Unity Marketing's exclusive Luxury Consumption Index dropped from 86.9 points in January 2010 to 77.6 points in April, www.israelidiamond.co.il said.
The Luxury Consumption Index is based on Unity Marketing's quarterly Luxury Tracking Survey. The latter includes a statistical sample of 1,245 affluent luxury consumers.
The results of the survey indicated important structural changes in the luxury consumer market, said Pam Danziger, President of Unity Marketing. "Affluent consumer confidence is splitting according to income.
"Those with incomes of $250,000 or more increased their spending on luxury 22.6%, while the 'aspirational' affluents increased their spending by only 1.9% percent, from fourth quarter 2009 to first quarter 2010."
"Aspirational affluents" – i.e. those with incomes between $100,000-$249,999 – make up some 21 million households in the United States, and according to Danziger, they are going back to behaving like middle-class consumers, rather than luxury class ones.
"This shift will have significant impact on revenue growth for luxury marketers and retailers over the next six to nine months," she told the Earth Times.
"The rise in the index in January was a result of new year optimism," she continued. "Even though the index dropped 9.3 points in April, it is still higher than it was in October 2009. There is every indication that the recovery as measured by luxury consumer confidence is slowly but surely on track. Yet the decline does predict a slowdown in luxury expenditures."
Tom Bodenberg, Unity Marketing's Chief Consumer Economist added: "Right now the luxury market is at a pivotal point. On the positive side is the recent good performance of the stock market, which reflects an underlying optimism about the future prospects of the economy.
"On the other hand luxury consumers are more committed than ever to saving over the next 12 months. Some 46% of luxury consumers say they will save more, compared with only 29% who expect to spend more on luxury in the next 12 months. Unless affluent's incomes rise, more saving will mean less money to spend on luxury goods and services.
"While there is reason for optimism in the current luxury consumer survey," he concluded, "We advise marketers to remain cautious about prospects for the next quarter or two."
