Commentary

'Mainstreamers' Matter As Affluence Intersects With Luxury

Recently, a luxury marketer who tends to focus specifically on the affluent marketplace asked me if I knew how many adults with household incomes under $100,000 bought luxury products and services. I then asked him why and he told me he felt that a fairly large number of consumers with household incomes under $100,000 buy luxuries.

I responded that my syndicated survey does measure the mainstream marketplace (the under $100,000 household-income segment) as well as all the affluent marketplaces and that with my survey he could choose his household-income threshold according to how his brand defined affluence. After reviewing the statistics he requested from me, he told me he was astounded my survey indicated that, of the 67 million adults who reported they bought one or more luxuries in the past 12 months, 37 million (a majority of all luxury consumers) stated they had household incomes less than $100,000.

This marketer was correct in thinking that a majority of luxury buyers are not measured by all syndicated surveys. I then told him that when I was the CEO of another syndicated survey, a number of luxury brands talked with me about that survey’s not measuring what some luxury marketers called "mainstream" Americans — consumers who aspire to live a more luxurious life and from time to time buy a lower-priced luxury product or service.

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As the following exhibit from my current survey indicates, mainstream Americans do report they buy luxuries, especially personal luxury goods — some 25 million mainstream consumers, about the same number of personal luxury goods purchasers included in the more affluent income segments measured by the other survey. As noted in the exhibit below, "mainstreamers" are also very important buyers of other luxury categories—especially fine wine, beer, and spirits.

Past-12-Month Purchasers of Luxury Categories in Millions 

In only one category, designer clothing or accessories, were there more luxury buyers from the $100,000+ household-income segments (11 million, compared with 6 million with household incomes under $100,000). Notably, the same number of "mainstreamers" as affluent consumers reported they bought a luxury vehicle (5 million). 

In conclusion, if your organization markets a luxury brand, be aware that "mainstreamers" matter, depending on what your organization is marketing, its positioning in its marketplace, and its starting price points. Also, if you are targeting Millennials, as most luxury brands are trying to do today, your organization needs to consider offering entry-level luxury goods or services with more affordable prices, as the vast majority of Millennials not living with their parents are "mainstreamers."

1 comment about "'Mainstreamers' Matter As Affluence Intersects With Luxury".
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  1. Ron Kurtz from American Affluence Research Center, June 1, 2016 at 1 p.m.

    One must question the value of this data without knowing how "luxury" was defined. A recent survey by NORC Center for Public Affairs Resarch showed that two-thirds of those with income between $50K and $100K would have difficulty finding $1,000 to cover an unexpected bill. For those with $100K+ income, almost 40% said they would have difficulty doing that. A family of 3 or 4 in many major metro area needs  at least $100K just to afford the rent on the average 2 bedroom apartment.

    Of course income can be a poor indicator of the wealth needed to afford "true" luxury. The Federal Reserve Board and the Internal Revenue Service have shown that net worth is a much more stable indicator of wealth than income. 

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