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LUXURY THEN AND LUXURY TODAY

LUXURY THEN A shared, collective sense of what constitutes “luxury” An easy willingness to spend at the high-end, and pay a premium for true luxury A consistent lifestyle of high-end choices (or at the very least, the aspiration to such a lifestyle) “Mass affluent” consumers engaged in

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LUXURY THEN AND LUXURY TODAY

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  1. LUXURY THEN A shared, collective sense of what constitutes “luxury” An easy willingness to spend at the high-end, and pay a premium for true luxury A consistent lifestyle of high-end choices (or at the very least, the aspiration to such a lifestyle) “Mass affluent” consumers engaged in widespread “aspirational” shopping behavior, and luxury marketers responding accordingly with lower-priced brand extensions LUXURY TODAY 89% agree, “luxury is in the eye of the beholder” 89% agree, “When I decide to purchase a luxury item, I go out of my way to find the best price possible” 92% agree, “To me, small indulgences can be just as meaningful as purchasing a high-end luxury product” Luxury purchases more concentrated among elite groups such as “ultra affluents” (the 2%-3% of Americans with $250,000+ HHI) LUXURY THEN AND LUXURY TODAY SOURCE: MENDELSOHN AFFLUENT SURVEY, POINT-OF-VIEW FORUM, “LUXURY IN 2012 AND BEYOND”

  2. GEN Y 37% OF TOTAL POPULATION: 71.2 M AGES: 18-34 YEARS BORN: 1978-1994 GEN X 21% OF TOTAL POPULATION: 39.8 M AGES: 35-44 YEARS BORN: 1968-1977 BOOMERS 42% OF TOTAL POPULATION: 80.9 M AGES: 45-64 YEARS BORN: 1946-167 AFFLUENT AMERICA Gen Y represents 31% of consumers (18-64) who live in households with $100,000 or more annual income 31%: 16.6M TOTAL HOUSEHOLDS WITH $100,000 AND OVER ANNUAL INCOME(18-64): 53.3M 22%: 11.8M 47%: 24.8M TOTAL U.S. POPULATION 191.9 MILLION AGES: 18-64 YEARS BORN:1946-1994 SOURCE: 2011 CURRENT POPULATION SURVEY, U.S. CENSUS BUREAU

  3. AFFLUENT HEADS OF HOUSEHOLD ANNUAL HOUSEHOLD INCOME: $200,000+ MARRIED WITH CHILDREN MEAN AGE: 30 PROJECTED POPULATION: 1,021,000 EMERGING HEADS OF HOUSEHOLD ANNUAL HOUSEHOLD INCOME: $100,000-199,000 UNMARRIED MEAN AGE: 28 PROJECTED POPULATION:776,000 6% GEN Y TOTAL AFFLUENT POPULATION (ANNUAL HHI OF $100,000+): 16.6 MILLION 5% 12% AFFLUENT CHILDREN ANNUAL HOUSEHOLDINCOME: $200,000+ LIVING WITH PARENTS MEAN AGE: 23 PROJECTED POPULATION:1,915,000 29% ASPIRING HEADS OF HOUSEHOLD ANNUAL HOUSEHOLD INCOME: $100,000-199,000 MARRIED WITH CHILDREN MEAN AGE: 30 PROJECTED POPULATION: 4,724,000 PERCENT OF GEN Y WITH HHI OF $100,000+: 48% ASPIRING CHILDREN ANNUAL HOUSEHOLD INCOME: $100,000-199,000 LIVING WITH PARENTS MEAN AGE: 23 PROJECTED POPULATION: 7,701,000 SOURCE: U.S. CENSUS, DIGITAS, 2012 MENDELSOHN AFFLUENT SURVEY FIVE SEGMENTS OF AFFLUENT GEN Y HOUSEHOLDS Green circles indicate increasing levels of attitudes and behaviors that reflect wealthy spending patterns; blue circles represent more middle-class attitudes and spending patterns

  4. ASPIRING HEADS OF HOUSEHOLD Technology or finance, but in non-metro region, focused on family needs first ASPIRING CHILDREN Retail job rather than career or pursuing “passion” careers like acting or entertainment EMERGING HEADS OF HOUSEHOLD Creative, upwardly mobile in financial services, technology, architecture, advertising and real estate AFFLUENT CHILDREN “Mission” careers like education, the arts, nonprofits or counseling with salaries well below their parents AFFLUENT HEADS OF HOUSEHOLD Traditional high-paying careers like medicine, legal and finance, as well as software design and engineering CAREER PATHS Jobs are a good indication of future wealth

  5. WHERE THEY LIVE: AFFLUENT GEN Y The most affluent group live primarily in Northeast and West. WEST 23% Slightly higher representation of Affluent and Emerging Heads of Household, with other groups evenly distributed. MIDWEST 20% More Aspiring Heads of Households than any other Gen Y groups. SOUTH 32% Higher representation of Gen Y groups Aspiring Heads of Household, Emerging Heads of Household and Affluent Children. NORTHEAST 25% Higher representation of Gen Y groups Aspiring Children, Affluent Children and Affluent Heads of Household.

  6. AVERAGE HOUSEHOLD INCOME AVERAGE PERSONAL INCOME AVERAGE EXPENDITURES ASPIRING HEADS OF HOUSEHOLD: ASPIRING CHILDREN: EMERGING HEADS OF HOUSEHOLD: AFFLUENT CHILDREN: AFFLUENT HEADS OF HOUSEHOLD: GEN Y SPENDING POWER Millenials living with parents spend far more than they earn Spending Power Heads of Household segments spend on home and family expenses. Their Financial Behaviors Heads of Household segments are now more engaged with their finances. SOURCE: MENDELSOHN AFFLUENT SURVEY, 2012, GEN Y (18-34) BASE DIRECTIONAL DATA ONLY

  7. Not Living The Wealthy Lifestyle: Aspiring Heads of Household: Annual HHI: $100,000-$199,000 Married with children Mean age: 30 Aspiring Children Annual HHI: $100,000-$199,000 Living with parents Mean age: 23 Not Yet Living Wealthy Lifestyle, But On The Path: Emerging Heads of Household: Annual HHI: $100,000-$199,000 Unmarried Mean age: 23 Already Living A Wealthy Lifestyle: Affluent Children : Annual HHI: $200,000+ Living with parents Mean age: 23 Aspiring Heads of Household: Annual HHI: $ 200,000+ Married with children Mean age: 30 PROFOUND DIFFERENCES

  8. REACH REACH INDEX INDEX GEN Y AND BOOMERS ENGAGE WTH MEDIAFOR DIFFERENT PURPOSES Gen Y is much more likely to use digital tools to seek out entertainment, while boomers are more utilitarian. The red graphdenotes the reach of each segment; the blue graph denotes the likelihood of the segment to participate in that activity. GEN Y MEDIA USE AND ACTIVITY BOOMER MEDIA USE AND ACTIVITY SOURCE: DIGITAS

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