After the recession, high net worth consumers will not return to spending their money on luxury goods the way that many marketing professionals have come to expect, www.diamonds.net says. The future will be "very ugly" for any luxury brand that fails to pay attention to the shift, warns Pam Danziger, industry marketing expert, following her extensive research into spending patterns of affluent consumers. She said "the new normal" in luxury marketing is about delivering new values to the luxury shopper.
During extensive interviews with high net worth consumers — 1,041 individuals with an average annual income of $204,900 — in Beverly Hills, California, she found that many were disenfranchised with consumerism and looking for new alternatives to their lifestyles of conspicuous consumption. The ongoing recession has given the average affluent consumer pause for thought, and now he or she lacks the willingness to spend, suggested Danziger, who is president of Unity Marketing. High net worth consumers are holding off on impulse buying, and a majority of them are changing their spending behavior due to the recession. Among the most popular money-saving strategies are shopping less frequently and reducing the number of dining outings.
Danziger quoted one respondent who said, "I am more thoughtful. I love to shop. Now, I still love to shop, but I am trying to think more about whether I really want and need this at this particular time, as opposed to just getting things and have them sit in the closet and not wearing them." Danziger concluded that this philosophical shift cannot be ignored, and that it will remain with affluent consumers well after the recession has ended.
"Even after the economy improves, people aren't going to go back to buying luxury like they used to," the report determined, citing the fact that 50 percent of respondents agreed with that statement. Given the potential impact of this dramatic shift on sales of luxury items, market teams must tap into the consciousness of the affluent consumer and bring value to the sales floor through a more thoughtful, reserved experience.
"Affluent consumers are redefining, reassessing and reevaluating their lives and their lifestyles. This is happening across the culture, not just among a small segment of the affluent market, and it will mean major shifts in the way luxury brands can market their goods in the new economy. Discounts and sales won't be enough. They will need to realign their brands with the new values that more thoughtful, careful and selective affluent shoppers hold," Danziger concluded.
