televisions, home entertainment centers, cameras, PDAs, etc. -Home Decorating Fabrics, Window & Wall Coverings -Furniture, Lighting and Lamps, and/or Floor Coverings, including rugs -Outdoor, Lawn, Patio & Garden Products, such as lawn furniture, patio accessories, plants, grills, etc. -Kitchenware, Cookware & Housewares -Kitchen Appliances and Bath & Building Products, such as cabinets, bathtubs, etc. for home remodeling -Linens & Bedding -Tabletop, Dinnerware, Flatware, Servingware, Decorative Accents Personal Luxuries: -Automobiles and/or recreational vehicles, such as boats, RVs, etc. Clothes & Fashion Apparel -Fashion Accessories, such as handbags, wallets, suitcases, shoes, etc. -Fragrance, Cosmetics and/or Beauty Products and Skin Care regimes -Jewelry -Watches -Pet Products -Wine & Spirits -Pens & Writing Instruments Experiential and Luxury Services: -Travel and vacations -Dining and restaurants -Entertainment -Personal and health services, such as beauty treatments, spa, massage and cosmetic procedures, health club, country club, etc. -Home services, such as landscape, housecleaning, home remodeling, home decorating, party planning and catering, etc. Luxury brands & magazines -Also included in the tracking study are measures of luxury brand awareness and usage as well as magazines luxury consumers purchase. http://www.unitymarketingonline.com/reports2/luxury/brands.html provides a listing of brands. How to Subscribe This is a semi-custom research service with subscribers adding specific product categories and their brands and the brands of five key competitors to the survey. In addition, subscribers can add up to six personal questions to the survey through the year. Use this link for more information about subscribing to luxury tracking http://www.unitymarketingonline.com/reports2/luxury/luxurytracker_reg.html or call Pam Danziger at 717-336-1600.