Despite a dramatic increase in consumer spending on luxury goods last year, the actual number of customers in the market has declined sharply throughout the recession – with no signs of a comeback, new research says.
Luxury clothing and apparel are among the hardest hit sectors according to Unity Marketing’s ‘The Luxury Report 2010: the Ultimate Guide to the Luxury Consumer Market.’
Average spending by luxury consumers increased nearly 30% in 2009, but was driven by a much smaller, ultra-affluent segment of the economy with an average income of about $250,000 and above.
Actual levels of participation in the luxury market, as measured by overall purchase incidence, was down dramatically in 2009 – which means luxury marketers now have fewer customers than prior to the recession.
“While there are many positive signs that the stranglehold the recession had on luxury consumer spending is easing, the luxury market has largely lost the aspirational consumer segment due to the recession,” says Pam Danziger, president of Unity Marketing and lead analyst for the new study.
“Future luxury market growth will depend upon attracting the much smaller, though much more affluent, ultra-affluent consumers to your brand.
“The ultra-affluents will demand higher quality and more value in the luxury purchases they make.
“For 2010 and beyond, providing superior quality and good value will remain the most powerful way for luxury brands to connect with their ultra-affluent target customers.”