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The Luxury Market's New Normal
Posted: June 30, 2009
According to the findings of a new research study conducted by Unity Marketing and presented by Pam Danziger, the company's founder, at the recent Luxury Interactive conference held in New York City, the paradigm has shifted for the luxury market.
"Thanks to the recession, affluent consumers are taking time out from their profligate, overspending ways to reassess, reevaluate and reprioritize their lives," says Danziger. "This will be bad news for luxury marketers, some of whom maintain the illusion that the current recession is only a temporary downturn in an otherwise rising luxury market. Unity Marketing's research shows that affluent shoppers are starting to ask questions about the luxury brands they once patronized, and those brands often come up short with compelling and meaningful answers as to why they should buy. The new normal in the luxury market is going to be all about delivering new values to the luxury shoppers who control the purse strings, and the fortunes, of every luxury brand today."
Results of Research
Unity Marketing recently conducted a series of focus groups among highly affluent and highly engaged luxury shoppers in Beverly Hills. This location was chosen because it is ground zero for the conspicuous consumption lifestyle, according to the company. The qualitative research was followed by a quantitative survey in April 2009 among 1,041 affluent consumers (average income $204,900).
"Unfortunately, the future will be very ugly indeed for luxury brands that fail to listen closely to the opinions of what once were their best customers, but many of whom today are disenfranchised and looking for new alternatives to their conspicuous consumption lifestyle," Danziger warns.
Among the key findings from the research:
- The current recession has dramatically and sharply curtailed affluent consumers' willingness to spend. This recession is unprecedented in its negative impact on luxury marketers and retailers who have catered primarily to the wealthier segment of the population. This research shows that a majority of affluent shoppers are changing their purchasing patterns in light of the current economy.