by Hans Eisenbeis
- The well-to-do are feeling the pinch of the current economic downturn, and they’re changing their spending habits just as surely as the middle and lower classes. And since the top 10% are responsible for 25% of the spending in our consumer-driven economy, a slowdown at the top really puts the brakes on (AP 8.4.08).
- Unity Marketing polled more than 1,000 consumers with an average income of $204,000. The company found that there was a 20% decline in purchases of luxury goods in the second quarter of 2008.
- Unity also found that luxury consumer confidence had reached an all-time low in the five years it has conducted the survey.
WHAT THIS MEANS TO BUSINESS
- Luxury spending was already down 4% last year, and it’s expected to take an even steeper dive in the next 12 months.
- When the affluent begin to scrimp, it can have a doubling effect on an already slow economy.
- Today, even the affluent will respond to marketing that emphasizes value, durability, and quality-for-price rather than mere prestige for its own sake. Vanity spending where price is the only significant brand distinction? That short of spending is going into mothballs.