NEW YORK — A desire for individual style or status — once the key catalyst of luxury purchases — is no longer enough to spur most affluent Americans to consume high-end products.
This story first appeared in the November 5, 2003 issue of WWD. Subscribe Today.
Instead, a trio of emotional triggers are driving spending on luxury goods, contended Michael Silverstein, executive officer in Boston Consulting Group’s office of the ceo. Silverstein has identified them as: questing, or embarking on an adventure, journey or personal reinvention; taking care of me, or a desire to foster health, wellness, comfort and spiritual development, and take control of one’s time; and connecting, or finding, building and maintaining personal relationships.
Increasingly, high-end marketers will need to satisfy such desires, if they expect to loosen the purse strings of affluent Americans, Silverstein advised. At stake, he projected, is a luxury market that in the next six years will see $1 trillion in spending by U.S. consumers and $2 trillion in consumer spending globally.
The power of emotional influences over luxury purchasing is underpinned by the expanding economic clout of the haves, including:
- Per-capita income that has doubled in 40 million middle-class U.S. households during the past 30 years.
- The $7 trillion in Americans’ home equity that exists today as a counterbalance to the $7 trillion in home debt.
- The 24 percent of America’s dual-income households where women have higher incomes than men — and where women are making the big spending decisions, like when to pony up for a luxurious vacation or dinner in a fine restaurant.
The upshot? “Marketing luxury today,” Silverstein counseled, “is about offering products and services with emotional and material value — not advertising fantasy images.”