US: Marketing Luxury to GenXers and Boomers
In 2005 luxury consumers of the GenX generation, born from 1965 to 1976, spent 6.3 percent more buying luxuries than their affluent Baby Boomer counterparts. GenXer households averaged $52,781 as compared with Boomers average of $49,672. The biggest spending gap was in the home luxury goods category, where GenXers spent 28 percent more than Boomers on average.
“While Boomers still spend lots of money on luxuries, luxury goods marketers are going to find the younger GenXer affluent consumers a more important part of their target market in the coming years,” says Pam Danziger, president of Unity Marketing and author of Let Them Eat Cake: Marketing Luxury to the Masses — as well as the Classes.
"After years of catering to the Boomers’ luxury appetites, luxury goods marketers need to tap the tremendous spending potential of GenXers. In order to do that, they need new insights into the drives and passions of GenXer generation luxury consumers," Danziger says.
In order to provide new insights into the changing dynamics brought about by the emerging GenXer luxury market, Unity Marketing is undertaking a new consumer insights study in association with its Luxury Tracking service.
Generations of Affluence Consumer Insights Study:
Today’s affluent market is dominated by two generations at two different life stages. These two generations represent the core target market for luxury marketers. Some 55 percent of the affluent consumer households are headed by Baby Boomers, ages 42-to-60, who are approaching or already in their empty-nesting lifestage. About 25 percent of the affluent market are GenXers, aged 30-to-41, who are in the family-formation and young children at home lifestage.
Given their different lifestages, these two generations demonstrate different luxury shopping behavior, with the GenXer affluent households spending more money on average buying luxuries than the typical Baby Boomer. As a result, luxury marketers must understand the two different generations in order to target their marketing communications, advertising and product development efforts effectively.
Unity Marketing is undertaking an intensive investigation of the mindset and consumer psychology of these two distinctive generations of luxury consumers. Through a series of focus groups among luxury consumers (household incomes of $150,000 and above) Unity will examine their differing attitudes toward luxury and how that impacts their buying and shopping for luxury goods and services. Subscribers to Unity Marketing’s Luxury Tracking Study can participate in this special investigation of the generations of luxury.
Methodology:
Six focus groups are planned: two groups among affluent Baby Boomer women; two groups among affluent GenXer women; one group among affluent Baby Boomer men; and one group among affluent GenXer men. Note: The GenXer groups might include some leading edge Millennial generation participants (up to age 29) who qualify based upon income as well, to include their more youthful perspective.
Topics to be Investigated:
The discussion will center on how the different generations perceive luxury — what luxury means to them and how important it is in their lives as a consumer. We will place special emphasis on understanding the generational perspective on luxury, whether it is viewed as the pursuit of material goods as compared with luxury primarily as an experience. In other words, do they primarily perceive luxury as reflected in the things they own or luxury as something they do or experience.
Areas to be investigated are:
- What luxury means to them and how they interpret luxury for their lifestyles?
- How important these specific values in purchasing luxury goods, such as exclusivity, status, prestige, quality, uniqueness, value, brand recognition and awareness?
- To what extent do the following influence you in purchasing luxury goods and services — television advertising, magazine advertising, internet advertising or websites, brand name, celebrity endorsers or users, media coverage, peers, friends, family? For example, does it make you want to buy a luxury if a celebrity you admire favors that brand?
- When and how often they indulge in luxury in their lifestyles as opposed to buying the ordinary brand or service?
- With so many marketers at all ranges of the pricing scale, from Target to Barney’s New York targeting the ‘luxury market,’ has luxury lost its meaning to consumers? If luxury doesn’t mean what it once did, what has replaced it?
- What gives them their greatest luxury satisfaction and happiness — luxuries they buy for their home; personal luxuries they buy for themselves, like fashion, jewelry and watches, cosmetics; luxuries they use such as appliances, electronics and automobiles; or luxuries they experience, such as travel, dining, spa and beauty services?
- For each category of luxury above — home, personal, utilitarian, experiential — we will discuss what makes one product or service more luxurious than another?
- About the luxuries in their lives, what kinds of satisfactions do they derive from the luxuries that they own, including one’s home; collections; hobbies; ‘toys’ like boats, cars, motorcycles, etc.; at home spas, pools; and other lifestyle luxuries?
Deliverables:
Companies that need to better understand the luxury market are invited to participate in this special investigation into the generations of luxury consumer insights study. Sponsors will participate in developing the overall study scope and objectives; have input on the moderator’s guide and focus group presentation materials presented to the study respondents; participate in viewing the focus groups, either live or on tape; receive an in-depth focus group report; and attend a webinar conference to discuss the major findings and implications of the research findings for marketers targeting the luxury consumer market.
To learn more about this study and participating in Unity’s luxury generations research, complete the request form www.unitymarketingonline.com/reports2/luxury/affluence_reg.html for more information or call Pam Danziger at 717-336-1600 or email pam@unitymarketingonline.com
By
M.B. Date
31-07-2006
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