NEW YORK, NY--(Marketwired - October 26, 2016) - The independent and objective Luxury Institute today released the 2016 State of the Luxury Industry report, based on surveys conducted with 3,900 affluent consumers from the U.S., U.K., Europe (Italy, France, Germany), Japan and China. Respondents provided detailed answers to questions about their luxury spending plans, relationships with luxury brands, and categories where they plan to cut back or increase their spending in the year ahead among other topics.
Among the survey's insights on a national level, the two-year trend of retrenchment in luxury spending by affluent U.S. consumers is particularly notable. Although the share of high-income Americans who plan to spend money on luxury goods and services has remained steady at 92% since 2014, just 19% say they plan to spend more in the next 12 months than they have in the previous 12 months. This is a sharp decrease from the 30% who indicated plans to spend more in 2014.
Perhaps even more significant than the rising number of affluent U.S. consumers planning to cut back on spending, is the enormous decline in total dollars spent on high-end goods and services. The average anticipated spending on luxury in the coming year is nearly 20% lower than it was two years ago, falling from $20,085 to $16,360. The most often cited categories where affluent Americans say that they plan to trim spending in the year ahead are watches (33%), art (28%), handbags (24%), home appliances (24%), and jewelry (23%). Travel-related spending dominated the top areas in which Americans say they will boost their spending in the year ahead.
Despite the lowered outlook, luxury spending in the U.S. still outpaces that of most other nations. At $16,360, the average planned spending on luxury goods and services by U.S. consumers trails only those of Italy ($17,660) and the U.K. ($16,715), in local currency equivalents.
Over the past two years, there appears to have been a kind of renaissance in the physical store, as a rising share of U.S. consumers say they prefer to purchase luxury products in stores (54% vs. 49%). Meanwhile, the percentage preferring to shop online has fallen from 21% to 17% between 2014 and 2016.
Social media remains a valuable channel for luxury brands to reach their customers, but luxury consumers in the U.S. are not as eager to engage as they were two years ago. Fewer affluent consumers (28% in 2016 vs. 36% in 2014) report following luxury brands on social media, and for those who do follow luxury names on social media are following fewer total brands: an average of 4.04 brands in 2016, down from 4.76 two years ago.
"The figures indicate that we are in the middle of a retail revolution, and it's a market share war, especially in luxury. Brands that are not prepared to dramatically improve their retail performance will fall by the wayside," says Luxury Institute CEO Milton Pedraza.
Survey respondents met the following income thresholds in local currencies: United States ($150,000); United Kingdom (£60,000); France, Germany, Italy (EUR50,000); China (1 million CNY); and Japan (¥150 million).
The complete 2016 State of the Luxury Industry is available for purchase. For complete insights from this and other WealthSurvey reports, visit www.LuxuryInstitute.com, or contact Luxury Institute CEO Milton Pedraza (email@example.com).