Luxury consumers' confidence declined to its lowest level in 2006 at the close of the fourth quarter. This sets the stage for more reserved spending by the nation's affluent consumers on luxury goods and services in the first quarter of 2007.
Unity Marketing's Luxury Consumption Index declined 5.1 points to reach 98.2 points in the fourth quarter 2006, down from 103.3. in the third quarter, according to the latest survey of 1,036 luxury consumers (average income $156.5k and average age 42.8 years).
In keeping with a decline in consumer confidence, the typical luxury consumer spent less on luxury purchases in the period, dropping 3.4 percent from $13,432 during the third quarter to $12,982 in the fourth quarter.
'But it's not all doom and gloom for luxury marketers and retailers,' says Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Shopping Experience. 'Spending on experiences rose modestly in the fourth quarter and spending on personal luxuries went up dramatically. However, a drop in spending on home luxuries pulled the overall spending levels down in the fourth quarter.'
Commenting on the Luxury Consumption Index, Thomas Bodenberg, Unity Marketing's economic forecaster, said, 'Luxury consumers signaled caution with the drop in the index as they enter 2007. While the majority of luxury consumers expect their personal financial status to improve over the next twelve months, they remain concerned about the state of the economy overall. The dollar's continued decline against the Euro and pound sterling and continued political instability in the Persian Gulf region accounts for the softness in luxury demand.'
Unity Marketing's Luxury Consumption Index declined 5.1 points to reach 98.2 points in the fourth quarter 2006, down from 103.3. in the third quarter, according to the latest survey of 1,036 luxury consumers (average income $156.5k and average age 42.8 years).
In keeping with a decline in consumer confidence, the typical luxury consumer spent less on luxury purchases in the period, dropping 3.4 percent from $13,432 during the third quarter to $12,982 in the fourth quarter.
'But it's not all doom and gloom for luxury marketers and retailers,' says Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Shopping Experience. 'Spending on experiences rose modestly in the fourth quarter and spending on personal luxuries went up dramatically. However, a drop in spending on home luxuries pulled the overall spending levels down in the fourth quarter.'
Commenting on the Luxury Consumption Index, Thomas Bodenberg, Unity Marketing's economic forecaster, said, 'Luxury consumers signaled caution with the drop in the index as they enter 2007. While the majority of luxury consumers expect their personal financial status to improve over the next twelve months, they remain concerned about the state of the economy overall. The dollar's continued decline against the Euro and pound sterling and continued political instability in the Persian Gulf region accounts for the softness in luxury demand.'