Study: Ultra-Wealthy Spend More on Experiences, Less on Accessories?

Wealthy ShoppersNew York—Although a new survey of ultra-wealthy U.S. consumers by the Luxury Institute found pentamillionaires plan to spend more money this year on travel, dining out and their wine cellars, 80% said luxurygoods are less important.

In its 2013 State of the Luxury Industry report released Tuesday, the Luxury Institute surveyed pentamillionaires consumers—those with a net worth of at least $5 million and with a minimum household income of $200,000—on their spending plans for the rest of the year.

According to the survey, “jewelry sales especially may be under some pressure, with 25% of the ultra-wealthy saying they will spend less or much less through the remainder of 2013. Handbags are the focus of planned spending cutbacks by 20% of those surveyed.”

Emphasis: ‘Unrivaled Quality, Craftsmanship, Service’

Milton Pedraza, Luxury Institute’s chief executive, said: “Even among the wealthiest consumers, luxury goods and services are considered less important in today’s economy. Luxury brands can capture these increasingly discerning ultra-wealthy consumers by providing unrivaled quality, craftsmanship and service.”

What will these affluent consumers be spending more on? A third plan to spend more on leisure travel. Another 20% of the ultra-wealthy plan to spend “more” or “much more” on dining out, and 19% plans to spend more on wine. Other areas of increased spending include health & fitness (17%) and vacation real estate (17%).

Similarly, Bain & Co. along with Atlagamma, an Italian luxury trade association, recently released their 2013 luxurygoods survey that forecast only 4% to 5% rise in worldwide luxurygoods sales this year compared to a 10% increase last year (at constant exchange rates). The study attributed the decrease to continued slow sales in Europe and a slowdown in luxury spending in Asia-Pacific.

The Bain study also forecast a compound yearly growth rate in luxurygoods sales of 5% to 6% a year between 2013 to 2015—with some additional positive news for luxury marketers: total size of the luxurygoods market is expected to reach 250 billion euros (about $273 billion) by 2015.

 

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com

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