In these days of tighter purse strings, even luxury consumers are thinking twice before dropping a wad of cash on indulgent products. In fact, luxury consumers spent 4.4 percent less to pamper themselves in 2007 than in 2006, according to a recent report by Unity Marketing (Stevens, Pa.).

“Affluent Americans backed off markedly in their pursuit of the luxury lifestyle, most notably in the second half of 2007,” said Pam Danziger, president of Unity Marketing. “Going into 2008, their spending continues weak. This will place tremendous competitive pressure on luxury companies and retailers, as they face a newly resistant affluent consumer with a mindset to hold onto their cash, rather than spend it.”

According to “Luxury Report 2008: The Ultimate Guide to the Luxury Consumer Market,” the total market for luxury represented some $321.9 billion in consumer spending in 2007. Among other key findings:

• The typical luxury consumer cut spending on personal luxuries by 12 percent in 2007, but increased spending on experiences by 5.2 percent.
• Luxury spending dropped across all income segments, including near-affluents with household incomes of $75,000 to $99,999, affluents with household incomes of $100,000 to $149,999, and super-affluents with household incomes of $150,000 and above.
• Luxury consumers spent more on some luxury categories, such as kitchen appliances and building products, than on others, such as clothing and fashion accessories.
• Luxury consumers turned from gold and precious stones toward sterling silver and semi-precious stones, spending 10.8 percent less on jewelry in 2007.
• Luxury consumers are shifting from a propensity to indulge in an ostentatious luxury lifestyles to a “less is more” mindset.

For more information, visit www.unitymarketingonline.com. [July 2008 PET AGE]