Furniture manufacturers specializing in the creation of upscale products are in for a very bad year as the luxury market continues to see depressing trends. Big names such as Tiffany & Company, Nordstrom, and Saks Fifth Avenue have released their sales output figures which shows lower than expected levels.
This trend though is not unexpected. Pam Danziger, president of Unity Marketing said that they have predicted this trend to pass. Danziger also pointed out that she already advised her clients to get ready for the downturn.
During the holiday season last year, experts have predicted that consumers will be cutting on their purchase of luxury goods. This may be affected by the slumping economy which has been the problem of many industries.
Figures released by a tracking survey showed that there have been considerate decline on purchases of home d©cor fabrics, window coverings, and even kitchenware and beddings. This trend has driven companies to cut down their production thus closing down manufacturing facilities.
Danziger explained the thinking behind cutting down on purchases of luxury goods saying: "In the face of declining luxury consumer confidence and a cut back in spending on material goods, luxury consumers chose to indulge in experiences, notably travel, dining and spa/beauty services, that give them more meaningful gratifications than comes from buying a consumer good like a handbag. Let's face it, a purse is only a purse, but a luxury experience is something to remember."
According to reports, the income of buyers plays a major role in the declining purchase of luxury goods. The upper-middle-income and the lower-upper-income consumers have cut down on their purchase of luxury goods. Consumers included in the super-affluent category meanwhile are not affected with the slumping economy and are reported to have spent the same on luxury purchases.
This is not good for the industry as furniture companies manufacturing luxury goods are relying heavily on the purchases of consumers looking to upgrade their furniture. The upper-middle-income and the lower-upper-income class are known to have their furniture ad home goods upgraded.
Danziger said that luxury goods manufacturer will see how they have become dependent on the aforementioned classes. "If consumer confidence continues to weaken among the ranks of the affluent, it will be a testing time for luxury marketers and brands," said Danziger. "Many luxury brands are going to discover just how dependent they have become upon consumers' penchant to 'trade up' to more luxurious offerings than they otherwise could afford. On the other hand, luxury brands that have built their business on the super-affluent market will likely be immune to this trend," she added.
"The conventional wisdom is that the affluent market is unaffected by the economic ups and downs that impact the average consumer. But today the affluent market is far more diverse and stratified than it historically ever has been. That means luxury marketers need to understand the segments within their target market and develop marketing strategies that clearly differentiate the priorities and passions of these different segments," concluded Danziger. This decline in the sale of luxury goods is not expected to affect the sale of other goods like canopies which are within the reach of most consumers.
This trend though is not unexpected. Pam Danziger, president of Unity Marketing said that they have predicted this trend to pass. Danziger also pointed out that she already advised her clients to get ready for the downturn.
During the holiday season last year, experts have predicted that consumers will be cutting on their purchase of luxury goods. This may be affected by the slumping economy which has been the problem of many industries.
Figures released by a tracking survey showed that there have been considerate decline on purchases of home d©cor fabrics, window coverings, and even kitchenware and beddings. This trend has driven companies to cut down their production thus closing down manufacturing facilities.
Danziger explained the thinking behind cutting down on purchases of luxury goods saying: "In the face of declining luxury consumer confidence and a cut back in spending on material goods, luxury consumers chose to indulge in experiences, notably travel, dining and spa/beauty services, that give them more meaningful gratifications than comes from buying a consumer good like a handbag. Let's face it, a purse is only a purse, but a luxury experience is something to remember."
According to reports, the income of buyers plays a major role in the declining purchase of luxury goods. The upper-middle-income and the lower-upper-income consumers have cut down on their purchase of luxury goods. Consumers included in the super-affluent category meanwhile are not affected with the slumping economy and are reported to have spent the same on luxury purchases.
This is not good for the industry as furniture companies manufacturing luxury goods are relying heavily on the purchases of consumers looking to upgrade their furniture. The upper-middle-income and the lower-upper-income class are known to have their furniture ad home goods upgraded.
Danziger said that luxury goods manufacturer will see how they have become dependent on the aforementioned classes. "If consumer confidence continues to weaken among the ranks of the affluent, it will be a testing time for luxury marketers and brands," said Danziger. "Many luxury brands are going to discover just how dependent they have become upon consumers' penchant to 'trade up' to more luxurious offerings than they otherwise could afford. On the other hand, luxury brands that have built their business on the super-affluent market will likely be immune to this trend," she added.
"The conventional wisdom is that the affluent market is unaffected by the economic ups and downs that impact the average consumer. But today the affluent market is far more diverse and stratified than it historically ever has been. That means luxury marketers need to understand the segments within their target market and develop marketing strategies that clearly differentiate the priorities and passions of these different segments," concluded Danziger. This decline in the sale of luxury goods is not expected to affect the sale of other goods like canopies which are within the reach of most consumers.
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