Another aspect of the so-called luxury market is that affluent consumers are more important than may be initially apparent, because their market is definable. While 'luxury' is a subjective term, affluence can be defined, and while there may be many possible definitions, a figure can still be put to what defines the affluent society. In this case it has been defined as the top 10% of American households in terms of net worth.
This top 10% not only controls about 70% of the combined net worth of all households in the USA, but it comprises more than 11 million homes and they spend almost 50% of the total consumer expenditure in the USA. That is a pretty powerful consumer body, and analysis has indicated such people to spend wisely and save well. While it is true that much of their expenditure may be on what most might regard as luxury items, to them they are not luxuries but necessities.
For example, a home gym is necessary for them to keep fit and expensive clothes are essential business wear in their world. They take clients to the best restaurants because that's what is needed to clinch a deal, and they send their kids to the best colleges because they believe it's best for the children. Although the wealthy may pay more, they generally have a genuine reason for doing so.
Affluent consumers apply different criteria when making a purchasing decision, and will often buy expensive items, not because of their price or designer label, but because they are more functional, harder wearing and longer lasting. They are the intelligent choice for those that can afford to purchase them, and this should offer a clue to manufacturing industry and service providers on the strategies that should be applied for new product development and service improvements.
The benefit of a definable market is that it can be used in planning. Whether it is your overall business plan, strategic planning or planning of your development efforts, you need a definable market in order to put numbers to your plan and to measure your performance against it.
Businesses will profit by assessing the factors involved in the purchasing decisions made by affluent consumers and keep these in mind in their forward planning. It makes sense to cater for a relatively small number of people if they are responsible for half the nation's consumer spending. This fact alone demonstrates that this market does spend, even though they spend carefully and wisely.
The question is what are the criteria they use when making a purchasing decision? Are labels important to them, or do they place more importance on reliability and reputation? How do you find this information? The wealthy rarely offer this type of data voluntarily, and do not participate in regular forms of market research or online surveys. The common incentives offered for participation in popular market research are of no consequence or interest to the rich.
In fact, there is an answer to this problem of affluent market research, and it lies in the wealthy realizing that it is to their benefit to participate. Affluent consumers understand that their needs will only be met if they let these needs be known. By volunteering market research information, they will be able to influence future product development in a way that benefits them.
Manufacturing companies also benefit, because they can design products to meet the needs of those most likely to buy them. No business would be happy designing a luxury product and then try to sell it without some form of market research. Most product development arises from a perceived need, and by making their requirements known affluent consumers can be more confident of having them satisfied.
No business is going to ignore the stated needs of 50% of their market, and in terms of luxury goods, likely closer to 100%! By carrying out a market survey among the wealthier consumers, businesses will have more confidence that their research and development will result in significant sales.
If you are unsure what direction to take in your next development, or how affluent consumers would respond to a specific product design change, then you should simply ask them! Many might answer your questions, but a direct response from those involved in purchasing luxury items is going to be of value to your business. Particularly if such responses give you an insight into what the wealthy are looking for next and are prepared to spend their cash on.
The opinion of affluent consumers is extremely important, and if you find yourself lost for contacts amongst the wealthy, or mailing addresses you can use, the most convenient way for you to get that opinion is to use a service that has these contacts that are prepared to cooperate. You get the information you need, and the rich get the developments and the products they desire.
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Information on how to understand and forecast the buying behavior of affluent consumers is available on http://AffluenceResearch.org where you will find out how to receive and to analyze the opinions of the rich through an affluent survey.
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