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Research firm RoperASW has fielded the following question since 1975: “What are you doing or plan to do to cope with high prices?� In 2001, 33 percent of Americans said they had or planned to cut back on luxuries, compared with 44 percent who said so in 1991, and 62 percent who answered so in 1975. “In most research you don't typically get such a clear downward trend, but this trend is very clear,� says Cary Silvers, RoperASW's vice president. “There is a certain entitlement among consumers today. They have an attitude of ‘I'm worth it.’�

Despite these challenging economic times, consumers still have a taste for indulgence. But as Senior Editor Rebecca Gardyn notes in this month's cover story “Oh, The Good Life,� this taste has shifted from mindless indulgence to justified indulgence. Nearly 90 percent of Americans with incomes of $100,000 or more have bought at least one luxury product over the past year, and 85 percent have purchased at least one luxury service, according to a recent survey by Unity Marketing for House & Garden magazine. The recession and the uncertainty over the attacks on Sept. 11 may have caused consumers to re-think their spending, but not at the expense of their own particular needs. “It appears consumers still want a bit of pampering,� Gardyn says. “Therefore, understanding what consumers are looking for from luxury products and services is increasingly important.�

In fact, the market for luxury products has risen steadily: 1 in 7 households today earns an annual income of $100,000 or more, up from 1 in 11 a decade ago, according to the latest Census figures. These growing ranks of upper-income Americans may not all be millionaires, but they do represent a prime target for marketers of luxury goods. Selling to this growing consumer group means understanding their motivations for buying luxury products. To uncover some of these reasons, American Demographics teamed up with E-Poll, an online research firm in Encino, Calif., to conduct an exclusive survey on how Americans define luxury. The survey (based on a nationally representative sample of 876 adults) found that the definition of luxury varies significantly by gender, race and age. You can find the results, plus some psychographics of luxury goods buyers, on page 30.

With this month's issue, we also present a special report on multicultural America. Our 24-page special issue, “Diversity in America,� is the painstaking work of Editor-at-Large Alison Stein Wellner. Relying on data from the U.S. Census Bureau, Wellner provides demographics of our melting pot, including information for racial and ethnic groups by age, household type, and geographic location, as well as each group's spending priorities. Says Wellner: “Our rapidly increasing diversity has the power to transform the business plans in every industry sector, as minority groups account for an ever-growing share of total spending. Multicultural marketing is no longer a task for tomorrow. It should be at the top of the corporate agenda today.�

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