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LUXURY THEN AND LUXURY TODAY

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LUXURY THEN A shared, collective sense of what constitutes “luxury” An easy willingness to spend at the high-end, and pay a premium for true luxury A consistent lifestyle of high-end choices (or at the very least, the aspiration to such a lifestyle) “Mass affluent” consumers engaged in

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LUXURY THEN

A shared, collective sense of what

constitutes “luxury”

An easy willingness to spend at the high-end,

and pay a premium for true luxury

A consistent lifestyle of high-end choices (or at the very least, the aspiration to such a lifestyle)

“Mass affluent” consumers engaged in

widespread “aspirational” shopping behavior,

and luxury marketers responding accordingly

with lower-priced brand extensions

LUXURY TODAY

89% agree, “luxury is in the eye of the beholder”

89% agree, “When I decide to purchase a luxury item, I go out of my way to find the best price possible”

92% agree, “To me, small indulgences

can be just as meaningful as purchasing

a high-end luxury product”

Luxury purchases more concentrated

among elite groups such as “ultra affluents”

(the 2%-3% of Americans with $250,000+ HHI)

LUXURY THEN AND LUXURY TODAY

SOURCE: MENDELSOHN AFFLUENT SURVEY, POINT-OF-VIEW FORUM, “LUXURY IN 2012 AND BEYOND”

affluent america

GEN Y

37% OF TOTAL POPULATION:

71.2 M

AGES: 18-34

YEARS BORN:

1978-1994

GEN X

21% OF TOTAL POPULATION:

39.8 M

AGES: 35-44

YEARS BORN:

1968-1977

BOOMERS

42% OF TOTAL POPULATION:

80.9 M

AGES: 45-64

YEARS BORN:

1946-167

AFFLUENT AMERICA

Gen Y represents 31% of consumers (18-64) who live in households with $100,000 or more annual income

31%:

16.6M

TOTAL HOUSEHOLDS WITH

$100,000 AND OVER ANNUAL INCOME(18-64):

53.3M

22%:

11.8M

47%:

24.8M

TOTAL U.S. POPULATION

191.9 MILLION

AGES: 18-64

YEARS BORN:1946-1994

SOURCE: 2011 CURRENT POPULATION SURVEY, U.S. CENSUS BUREAU

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AFFLUENT HEADS OF HOUSEHOLD

ANNUAL HOUSEHOLD INCOME: $200,000+

MARRIED WITH CHILDREN

MEAN AGE: 30

PROJECTED POPULATION: 1,021,000

EMERGING HEADS OF HOUSEHOLD

ANNUAL HOUSEHOLD INCOME: $100,000-199,000

UNMARRIED

MEAN AGE: 28

PROJECTED POPULATION:776,000

6%

GEN Y

TOTAL AFFLUENT POPULATION

(ANNUAL HHI OF $100,000+):

16.6 MILLION

5%

12%

AFFLUENT CHILDREN

ANNUAL HOUSEHOLDINCOME: $200,000+

LIVING WITH PARENTS

MEAN AGE: 23

PROJECTED POPULATION:1,915,000

29%

ASPIRING HEADS OF HOUSEHOLD

ANNUAL HOUSEHOLD INCOME: $100,000-199,000

MARRIED WITH CHILDREN

MEAN AGE: 30

PROJECTED POPULATION: 4,724,000

PERCENT OF GEN Y WITH

HHI OF $100,000+:

48%

ASPIRING CHILDREN

ANNUAL HOUSEHOLD INCOME: $100,000-199,000

LIVING WITH PARENTS

MEAN AGE: 23

PROJECTED POPULATION: 7,701,000

SOURCE: U.S. CENSUS, DIGITAS,

2012 MENDELSOHN AFFLUENT SURVEY

FIVE SEGMENTS OF AFFLUENT GEN Y HOUSEHOLDS

Green circles indicate increasing levels of attitudes and behaviors that reflect wealthy spending patterns; blue circles represent more middle-class attitudes and spending patterns

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ASPIRING HEADS OF HOUSEHOLD

Technology or finance, but in non-metro region, focused on family needs first

ASPIRING CHILDREN

Retail job rather than career or pursuing “passion” careers like acting or entertainment

EMERGING HEADS OF HOUSEHOLD

Creative, upwardly mobile in financial services, technology, architecture, advertising and real estate

AFFLUENT CHILDREN

“Mission” careers like education, the arts, nonprofits or counseling with salaries well below their parents

AFFLUENT HEADS OF HOUSEHOLD

Traditional high-paying careers like medicine, legal and finance, as well as software design and engineering

CAREER PATHS

Jobs are a good indication of future wealth

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WHERE THEY LIVE: AFFLUENT GEN Y

The most affluent group live primarily in Northeast and West.

WEST

23%

Slightly higher representation

of Affluent and Emerging Heads of Household, with other groups evenly

distributed.

MIDWEST

20%

More Aspiring Heads of Households than any other Gen Y groups.

SOUTH

32%

Higher representation of Gen Y groups Aspiring Heads of Household, Emerging Heads of Household and Affluent Children.

NORTHEAST

25%

Higher representation of Gen Y groups Aspiring Children, Affluent Children and Affluent Heads of Household.

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AVERAGE HOUSEHOLD INCOME

AVERAGE PERSONAL INCOME

AVERAGE EXPENDITURES

ASPIRING HEADS OF HOUSEHOLD:

ASPIRING CHILDREN:

EMERGING HEADS OF HOUSEHOLD:

AFFLUENT CHILDREN:

AFFLUENT HEADS OF HOUSEHOLD:

GEN Y SPENDING POWER

Millenials living with parents spend far more than they earn

Spending Power

Heads of Household segments spend on home and family expenses.

Their Financial Behaviors

Heads of Household segments are now more engaged with their finances.

SOURCE: MENDELSOHN AFFLUENT SURVEY, 2012, GEN Y (18-34) BASE DIRECTIONAL DATA ONLY

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Not Living The Wealthy Lifestyle:

Aspiring Heads of Household:

Annual HHI: $100,000-$199,000

Married with children

Mean age: 30

Aspiring Children

Annual HHI: $100,000-$199,000

Living with parents

Mean age: 23

Not Yet Living Wealthy Lifestyle, But On The Path:

Emerging Heads of Household:

Annual HHI: $100,000-$199,000

Unmarried

Mean age: 23

Already Living A Wealthy Lifestyle:

Affluent Children :

Annual HHI: $200,000+

Living with parents

Mean age: 23

Aspiring Heads of Household:

Annual HHI: $ 200,000+

Married with children

Mean age: 30

PROFOUND DIFFERENCES

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REACH

REACH

INDEX

INDEX

GEN Y AND BOOMERS ENGAGE WTH MEDIAFOR DIFFERENT PURPOSES

Gen Y is much more likely to use digital tools to seek out entertainment, while boomers are more utilitarian. The red graphdenotes the reach of each segment; the blue graph denotes the likelihood of the segment to participate in that activity.

GEN Y MEDIA USE AND ACTIVITY

BOOMER MEDIA USE AND ACTIVITY

SOURCE: DIGITAS

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