A recent Luxury Tracking Report has shown that that luxury isn’t a major part of life for most affluent people.

Pamela Danziger from Unity Marketing, the company that creates the report, says, “Our latest luxury consumer survey shows that only about 10 percent of affluent consumers live the kind of luxury lifestyle where buying top-of-the-line brands is the norm.”

The report is based on a survey of 1000 consumers with an average income of $155 500 and average luxury spending of $15 283 in the second quarter of 2007. A third of those surveyed said that “luxury is not a part of my lifestyle”, and a further 27% said that while they do prioritize some purchases in order to afford luxuries in areas that really matter to them, high-end luxury living is not a part of their every day life either.

Obviously the income level of the affluent individuals is not particularly high, and this may have affected the results of the study. However, there does seem to be a clear indication that the draw of luxury has been overstated by some, in at least some sectors of the affluent consumer market.

“I think marketers sometimes get too caught up in their business and their brands’ marketing messages. They are clueless as to how the consumers really see things. They project their own excitement onto the consumer, so they read enthusiasm, when the customer really isn’t willing to pay a whole lot of money to buy a luxury that they don’t need or really value,” says Danziger.

“Luxury marketers need to pay attention to the customer and strive to make their products or services truly exciting in order to capture their attention. They need to listen to the consumer to make sure that the values represented by their products and services align with what is really important to the customer. They need to invest in consumer insights that will help them discover what the typical affluent consumer really wants in the luxuries they occasionally indulge in. They need to keep in mind that the customer for whom luxury is an everyday expectation — these ‘best of the best’ consumers — only comprise less than 10 percent of the luxury market. Instead, marketers need to convey to the reluctant luxury customer why their product or service is a smart choice as that occasional treat. They need to emphasize the superior quality, workmanship, materials, or service that they provide and work hard to make customers see why it is worth ‘trading up’ to their brand of luxury item,’ Danziger concludes.

These are good points, and the Luxury Reporter team wholeheartedly agrees. Simply putting a big price tag or an exclusive label on an item doesn’t make it attractive to affluent consumers. To succeed in the luxury business, companies need to deliver exceptional products and services, and meet needs that are real for people in their target markets.

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