Luxury Is Back

The outlook for the luxury industry is improving, as Unity Marketing’s measure of affluent consumer confidence, the Luxury Consumption Index (LCI), improved by 4 points to reach 76.1 for the first quarter 2011.


“The uptick in this quarter’s LCI reveals a more positive outlook among affluent consumers about the economy at large, as well as increased optimism about their personal economic situation,” says Pam Danziger, president of Unity Marketing and author of the upcoming book, Putting the Luxe Back in Luxury. “Affluents backed up their growing confidence by spending 4.1 percent more on luxury goods and services in the fourth quarter as compared with the same period last year.”


Luxury categories that posted strongest growth year-over-year as measured by the average amount spent by affluents, included:


Luxury cook’s tools, kitchenwares and housewares — A popular gifting category where demand was strong for high-end kitchen appliances (food processors, juicers, espresso machines) and cookware purchased at specialty gourmet cooking stores.


Electronics, including high-end televisions for the home and personal electronics where digital book readers were a hot gift item.
Travel, where demand for luxury cruises remains strong and affluents are motivated by the desire to create special memories.


“While we may not see the boom times of 2003-2007, the current LCI shows an increase from the previous quarter, and may signify that the recent bump in retail demand may be sustainable,” said Tom Bodenberg, chief consumer economist, Unity Marketing. “Closer analysis reveals that despite a noted reduction of market pessimism, this has yet to fully translate into increased demand—so, while there are and will be an increase in the index, the pace will not pick up until the marketplace reduces its ‘hold ’em’ mentality”


The latest luxury consumer survey results are published in Unity Marketing’s Luxury Tracking Report 1Q2011—The latest report on what luxuries affluents are buying and how much they are spending.The survey was conducted January 6-13, 2011 among 1,237 affluent luxury consumers (average income $308,700; median net worth $861,000; age 43.9 yrs; 42 percent male and 58 percent female).