High-net-worth consumers plan to spend more on travel, dining and wine, and less on jewelry and handbags, in the second half of 2013, according to a new Luxury Institute survey.
The 2013 State of the Luxury Industry report surveyed 504 consumers with net worth of at least $5 million and minimum annual household income of $200,000 to learn about current preferences and future spending of luxury goods and services for the remainder of the year.
Apparently, rebounding home values and the surging stock market are not spreading to the jewelry and handbag sectors. Jewelry sales may be under some pressure, with 25 percent of the ultrawealthy saying they will spend “less” or “much less” through the remainder of 2013. Twenty percent of those surveyed said they would cut back on handbags.
On the other hand, one-third of respondents plan to increase spending on leisure travel in the second half, making hotels, airlines and cruise operators big beneficiaries of additional spending by the country’s wealthiest shoppers. Restaurants are also poised for a boost, with 20 percent of ultrawealthy consumers planning to spend “more” or “much more” on dining out in the second half, and 19 percent spending more on wine. Additional categories seeing upticks are health and fitness (17 percent) and vacation real estate (17 percent).
Other key findings are that only 20 percent agreed that selling online diminishes their perception of a luxury brand, but over 40 percent felt that brands selling mass-market products, distributing to outlets and engaging in discounting are not true luxury brands. Some 63 percent of ultrawealthy customers agreed that the prices of luxury brands have gotten too high relative to the product value. More than 50 percent also agreed that they are turned off by products with visible and prominent brand logos.
More than 80 percent of respondents said luxury goods are less important in the current economic environment, and 73 percent said luxury goods and services are an extravagance.
About half of those surveyed believe too many luxury brands are manufactured in countries known for producing low-quality products, not treating workers fairly and polluting the environment.
Among the study’s conclusions are that most ultrarich consumers buy luxury goods not to show off, but because they feel they hold value and are a reward for personal success. The ultrawealthy expect value-added benefits such as service guarantees and complimentary alterations. Discounts and value-added benefits appeal to consumers with incomes less than $500,000, the study found. Consumers with a net worth of more than $10 million are most likely to believe that luxury products are becoming a commodity and that the luxury market is oversaturated.
“Even among the wealthiest consumers, luxury goods and services are considered less important in today’s economy,” said Milton Pedraza, chief executive officer of Luxury Institute. “Luxury brands can capture these increasingly discerning ultrawealthy consumers by providing unrivaled quality, craftsmanship and service.”
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye