Study Finds That Marketing Efforts For Luxury Goods Needs To Be Age Appropriate

Furniture World News

With affluent consumer confidence about the U.S. economy and personal fortunes rocky during the early months of 2008, luxury marketers increasingly must target their message to the segment of affluent consumers most likely to make a purchase of their goods and services. Marketers can't afford to take a 'one-size-fits-all' approach to marketing to an increasingly diverse luxury consumer market. In the past the young affluents (those high-income individuals aged 40 years and younger) have been the most exuberant purchasers of all things luxury, spending nearly one-third more on luxuries than those over 40 years old in 2007. However, the two age groups are showing distinct differences in how they spend their luxury budgets now that they are making more careful decisions and being more cautious about their spending. “The weak economy is hitting the different age segments in the affluent market in surprising ways,” says Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience. “Most notably, older affluent consumers are spending more on luxury goods that will last, while young affluents are more likely to splurge on luxuries that give a more immediate gratification.” Young Affluents Choose 'One-Time' Luxuries, While Older Consumers Choose Those That Will Last According to Unity Marketing most recent survey of the affluent consumers, young affluents spent significantly more than older consumers on purchases of garden/outdoor luxuries, fashion accessories, wine and spirits and travel. By contrast the older affluents spent significantly more than young affluents on investment-type purchases, specifically luxury goods that are likely to hold their value and even increase in value. So they spent more on art and antiques; home decorating fabrics, wall and window decor; jewelry; and watches. This is based upon the findings of a survey among 1,258 luxury consumers conducted early April, 2008 (average income of all those surveyed was $173,400 and average age 45.9 years). "Young affluents are still building their luxury lifestyle as they enter their prime-earning years, so they are more likely to purchase luxuries they can enjoy immediately, such as a wonderful piece of outdoor furniture, a high-end handbag, a vintage bottle of wine, or the trip they have been longing to take," says Danziger. “Consumers over 40, on the other hand, are more likely to have already invested to build their luxury lifestyle. When economic pressures come to bear, they are most likely to restrict their luxury purchases to goods and services that will help them protect their investment in their luxury lifestyle. A new piece of art, a home remodeling project, or a luxury watch or piece of jewelry are all things that will bring pleasure now and hold or even increase in value over time." Luxury marketers' new challenge: Overcome resistence of cautious consumers by creating urgency to buy now Danziger advises, "The future for luxury marketers and luxury brands ultimately rests on how well they anticipate the passions and appetites of the newly emerging young affluent consumers. They need to 'think young' in order to understand the young affluents and to position their brands for the future, both for the short and the long term. "Today in a tight economy where affluent consumers are feeling the pinch, younger affluents are opting to spend more on luxuries that give an immediate lift, while the more mature are making longer-term investment purchases. That finding suggests that luxury brands that want to capture the young affluent segment need to increase the urgency associated with a particular purchase, such as offering products in limited editions, limited-time introductory prices and special sale events all focused on getting young affluents to act now and not to wait and contemplate," Danziger concludes. Pamela N. Danziger is a nationally recognized expert specializing in consumer insights, especially for marketers and retailers that sell luxury goods and experiences to the masses as well as the 'classes.' She is president of Unity Marketing, a marketing consulting firm she founded in 1992. Advising such clients as PPR, Diageo, Waterford-Wedgwood, Lenox, Swarovski, GM, Orient-Express Hotels, Italian Trade Commission, Marie Claire magazine, The World Gold Council, and The Conference Board, Pam taps consumer psychology to help clients navigate the changing consumer marketplace. Her latest book is Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience (Kaplan, $27) is in the bookstores now. Her other books include 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). She has appeared on CNN's In the Money, NBC's Today Show, CNBC, CNN International, CNNfn, CBS News Sunday Morning, Fox News' Your World with Neil Cavuto, ABC News Now, NPR's Marketplace and is frequently called upon by the Wall Street Journal, New York Times, American Demographics, Women's Wear Daily, Forbes, USA Today, Associated Press, Los Angeles Times, Chicago Tribune for commentary and insight.