As the economic recovery begins to gain steam, more Americans are feeling confident about their purchasing power. They’re so confident, in fact, that interest in buying luxury products and services is on the rise among affluent customers at all household income levels and even among the not-so-affluent consumer.
The Shullman Luxury and Affluence Monthly Pulse conducted by the Shullman Research Center says about one-third (37 percent) of U.S. adults with household incomes of $75,000 or more plan to buy a luxury product or service within the next 12 months. The percentages rise with income, with 61 percent of those whose household incomes are $250,000 planning to buy luxury products and services within the next 12 months, and 74 percent of those with incomes over $500,000 planning to do so.
However, the center notes that those making less than $75,000 also have an interest in luxury products or services, particularly those in more affordable categories such as wine, cosmetics or fragrances. One of the hallmarks of marketing prior to the recession was “aspirational” products and services that appealed to non-luxury consumers with lower-priced versions of luxury brands. It sounds like this market is bouncing back, which is a good sign for the economy. With about 143 million U.S. adults living in homes with household incomes below $75,000, that’s a big market who could have an interest in your luxury product or service.
If you are targeting affluent consumers, consider:
- Traditional media still works best to reach the luxury audience. Shullman found television and magazines are the top advertising methods, both in terms of potential reach and potential effectiveness, when targeting this group.
- Luxury consumers invest a good deal of time in gathering information and researching before making a luxury purchase, Shullman reports. Provide plenty of information to help them along the path to purchase. Even if you are using TV and magazines as your primary advertising channels, make sure these ads drive customers online to your website to learn more about your product or service. Once there, provide multiple ways for them to get more information, whether by calling your customer service reps, chatting online, emailing for additional information or linking out to product and service reviews by former customers.
If you’re targeting the under-$75,000 market, consider:
- Creating less expensive versions of your signature products or services to put them within these customers’ grasp
- Marketing that focuses on “treating yourself” or rewarding yourself with a luxury product or service
- Emphasizing the value of the product or service—i.e., it’s worth the higher price because it will last longer, be more reliable or provide better results than cheaper products
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