American affluent consumers continued to spend significant amounts of money in 2006 indulging in luxury goods and services. In fact, the typical luxury consumer spending on luxuries rose 6.6 percent to reach $56,065, following an increase of 3.8 percent in spending in 2005, according to a recent study.
According to the “Luxury Report 2007 – The Ultimate Guide to the Luxury Consumer Market,” from Unity Marketing, Stevens, Pa., spending on luxury experiences declined slightly in 2006, with spending on home and personal luxuries on the upswing. This reverses a trend from 2005. Spending on luxury automobiles remained flat from 2005 to 2006.
Young Affluents Spent Most Lavishly on Luxury Goods Last Year and Are the Key to Future Growth in the Luxury Market, according to the report.
“In 2006 the most vibrant segment in the luxury market was the young affluents—the high-income, 40 year old and under consumers. I call them the ‘Want-It-All’ generation because they are such active purchasers of luxury, especially luxury goods,” said Pam Danziger, president of Unity Marketing and author of Let Them Eat Cake: Marketing Luxury to the Masses as well as the Classes.
“The young affluents spent a stunning 31.9 percent more on luxury in 2006 than the over 40 year olds. Young affluents have a ravenous appetite to enhance their lifestyles through luxury goods,” Danziger said. “Their hyperactive spending contributed to the shifts we found toward more luxury goods spending in 2006. But they are hardly slackers when it comes to enjoying luxury experiences. They spent just about the same as the older luxury consumers on luxury experiences in 2006.”