Affluent consumers in the U.S. have played a critical role in the world of luxury brands. With 11.53 million millionaires in the U.S. in 2013, the American luxury market is considered the largest across the globe. But, while these consumers may appear affluent, they don’t always feel that way.
In the past few years, affluent consumers have shifted their spending habits to align with how they feel about their wealth, and not what the numbers show on their income statements. American’s new attitudes toward wealth and affluence have disrupted the traditional model for luxury marketing in the U.S.
To highlight the top trends that are shaping the luxury market, we published a series of blog posts that were written by Pam Danziger, the president of Unity Marketing. According to Danziger, new luxury trends are not only changing how consumers perceive their wealth, but also how marketers are positioning their brands.
Here are the four key trends covered in the blog series.
While upper-income consumers have largely recovered from the recession, they are still holding back when it comes to spending. Simplicity, back-to-basics, retreat, and downscaling is the mood. Affluent consumers are no longer spending extra on expenditures and indulgences; instead, they are trading down to less premium brands. Consumers are being more selective, more pragmatic, and much more careful about the luxuries they purchase.
For marketers at the luxury-end of the spectrum, younger affluent consumers, under age 45, are more valuable because the younger affluents spend significantly more on luxury goods than more mature affluents. Younger affluents are at a point in their lives when they are making first-time luxury purchases, such as vehicles, major appliances, furniture, and home goods, which become a rite of passage into affluence. Luxury marketers need to begin planning for the transition from one dominant generation (i.e. Baby Boomers and GenXers) to another (Millennials).
Luxury brands need to learn how to tell the story of their brand to a new breed of affluent customers. The idea of consumer aspiration for luxury brands – that people will see the brand as a realization of a hope or ambition – is dead. The truly affluent don’t need status symbols; instead, they need to be inspired to buy up and pay a premium for luxury.
Affluent consumers are expressing luxury in a brand-new style. Consumers are looking for a more understated, even modest, expression of their lifestyle. They want fashion that focuses more on substance than style and on quality at a price that respects the customer's intelligence and personal values.
To learn more about these five trends, download our free white paper, Five Luxe Trends for 2016.
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