With the economy showing signs of decline, it is widely believed that the very wealthy bracket of consumers will not be affected. But contrary to that belief, luxury consumers are being affected by the slump in the economy. There are several reasons why luxury consumers' interest on luxury goods is waning.
According to a recent study, the number of luxury consumers who believed their financial status have gone down has doubled from the third quarter of last year into the fourth quarter. According to the Luxury Consumption Index, for the third quarter of 2007, only twelve percent of luxury consumes has seen their financial status drop. On the last quarter of last year, 24 percent of the class reported that they believe that they have lost some of their immunity from the slumping economy.
The second gauge for the waning interest of luxury consumers on luxury products is the increased number of affluent consumers believing that the economy is getting worse. During the third quarter of 2007, 44 percent of polled respondents said that they think that the economy is getting worse. For the last three months of 2007 though, that percentage rose to 69 percent.
The Luxury Consumption Index also reported that during the third quarter of 2007, 53 percent of the polled luxury consumes said that they are expecting to be better off in the coming year or twelve months. During the fourth quarter though, that figure declined to just 43 percent. That shows that luxury consumers are becoming less and less interested in buying luxury items such as decorative mirror.
Pam Danziger, president of Unity Marketing said: "Affluent consumers, just like everybody else, feel the pain this time around. Since Unity Marketing began its quarterly tracking study in January 2004, luxury consumers have never expressed such a dismal view of their financial status, their feelings about the direction of the country as a whole and their plans for future spending."
This means that the furniture industry is set to hit a major snag this year. This trend will continue as long as the economic downturn continues. "The prognosis is not good in the short term, as witnessed by the concerns incorporated into the Luxury Consumption Index," said Unity Marketing's forecaster for economics Tom Bodenberg said.
"Now the pain is starting to spread to the luxury retailers and marketers worldwide, many of which are reporting weaker than expected sales in the U.S. market in the vital fourth quarter period," added Danziger.
Bodenberg explained how the Luxury Consumption Index was designed saying: "The index was developed to both measure the level of luxury consumer confidence and to predict trends in the direction of the luxury market overall. A number of key factors that were in full swing last summer accelerated in the fall to erode luxury consumer confidence, and thus erode spending."
He also pointed out that there might be hope yet in the near future. "The light, if any, at the end of the tunnel, could be the recent moves by the Federal Reserve to lower interest rates," said Bodenberg.
Author Resource:-
Chad Isenberg is an antique collector. This 33-year old is based in the Midwest constantly on the road looking for antiques.He is also venturing on his own furniture business. On his free time, he can be found designing new furniture/fixtures.
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