While the latest Ultra High Net Worth survey, The Times of London Rich List showed the Super Rich getting richer (their wealth increased 15% in a year), Unity Marketing, a researcher focused on aspirational/mass affluent consumers (Household Income $100,000 to $400,000) says its newest research shows this segment of the market is again on the retreat “as a new attitude of austerity takes hold.”
In a press release the company noted, “Affluent consumer confidence as measured by Unity Marketing’s Luxury Consumption Index (LCI) dropped sharply in early April 2014 to a level not seen since the depths of the recession in late 2008 and early 2009.”
“The tracking data shows that affluents went through a recovery period where so-called pent up demand boosted affluent spending on luxury in 2010 and 2011, but since 2012 or so spending has been slowing as affluents’ attitudes have taken a downward turn,” wrote Pam Danzinger, the president.
Based on speaking to over 1,400 consumers with an Average Household Income of $269,000 Danzinger stated, “The decline in the LCI in April is rooted in a move toward the middle in affluents’ attitudes toward their financial status. That is, rather than feeling more positive, they see their financial status neither rising nor falling in the immediate future. As a result, they are in a holding pattern.”
In the release, Danziger cautions, “While the new survey results aren’t revealing a doom-and-gloom scenario yet, it does mark a mood toward austerity…(that) also resulted in internet shopping (76 percent) and visits to discount department stores or their websites (68 percent) outranking any other type of retail destination, as measured by both usage and individual shopping occurrences.”
Danziger notes. “There simply isn’t much cause for optimism or viewing the current climate in the consumer market in a ‘glass-half-full’ way. Such optimism can cause you to wait or delay before taking proactive steps to create demand and grow sales.”
As the mid-level consumer in most developed economies stay in a stall, for luxury marketers I think the question I discussed regarding how well the Super Rich know what you are selling is worth bringing to the front of the agenda.