SOURCE: Luxury Institute, LLC
NEW YORK, NY–(Marketwire – September 14, 2010) – The objective and independent New York City-based Luxury Institute surveyed U.S. consumers earning at least $150,000 per year — $286,000 average household income and $2.7 million average net worth — to compile the latest semiannual “State of the Luxury Industry” WealthSurvey. This outlook for luxury spending shows 36% of respondents report planning to decrease overall spending on luxury goods and services through yearend. Just 6% will spend more.
Areas that should see above-average increases in spending include leisure travel, dining, fitness and technology. Categories vulnerable to further retrenchment are led by jewelry, followed by home furnishings, gifts, watches, handbags, shoes and cars.
Lower prices spur purchases. One-fifth of wealthy shoppers say that they plan to spend more on “discounted” luxury goods and services for the remainder of the year; 25% have already been spending more on discounted luxury in the first eight months of 2010 than they were in 2009.
Some dangers in perception lie ahead. The most frequently cited qualities that define luxury — superior quality (76%), craftsmanship (65%), and customer service (57%) — are the areas where wealthy consumers are finding the greatest dissatisfaction. More than half (56%) say that craftsmanship of luxury products is on the wane; 51% say that quality is decreasing; 50% notice a slippage in customer service quality and 48% say that luxury products are losing their design value.
“The greatest danger for a luxury firm is to lose its status as a differentiated, premium brand, but wealthy consumer perceptions suggest that luxury overall may be in danger of losing its cachet,” said Milton Pedraza, CEO of the Luxury Institute. “This calls for a renewal of efforts to be unique and exclusive and to execute well on customer service.”
About the Luxury Institute
The Luxury Institute is the uniquely impartial, independent and objective ratings and research and Luxury CRM consulting organization that is the global voice of the high net-worth consumer. The Institute delivers a portfolio of quantitative ratings and research, qualitative research, and Luxury CRM consulting services that deliver profitable solutions to the world’s leading luxury goods and services professionals and brands. The Luxury Institute also operates LuxuryBoard.com, a membership-based online research portal.
The Luxury Institute, LLC