NEW YORK: Luxury spending is likely to rebound strongly in the US this year, but brand owners must respond to the changing attitudes and preferences of category consumers.
American Express Publishing commissioned research firm the Harrison Group to survey 1,458 households boasting an annual discretionary expenditure of $100,000 a year.
This audience represents the top 10% of US residences in terms of affluence, and is responsible for an estimated 50% of all outlay among the country's shoppers.
Overall, 15% of the panel intend to boost their purchases of high-end goods, excluding automobiles and holidays, in 2011.
The figure has grown by a quarter when measured against scores delivered in a similar study last year, and doubling totals from 2008.
Moreover, the proportion of contributors hoping to cut back almost halved year on year and dipped by two-thirds compared with 2008, reaching 9% in the latest piece of analysis.
In sum, the demographic is expected to raise its collective expenditure levels by $26.6bn in 2011, hitting $359bn.
"It is a relief to finally be able to see a significant return of affluent consumers to the luxury marketplace," said Jim Taylor, the Harrison Group's vice chairman.
"The growing strength in personal, family economies is sparking the luxury marketplace; motives include purchasing items delayed by the recession."
However, roughly 75% of those polled agreed the financial crisis had taught them to become more resourceful, meaning habits are unlikely to resume their former character.
"There will be more money spent, but it doesn't mean it won't be spent without the prudent skills learned as the result of a very difficult recession," Taylor said.
"This is a survivor's economy with people who have succeeded in surviving the recession demanding a new form of respect."
"The nearly $4tr in their money market funds gives these consumers the power to purchase with cash. Their value equation reflects the price of recession: mature judgment."
At present, the typical top 10% home usually saves 25% of its income, although 34% were "looking forward" to loosening the purse strings in 2011.
Elsewhere, while 70% of interviewees believed the US remained in a downturn, perceptions improved on other indicators.
More specifically, anxiety related to potential redundancies has dropped 50%, and the share of the sample concerned about the possible collapse of their company fell from 28% to 11%.
Cara David, svp, corporate marketing and integrated media at American Express Publishing, also warned pricing would continue to exert a powerful role, alongside service, quality and craftsmanship.
"The new luxury integrates experience with the extraordinary to reach the level of the sublime," she stated.
"This will be a good year for the sensitive merchant who deploys the reach of digital technologies, advertises details of distinction and experiences, and projects a warm welcome though sales and services personnel."
Areas enjoying a surge in demand last year included vacations, where 7% of wealthy shoppers heightened spending from 2009, equalling the amount lodged by hybrid cars.
Home décor and furnishings recorded 3% lifts apiece, with resorts and fine hotels logging a 2% uptick, the same expansion as footwear.
Less positively, handbags and jewellery both witnessed contractions of 6%, perhaps suggesting that interest in exclusive experiences have retained a greater resilience than individual products.
Data sourced from New York Post/Reuters; additional content by Warc staff