Luxury Marketers Must Adapt to Changing Consumer Appetites

by lisa ~ May 4, 2009

Unity Marketing’s most recent Luxury Consumption Index shows that affluent consumers are changing their patterns of consumption - patterns that may persist even after the recession abates. The quarterly survey of 1,034 adults with average incomes of $207,000 is considered an accurate leading indicator of consumer spending by luxury goods marketers such as jewelers.

The index reported that affluent consumers plan to cut spending on luxuries over the next 12 months. That’s probably because one-quarter of respondents said their personal financial situations had declined significantly, and 39% said they had declined somewhat.

Tom Bodenberg, Unity Marketing’s chief economist, commented that “recession chic” may persist even after the economy recovers; in fact, there may be a “lingering distaste for conspicuous consumption and parading luxury label,” he said.

It seems to me that marketers, who are trying to hard to lure customers with deals, will have to find new ways to convince the affluent to spend money. On Saturday, I visited one of Westchester’s most respected jewelry stores simply to have my watch battery replaced. While waiting, I began chatting with an employee who is also an acquaintance and asked her to show me a beautiful David Yurman bracelet. With no hint on my part and with no hesitation on hers, she offered me a substantial discount.

I go to this locally-owned store because of the friendly, personalized service. It took about 15 minutes to replace my battery, during which time I could have lounged on the leather sofas or walked to a non-chain coffee shop down the street. At a well-known jewelry chain at The Westchester, a high-end mall in White Plains, N.Y., having the battery replaced takes approximately two weeks. The employees don’t know my name - and don’t care to learn it. And I have to pay a $3 per visit parking fee…although it does offer valet service in the gigantic garage.

My bet is that these kinds of locally-owned businesses that can operate on a more personal level will be better placed to draw out high-net-worth folks. Personally, I’m increasingly likely to seek out one-of-a-kind businesses rather than impersonal chains because the experience is so much more pleasant, as Saturday’s shopping experience demonstrates.

To read a summary of the results of the newest Luxury Consumption Index, click here.

Lisa Tibbitts is a New York-based corporate communications professional with an MBA in marketing. Follow her on Twitter: http://twitter.com/FinancialPR.