Fountain of Youth

Are brands making the most of the dynamic young affluent market?

The American Express Business Insights on luxury spending makes you wonder. Giving a snapshot of global luxury spending in 2009 and the first quarter of 2010, the report examines consumer spending patterns at more than 700 luxury merchants with transactions on annual luxury spending totalling more than $111 billion.

The findings confirm recent data from the likes of Mastercard Spending Pulse and first-quarter company results across the sector: global luxury spending is showing signs of a rebound, and even growth; luxury online retail is a small but hugely successful segment, and BRICS are leading in consumer growth. But this data also sheds some fascinating light on demographic shifts.

The survey focuses on three segments of luxury consumer: Seasoned Spenders, predominantly women with an age averaging 55 years and income of $200k; Core Spenders, again largely female but aged 45 – 54 years old and an income in the $125K-175K range. The third was the younger, more affluent spender, who is typically male and aged between 25 and 44. These Ambitious Spenders earn $200K+. It’s this latter group that garners closer inspection.

Although they represent a small proportion of the overall luxury demographic, they were the most resilient during the downturn, rebounding the most dramatically. The top luxury brands among the Ambitious Spenders changed more significantly over the period examined than the other two segments, demonstrating higher levels of brand experimentation. This receptiveness to brand experimentation suggests that now is a good time for luxury marketers to reach out to young and affluent spenders.

Source
American Express Business Insights – 23 April 10