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Today’s luxury market represents every marketer’s and retailer’s “sweet spot.” The top 25% of U.S. households (incomes of $75,000 and higher) have incomes 2.5 times larger than the nation’s average and they spend about two times more than the average on most categories of consumer goods. In effect, the luxury consumer buys more of everything and spends more every time they shop.
But today the luxury market is undergoing dramatic changes as a new generation of luxury consumers, the baby boom generation, becomes the “new luxury” generation. Because consumer insight is the ultimate competitive weapon, here are eight essential things that every luxury marketer needs to know about today’s luxury consumer.
Luxury Lesson #1—“Old luxury” is at an end … “New luxury” is here!
Back in the “go-go” 90s, luxury was defined by the attributes, qualities and features of the product itself—like price, materials and brand—and much of its appeal was derived from status and prestige. Shopping was a competitive sport and the one who acquired the most luxury “toys” was declared the winner. This “old luxury” ideal is best embodied by the television show, “Lifestyles of the Rich and Famous with Robin Leach,” and such “old luxury” icons as Donald Trump and Martha Stewart. But “old luxury” is dying out. “Old luxury” doesn’t resonate with the new luxury generation, the baby boomers, who have always been a generation that challenged authority, rejected the status quo and went their own way.