Pam Danziger says luxury consumer spend up in 2005
16 Jan '06
6 min read
For luxury goods marketers and retailers the challenges for the future are daunting in the face of this trend toward experiences — Luxury consumers are spending more, in many cases lots more, on life-changing experiences, while their need for luxury goods is waning.
Now that the baby boom generation (which makes up 57 percent of all households with incomes of $100,000 or more) is turning 60, they have already acquired the material trappings of luxury.
Buying another mink coat, diamond necklace or designer handbag just doesn't have the same appeal.
The trend for the future for the baby boomer luxury consumers is toward experiences and this will tip the entire luxury business experiential simply because of the generation's size.
Americans are growing wealthier and feel entitled to spend on luxury Americans continue to grow wealthier with the average income of all households rising to $60,500 in 2004.
There are 30.2 million households with incomes of $75,000 (which Unity defines as near-affluent and affluent) and the average income of that segment is $137,500.
At the upper end, there are 1.7 million households with incomes of $250,000 and that segments' average income is $438,338 per year.
As luxury consumers' incomes rise, so too does their spending. Households with incomes over $150,000 tend to spend two-to-three times more in most categories of luxury than those with near-affluent incomes of $75,000-$99,999.
marketing@alchempro.com
