Pamela Danziger, president of Unity Marketing and author of the book “Why People Buy Things They Don’t Need” was the final keynote speaker for the Luxury by JCK show. Her presentation, held Thursday, June 4, addressed the demographics and psychographics of the emerging luxury consumer.
Luxury is always introduced to the class market and filters down to the mass market, she said. Watch the rich, she said, as that’s where the mass market will go next. The mass market seeks class, and the class market seeks a bargain, as evidenced by how many upscale consumers shop at stores like Target and Costco. Buying a quality product on sale is an experiential thrill. At the same time, society is constantly undergoing “luxflation,” or a steady raising of the bar. The extraordinary becomes the ordinary, leaving the consumer searching for something new.
Companies and stores sell things, but consumers buy experiences. They buy fulfillment. She explained the breakdown of the affluent market in America. For a start, most of the consumers in this market earned their wealth, they didn’t inherit it. And luxury consumers are also savers—they won’t jeopardize their lifestyle, and will stop spending at a point where they think it might jeopardize their lifestyle.
“Affluent” is defined as households with more than $75,000 in annual income. The bulk of the affluent market is comprised of households earning between $125,000 and $150,000. Those earning above $150,000 are defined as “super affluent.”
Spending in the affluent market comes 50% from those earning $75,000 to $150,000, and 50% from the super affluent earning above $150,000. So don’t focus all your efforts on the super-affluent, she said—there’s a lot of success to be had reaching the near-affluents and the affluents.
Luxury branding is a triple play, she explained. It’s a synergy between the product brand, the retail brand, and the price/value equation. The brand gives the consumer justification for digging deeper into their wallets, but they won’t pay if they don’t feel there’s a value.