Mike Landfair

The Luxury Consumer

The Dept. of Commerce announced consumer spending on home furnishings rose to a record $422.1 billion in August, up 4.2 percent over year-earlier sales.  However, according to the Bureau of Economic Analysis a large part of the growth (7.1%) comes from the luxury market.  In addition, a recent survey found that roughly one-third of luxury consumers have plans to redecorate their homes and about 15 percent plan on doing a major home remodel in the coming year.  “According to Unity Marketing, affluent consumers spent a reported $21,700 on upscale home furnishings and appliances in 2006, a 9 percent increase, compared to 8.6 percent in 2005.”

Who are the luxury consumers?
Where are they?
Why focus on them?

The Luxury Institute writes that luxury consumers:

•    Are the top 10% wealthiest U.S. Households based on Net Worth

•    11 million households who can choose to live a 360-degree luxury lifestyle

•    Own 70% of all the wealth in the U.S.

•    Has an average net worth of $3.1 million

•    Average annual income of $256,000

•    Earn 45% of the aggregate annual income in the U.S.

•    For most luxury goods and services firms, these are the 20% or less of the clients who deliver 80% of the profits.

Posted by Mike Landfair on October 3, 2007 | Comments (0)