Luxury Spending Expected to Drop in Most Categories

A survey by YouGov found that luxury spending is on the decline among affluents in 2018.  The survey shows that the percentage of affluent customers who expect to purchase luxury goods and services has dropped from 40% in 2016 to 31% in 2018.  YouGov attributes this decline to a general lack of confidence in the economy despite the fact there is an increase in the number of affluents.  

 

Autos, cruises, jewelry, fashion and hotels are expected to be adversely affected by the pull back in luxury spending.  While luxury product purchases are expected to fall, luxury experience expenditures are not. Nearly two thirds of survey respondents reported that they would rather take a luxury vacation than purchase a luxury product.

 

The motivations for purchasing luxury products also appear to continue to change. Conspicuous consumption is not a driving factor for most luxury purchases. Instead, luxury consumers are looking beyond quality, craftsmanship and service, which are basic expectations of luxury consumers. They also want to partner with companies whose purpose mirrors their own.  Forty percent of luxury consumers believe that luxury brands have comparable quality and craftsmanship.  Simply look around your showroom for proof.  How many products compare equally in terms of quality and craftsmanship? Most likely more than 40%.  What percentage of your customers can tell the difference?

 

Luxury consumers want to purchase products that help them achieve their personal goals.  According to the survey, these goals include a healthier lifestyle, spending more time with family, exploring new places and having new experiences, learning something new, becoming a better person and simplifying their lives.  

 

Opportunities for decorative plumbing and hardware showrooms:  

• Ask the right questions to determine what your customers value the most and the goals they want to achieve with their project.
• Emphasize how your solutions and the products you recommend can reduce stress and enhance health and lifestyle.
• Identify brands with sustainable practices and promote them when telling their brand stories.
• Explain how your solutions will simplify their lives and make them better.