Luxury Consumer Confidence Sinks



Consumer confidence among affluent consumers took its
steepest quarterly plunge since the beginning of the recession, according to
Unity Marketing’s Luxury Consumption Index.

The LCI dropped to 66 points in the second quarter of 2011,
from the previous period’s 82.8 points.

“Consumer confidence among the affluent…has fallen sharply
since the beginning of 2011,” Pam Danziger, president of Unity Marketing, said
in a statement. “Not since the middle of 2009 has it been so low.”

In addition, the average amount spent by affluent consumers
on luxury goods and services in the second quarter of 2011 declined by 8.4
percent from the first quarter, and dropped 18.4 percent over the same quarter
last year.

“If those at the top income levels feel stressed and
unwilling to spend, imagine what it says about people living in middle-income
households,” Danziger said.

Danziger tells JCK
despite recent reports from LVMH that jewelry sales are up, the “recession is
far from over.”

Companies should “face the reality and be aware of how hard
it is right now and work hard for every dollar,” she says. “When you are doing
that you can take risks. Try something new, bring in a new line.”

Danziger suggested luxury marketers target high net worth
customers, defined as having $1 million or more of investible assets, in the
second half of 2011.

“The HNW consumers in our sample feel significantly more
confident about their financial status than those with lower net worth,”
Danziger added.

However, she says high net worth consumers may be hard to
get a handle on. Instead, Danziger says jewelers should focus on marketing to
their communities. “You may just have the affluent folks in your area,” she
says.