Dive Brief:
- While luxury customers’ optimism about the economy is growing, the sentiment isn’t translating into plans to spend on luxury items, according to the Saks Luxury Pulse report, released last week.
- In the next three months, 57% of Saks’ survey respondents said they are planning to spend the same or more on luxury compared to the prior three months. However, this was down from the same period last year, when 62% of respondents said they planned to spend the same or more on luxury.
- Luxury consumers’ optimism about the economy grew to 48%, a 12 percentage point increase from Saks’ prior survey in October 2023. The positive trend in luxury consumer attitudes is unlikely to translate into a significant change in the group’s spending behavior in the near term, but may increase in the second half of 2024, per Saks.
Dive Insight:
After a slump in luxury holiday spending, earnings among luxury brands have been a mixed bag. While LVMH reported record profit in 2023, other companies saw minimal increases or decreased revenue during the year.
Standalone luxury e-commerce platform Saks has been releasing quarterly Luxury Pulse surveys since March 2020, in an effort to “take the temperature” of the luxury consumer. The current report surveyed more than 3,200 adult U.S.-based luxury consumers between Jan. 10 to Jan. 16.
More than half of luxury consumers feel calm about the economy and 70% feel both optimistic and calm about their personal finances, per the report.
The largest increase in overall optimism was among respondents with an income of $200,000 or more. By generation, millennial respondents were the most optimistic about their personal finances. Of millennial respondents, 59% said they were planning to spend more on luxury, 5 percentage points more than Baby Boomer and Silent Generation respondents and 1 percentage point more than Gen X respondents.
The survey asked respondents what they would need in order to increase their luxury spending, and 55% said they would need an enticing sale or promotional event, while 43% said they would need an increase in income.
Despite this reference to sales, the report also found that when shopping for luxury items, 24% of respondents said they were inclined to pay full price rather than wait for an item they like to be on sale.
