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Affluent Consumer Tracking Study

  • ID: 2760117
  • Newsletter
  • April 2022
  • Region: United States
  • Unity Marketing
A quarterly report about what products and brands luxury consumers are buying and how much they spend on luxuries

In today's hyper-competitive environment, market research is not an option; it is a necessity. Luxury marketers that want to win must stay vigilant in tracking the shifts, turns, and changing preferences in their affluent consumer market. They need up-to-the-minute data, as well as a historical perspective, to anticipate the next major luxury business opportunity or branding challenge. Unity Marketing's Affluent Consumer Tracking Study (previously call the Luxury Consumer Tracking Service) is designed for marketers who need to understand the mindset, purchase behavior and psychology of the affluent consumer segment.

Launched in January 2004, and every three months thereafter, Measure the pulse of the affluent consumers in a longitudinal survey of 1,250+ affluent consumer households. Each quarter ACTS reports what luxuries they bought during the past quarter, how much they spent, where they bought, the luxury brands they became aware of and used, and how they felt about their current and prospective financial status.

Unity Marketing's LCI gives marketers a forward-looking indicator about direction of the economy

Based upon the results of the survey, Unity Marketing also publishes a Luxury Consumption Index (LCI) which tracks how luxury consumers feel and helps marketers anticipate consumers spending in the coming quarters. As a marketer, you look for competitive advantage. What you really need is a look over the horizon, a way to predict economic ups and downs before they occur and before your competition knows to react.

That view is available in Unity Marketing's Luxury Consumption Index, a measure of attitudes, purchases and spending of the affluent consumer - the economy's heavy lifter segment which accounts for only 20 percent of households, but over 40 percent of spending. This index has proven incredibly predictive of larger events in the economy as a whole, in addition to serving as a finger on the pulse of the luxury market. For example:

LCI predicted the recession one-to-two quarters before the 'pain' was felt by marketers - The National Bureau of Economic Research (NBER) declared, approximately a year after the event, that the most recent economic recession began in December, 2007. The LCI anticipated the beginning of this slump as it turned sharply downward starting in the 2Q2007 through 4Q2007. The LCI gave marketers advance warning of the coming shift in consumer sentiment.

LCI tracked the recovery ahead of the economic experts - The LCI indicated that the economy hit its lowest point between the fourth quarter 2008 and first quarter 2009, with a slow recovery through 2009 and into early 2010. This rise anticipated the NBER declaration of the recession's end that they announced in September 2010. Followers of the LCI would have had advanced noticed of the upturn and been ready to act.

In 2012 the LCI forecasts another contraction - Most importantly, quarter to quarter the LCI has tracked the closely-watched expansion and contraction of GDP as reported by the Bureau of Economic Analysis, with LCI data typically available before GDP numbers are reported.

Based on Unity Marketing's most recent LCI data, Unity Marketing predicts a downturn in the economy that may signal the beginning of a double-dip recession. This is a warning for luxury marketers to batten down the hatches and prepare for economic contraction going into the critically important holiday season. As luxury brands look forward and consider product lines for 2013 and beyond, they will need to take this coming economic dip into consideration.

Why is the LCI such a strong predictor of the economy's trajectory?

The LCI measures consumer confidence among just the affluent, unlike other consumer confidence indices that look at consumers across all income levels. The affluent count more than lower-income Americans when measuring their spending power, since they are the economy's 'heavy lifters.' They also are movers and shakers in business, holding the highest paid positions in business. They read the Wall Street Journal every day, watch the stock market ups and downs, make hiring and firing and budgetary decisions in their businesses. They are the most informed consumers, who know when to hold, when to fold and when to spend. Right now, they are communicating extreme caution for the economy through 2014.

Track future shifts in the luxury market before they actually impact your business

Luxury tracking gives luxury marketers the ability to track the ups and downs in the market in real-time and discover how their target market feels about their luxury spending over the next three months. In addition to the four quarterly tracking studies, marketers also receive a year-end summary of luxury consumers. purchases and spending on four categories of the luxury market, including home luxuries, personal luxuries, automobiles and experiential luxuries.

The Affluent Consumer Tracking Study is a cost-effective way for consumer marketers to monitor their brand awareness and usage among their target market. With this data, they can hold their advertising agencies accountable for producing results among the affluent target market.

ACTS gives marketers the data they need to predict changing patterns of affluent shopping consumer behavior before it occurs, so they are ready with new products and marketing initiatives before the changes and shifts in consumer behavior start to gain traction.

The Luxury Consumer Tracking Service is a vital tool to gain more insight and understanding about the luxury market from one of the nation's foremost experts on the mindset of the luxury consumer, Pam Danziger, president of Unity Marketing.

ACTS covers purchases including the lower-income HENRYs consumers to the Ultra-affluent top 2 percent

The survey tracks and analyzes two distinct segments in the luxury consumer market representing the top 20 percent of U.S. households by income -- that represents about 25 million households at the top of the income range. Throughout 2013 the average consumer surveyed had a household income between $250,000 to about $300,000.

