Home
Global Supplier Directory
APPLIANCE Engineer
Supplier Solutions
APPLIANCE Line
Whitepaper Library
Calendar of Events
Association Locator
Contents Pages
Market Research
Subscription Center


 
Daily News

Affluent Consumers Feel Confident, But Not As Inclined To Buy Luxury Products in 2014
Feb 14, 2014
 Printable format
 Email this Article
 Search

Affluent consumer confidence, as measured by Unity Marketing's exclusive Consumption Index (LCI), was up slightly in early January 2014—but affluent consumers show more inclination to save and invest in the next 12 months than they do to spend more on luxury/high-end products.

"In early January the affluents see their personal financial situation improved over the past three months and they foresee continued improvement for the rest of the year," said Unity Marketing President Pam Danziger. "However, only 22% of the over 1,300 luxury consumers surveyed expect to spend more on luxury or high-end goods and services in 2014."

She said that, in this regard, the previous two years started out stronger:
• at the start of 2011 28% expected to spend more on luxury products in the coming year
• at the start of 2012 26% expected to spend more

"That means 2014 is shaping up to be challenging for companies and brands that target the affluent heavy-lifting shoppers, who make up only 20% of U.S. households, but account for more than 40% of total consumer spending," Danziger said. "Marketers need to understand the consumers' cautions and position their brands as a value proposition that is an investment in their lifestyle that will deliver greater comfort, beauty and quality."

The survey went to affluent consumers, with average income of $260,000 and average age of 47.5 years, who bought one or more luxury or high-end goods and services in the fourth quarter 2013.

Unity Marketing's quarterly ACTS survey measures two tiers of affluents:
• the ultra-affluents (HHI $250,000 and above)
• HENRYs (High Earners Not Rich Yet), which Unity Market considers to be the "mass affluent"

"One big takeaway - the market for luxury goods and services consists much more of the upper-middle class (i.e. the HENRYs) rather than the true upper class (the ultras and top 1%)," said Tom Bodenberg, Unity Marketing chief consumer economist. "While the purchases of the upper class (mansions, yachts, jets, etc.) may garner far more media attention, their small population translates into a smaller market for luxury. However, there is a much larger market merely one notch down - who have deep aspirations toward emulating a wealthy lifestyle, even if it means some sacrifices will be required in household consumption. But, this market appears to be the one most troubled by current events."

While HENRYs spent less than half as much as did ultra-affluents on luxury and high end purchases during the fourth quarter ($6,547 as compared with $14,994), their much greater numbers (approximately 22 million households) mean that the total value of the HENRY market is about four times that of the ultra-affluent market (approximately 2.5 million households at the top 2%).

"Marketers have historically felt that ultra-affluents were their ideal consumer, but there simply aren't enough ultra-affluents to keep high-end luxury brands afloat," says Danziger. "Instead, luxury brands need to broaden their reach to include the HENRYs. This creates a unique challenge, as they are now competing with mass market brands that would also like to reach up tap into HENRY spending."

In many key categories of the luxury and high-end market, HENRYs are statistically on an even keel with ultra-affluents when it comes to making purchases (i.e. the percentage share of affluent households that made a high-end purchase). Last quarter HENRY demand for high-end home and personal electronics, major home appliances, and other luxury items matched that of ultra-affluents, even while their spending in these categories was somewhat lower than that of ultras.

Unity Marketing results show that, in the coming three months, HENRYs are on par with ultra-affluents for planned purchases in several categories.

Back to Daily News

 

Daily News

...........................................................

Sep 5, 2014: Foodservice Equipment and Other Restaurant Capital Spending Solid in July

Sep 4, 2014: IFA Show: Miele Unveils Washing Machine That Beats A+++ Energy Efficiency by 40%

Sep 4, 2014: IFA Show: Panasonic Washer Uses Sensor System to automatically Adjust Washing Cycle

Sep 3, 2014: h.h. gregg Ranked Highest In Appliance Customer Satisfaction

Sep 3, 2014: Helen of Troy Updates Fiscal Year Outlook

More Daily News>>

RSS Feeds
.........................................................
Appliance Industry
Market Research

...........................................................

October 2014: Portrait of the European Appliance Industry
September 2014: Appliance Industry Focus: HVAC
June 2014: Appliance Magazine Market Insight: April 2014
May 2014: Appliance Magazine Market Insight: March 2014




 
Contact Us | About Us | Subscriptions | Advertising | Home
UBM Canon © 2014  

Please visit these other UBM Canon sites

UBM Canon Corporate | Design News | Test & Measurement World | Packaging Digest | EDN | Qmed | Plastics Today | Powder Bulk Solids | Canon Trade Shows