Luxury Market Faces a Drought in the USA as Affluents Choose Conscious Consumption, rather than Conspicuous Brands, according to Marketing in New Luxury Style in 2015: What Affluents Buy, How They Spend, Where They Shop & How They Feel about their Wealth & Finances.
In plain English — there’s a whole new trend in how people buy what might be perceived as luxury items. Today, people still want high-quality brands, but they aren’t willing to pay a premium any more.
The recession has passed but for people with affluence, the values/behaviors that were triggered during the recession seem to have taken hold. Which is spelling trouble for luxury brands that have been hoping the market would rebound. That's not likely.
In Unity Marketing’s latest survey among high-income consumers (who had an average income of more than $250K), affluent consumers demonstrated a definite increase in their consumer confidence but that was paired with a spending decline of 26.5 percent from the previous quarter.
In the good old days as people felt wealthier, they tended to spend more money on consumer goods and services. But today a very different trend is taking hold. With people still stinging from the effects of the recession and the damage it did to their investments and home values, the affluent are sticking with their recession spending hold even though their wealth is holding steady or back on the increase.
So what is a marketer to do?
You have to find the balance between demonstrating your product/service’s high quality but without giving it “the luxury stink.” Talk about the value of what you offer, how long it will last, the importance of buying smart, etc. But do not use the “L” word.
Here’s another aspect of this new trend. The affluent are a little embarrassed that they’re affluent. They don’t want to flaunt it the way they might have enjoyed in the past. Suddenly, it’s embarrassing if you’re well off.
So again, in your marketing — you have to emphasize the intelligence and practicality of the buy rather than spotlighting the exclusivity of the purchase.
As the report states: “conspicuous consumption has turned to conscientious consumption in a new style of luxury.”