Stevens, PA—Although the nation’s wealthiest consumers, those with incomes $250,000 and above, have reportedly returned to shopping, some of their standby department store favorites may be losing out on their dollars.
In its quarterly survey of the top 2% of U.S. households, Unity Marketing found that fewer “ultra-affluents” are shopping better department and specialty chains than they did last year.
A Need to Rethink Approach to Affluent Shoppers?
While the percentage of ultra-affluents shopping in luxury department stores peaked at nearly three out of four in the third quarter 2010, it has declined precipitously since, leveling off at about 70%, Unity’s data shows. “Holding onto the ultra-affluent market is a job even the top retailers struggle with,” said Pam Danziger, Unity’s president.
Barneys New York, Nordstrom, and Bergdorf Goodman emerged as the top three “luxe” department store destinations among ultra-affluents, Unity reported this week. However, the past year shows a bumpy history with these top shoppers:
●Barneys New York, which currently attracts some 22% of ultra-affluent consumers, has weathered two quarters in the past year when patronage dipped as low as 16%.
●Nordstrom, which ranks second, saw its share of purchase among ultra-affluents declining by more than 5 percentage points from the fourth quarter 2010 to first quarter 2011.
●Saks Fifth Avenue captured the larger share of ultra-affluent shopping this quarter as compared with the last among the seven leading luxury department stores included in Unity Marketing’s luxury tracking survey.
Danziger also said that relatively small declines in patronage on a percentage basis translate into big drops across the market. Indeed, regardless of their favorite luxe department stores, nearly a third of these wealthiest American shoppers are not passing through any of their doors each quarter.
“These top retailers–who are known for being destinations for the wealthiest customers–can serve as both a model and a cautionary tale for others who would like to operate in this space,” says Danziger, author of the new book Putting the Luxe Back in Luxury.
“While the popularity of each store waxes and wanes quarter-to-quarter, the overall trend is that ultra-affluents are slowing their pace of shopping in the luxury department store sector. If the downward trend among ultra-affluents continues, each of these stores may have to rethink their approach if they are to remain a compelling and attractive destination for the wealthy,” Danziger said.