For the first time in nearly two years, there is evidence affluent consumers are feeling more confident about the economy. However, companies that cater to the luxury market are still not out of the woods, according to recent research from Unity Marketing's Luxury Consumption Index (LCI). "Affluent consumers are changing their patterns of consumption, and these changes may outlast any economic downturn."
Sixty-four percent of LCI respondents said their personal financial situation had declined in the current economic recession. The LCI, which records the attitudes and spending patterns of the affluent, hit a historical low in the third quarter 2008. Results in the first quarter of 2009 showed some signs of positive recovery:
? Affluents are beginning to feel somewhat better—or more correctly, less badly—about their personal financial situation now as compared with three months ago.
? Likewise, they feel the country as a whole is moving in a more positive direction than they did three months ago.
? Affluents are beginning to feel somewhat more optimistic about their future financial situation in the coming twelve months.
Despite these positive indications, over 40 percent of all the affluent consumers surveyed said they plan to cut their spending on luxuries in the next twelve months. "We are seeing a long, slow crawl to higher levels of affluent consumer confidence," says Pamela Danzinger, President of Unity Marketing. "At the same time, there continues to be trouble ahead for luxury marketers, as the affluents are holding back on their expectations about spending more on luxuries for the remainder of the year.'
Sixty-four percent of LCI respondents said their personal financial situation had declined in the current economic recession. The LCI, which records the attitudes and spending patterns of the affluent, hit a historical low in the third quarter 2008. Results in the first quarter of 2009 showed some signs of positive recovery:
? Affluents are beginning to feel somewhat better—or more correctly, less badly—about their personal financial situation now as compared with three months ago.
? Likewise, they feel the country as a whole is moving in a more positive direction than they did three months ago.
? Affluents are beginning to feel somewhat more optimistic about their future financial situation in the coming twelve months.
Despite these positive indications, over 40 percent of all the affluent consumers surveyed said they plan to cut their spending on luxuries in the next twelve months. "We are seeing a long, slow crawl to higher levels of affluent consumer confidence," says Pamela Danzinger, President of Unity Marketing. "At the same time, there continues to be trouble ahead for luxury marketers, as the affluents are holding back on their expectations about spending more on luxuries for the remainder of the year.'