HENRY (High Earners Not Yet Rich), household incomes of $100,000-$249,999, that make up 90 percent of the total affluent market. There are some 8 or HENRY households for every one ultra-affluent household.

Ultra-Affluents, the income segment making $250,000 and above, that represent the highest spending segment in all categories of luxury, and who make up 2 percent of U.S. households, or 2.5 million households.

ACTS samples Ultra-affluent consumers

In order to give marketers a closer look at the greater purchasing behavior of the top 2% of the affluent consumer market, we sample the Ultra-affluents in each luxury tracking survey. Whereas naturally the ultra-affluents account for only 10 percent of the affluent market, we weight the sample so that one-third (33 percent) of the sample is made up of Ultra-affluents and the remaining 66 percent are the lower-income, lower-spending HENRY consumers.

Syndicated study is customized to add marketers brands and key competitors brands in the survey

Every quarter subscribers receive an analysis report about purchases in 21 different categories of luxury goods and services, including spending and shopping choices. For certain categories luxury brand purchase and usage is also tracked. The ACTS survey provides the basic structure that is customized to meet the specific needs of each subscriber, adding their key brands and 5-6 competitor brands. Categories included in the luxury tracking survey include:

Home Luxuries

- Tabletop, Dinnerware, Flatware, Servingware (including vases, bowls, candle holders, picture frames and/or other tabletop decorative accents)
- Art, Sculpture, Wall Decor, and Antiques (including wall decor, custom framing, sculpture, framed art, antiques, figurines, sculpture and collectibles, art glass, etc.)
- Home Electronics (such as home computers, televisions, home entertainment centers) but NOT Personal Electronics
- Furniture, Lamps and Lighting, Floor Coverings, or Rugs
- Outdoor, Lawn, Patio and Garden Products (such as lawn furniture, patio accessories, plants, grills, lawn equipment, etc.)
- Kitchenware, Cookware, and Housewares (including luxury pots and pans, cooking utensils, cutlery or knives, small appliances, and housewares accessories)
- Major Home Appliances, Bath Fixtures, Window Coverings and/or Building Products (such as luxury kitchen appliances, laundry appliances, cabinets, bathtubs, window blinds, etc.)
- Household Linens, Fabrics, and Soft Goods (including bed linens, bath linens, table linens, curtains, drapes, pillows, blankets, throws and other soft goods.)
- Mattress and Foundation/Box Spring and/or Sleep Systems

Personal Luxuries

- Jewelry, including Fashion Jewelry
- Watches
- Automobiles
- Clothes and Apparel (such as dresses, suits, shirts, pants, etc.)
- Fashion Accessories (such as handbags, wallets, suitcases, shoes, sunglasses, etc.)
- Beauty Products, Cosmetics, Fragrance and/or Skin Care regimes
- Wine, Liquor & Spirits
- Personal Electronics

Luxury Experiences

- Travel (including hotels, luxury transportation, cruises, resorts, etc. for personal travel)
- Dining (including restaurants)
- Salon or Spa Treatments, such as hair, nails, massage, facials, etc. and/or Cosmetic or Beauty Procedures, such as injectibles, laser, surgery, etc.

Where affluents shop also tracked

Not only does ACTS survey include products and brands, it also investigates where people buy their luxuries, including department stores and luxury retailers, including Saks 5th Avenue, Bloomingdales, Neiman Marcus, Nordstrom, Barney's, Macy's and Dillards, as well as the discounters that are popular with luxury shoppers, notably Costco, Target, Kohls and even Wal-Mart. Also included are shoppers choosing home furnishings and/or furniture stores and online websites.

Types of stores tracked by product category include non-store retailers, internet providers and mail order; home furnishing specialty stores; fashion boutiques; appliance/electronics stores; garden/outdoor centers; hardware; pet; art gallery; gift store; jewelry store and more.

Special Added-Value Feature: Every Quarter New Subjects Are Researched

In addition to the regular battery of luxury tracking questions, every quarter a different topic of special interest to luxury marketers is explored. Some recent special investigations included:

- Travel plans and projections for 2012
- Trends in green marketing among luxury consumers
- Luxury consumers and their Internet shopping
- Loyalty marketing and luxury consumers
- Countries that product the best luxury goods

Subscribers set the agenda for the special topics for research.

What Subscribers Get:

- Affluent Consumer Tracking Report: Quarterly analysis report of what the affluent consumers bought in the past three months, what they plan to buy in the next three months, how much they spent and their brand preferences. Each subscriber will have their brands and up to five or six key competitor brands included in the survey.
- Luxury Report - The Ultimate Guide to the U.S. Market for Luxury Goods and Services. Subscribers get two copies of the Luxury Report, for the year preceeding subscription and the year ending subscription.
- LCI Webinar - Every quarter Unity Marketing's president Pam Danziger conducts an hour-long webinar announcing the LCI results from the previous quarter, predictions for the upcoming quarter and summary of major findings from the latest Luxury Tracking Survey
- Access to Unity Marketing's affluent consumer survey panel - Subscribers can access this affluent consumer survey panel for customized market research projects. Costs to be calculated separately.
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