Unity Marketing

What's Happening In The Luxury Market? The Latest Research Provides Contradictory Clues

I have written before on luxury trends derived from American Affluence Center's substantive research. Twice a year, this group publishes a detailed summary of the state of the luxury bandwidth. I discussed the Spring 2010's results, and below are those of Fall 2010. Not dismal, but still, fiscal security and happiness seem like distant visions. Here are a few highlights of the Fall 2010 Affluent Market Tracking Study, #18, as well as some controversial results from Unity Marketing, and Bain & Co. These results and trends are diverse, arguable, and contradictory, pretty much mirroring the state of our economy right now.

The American Affluence Center's report is based on the responses from 439 men and women who promptly responded to their survey and meet the minimum net worth requirement of $800,000. Their households have an average annual income of $290,000, an average net worth of $3.1 million, average investable assets of $1.7 million, and an average primary residence value of $1.1 million. The underlining below is mine, which may define an important future trend.

• The index for future business conditions is 22 points below the prior Spring survey index and 30 points below the Fall 2009 survey. Given the low rating of current business conditions, this future index is relatively negative, as it reflects an expectation of limited improvement from a poor starting point.

• The index for change in the stock market is 14 points below the prior Spring survey index and 33 points below the Fall 2009 survey. The current index reflects a 3 point decline in the "higher" rating and a 12 point increase in the "lower" rating. The "same" rating was 8 points lower. These ratings seem to suggest an expectation that the market will be largely unchanged 12 months out.

Tags: American Affluence reserach Center, Bain Co., Last Call brand, LUXURY GOODS WORLDWIDE MARKET STUDY, Luxury Marketing Council, luxury trends 2010, luxury trends 2011, Millennials, Neiman Marcus, Pam Danziger, Unity Marketing

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A Thing Of Beauty Is A Joy Forever... And A Good Investment?: The Return Of Passion Investing

by Susan Kime (RSS feed) —

John Keats may have been correct -- as he was with a lot of things, but he would never have imagined actually owning the beauty of nature, the thing of beauty subject he was pontificating about in the poem Endymion, or the Beauty Is Truth, Truth Beauty Grecian Urn. In both cases, he admired both nature and the Urn, but never sought to actually OWN them. That's what those 19th century Romantics did – they admired, often from afar. And often, more afar the better. But here we are in the 21st century, when those who have fiscal resources can both admire and possess them -- right now! Enter the world of passion investing.

I have written previously in Luxist concerning the changing definitions of luxury, and how in the course of a year or so, statistics show that the UHNWs and HNWs have shifted their mindset, and thus the paradigm, from conspicuous to conscious, from megalolmaniacal to mindful. This change appears to one consequence of the complex economic culture most of us have experienced since mid 2008. Luxury has evolved now into more than just a major credit card spend with an object purchase. The spend has to have the propensity to make us FEEL a certain way. It has become more about the meaningfulness and the mindfulness of the spend, with the deeper significance of having well-curated, purposeful, inspirational, authentic emotions evoked also by the object purchased.

Tags: American Express Business Insights, art collecters, art collecting, art collection, art collector, Capgemini and Merrill Lynch World Wealth reports, changing definitions of luxury, emotional assets, Harrison Group, luxury investing, luxury investments, Luxury Summit 2010, passion investing, passion investments, The Fine Art Fund, Unity Marketing

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Affluent Consumers Regain A Bit Of Confidence

by Deidre Woollard (RSS feed) —

Filed under: Wealth

Following the luxury surveys lately is getting increasingly confusing, a response perhaps to the uncertainty in the marketplace. The overall consensus seems to be that hopes for better days are alive, they just remain off in the distance a bit. The most recent survey of affluent consumers from Unity Marketing shows results similar to the ones we saw recently in the Bain's "Luxury Goods Worldwide Market" study which is that recovery is coming, it's just not coming too quickly.

Unity Marketing's Luxury Consumption Index reports a modest uptick of 1.5 points in their latest survey of affluents (average income of $207,000). While luxury consumers are still cutting back on spending they do feel more optimistic about the future of both their personal finances and the country's economic recovery. Many of the 1,034 people surveyed said they see a recovery coming within the next twelve months.

What will happen to the luxury goods industry remains to be seen No one knows if the current climate of austerity is permanent. Tom Bodenberg, Unity Marketing's chief economist thinks that luxury consumer spending could rise as a response to the recent enforced wallet tightening. But he also says that the media's focus on "recession chic" could continue to have an effect on the perception of conspicuous consumption. The best possible scenario for luxury goods businesses is that 2009 is a reverse of 2008 which had a strong first few months and then a sudden and deep decline.