The ultimate luxury good: time

Luxury consumers in the US and much of Western Europe are remarkably similar in that they both place far more emphasis on experiences rather than ownership, according to a report by the Consumer Research Center of The Conference Board.

by The Conference Board
Last Updated: 23 Jul 2013

The report was sponsored by Conde Nast Publications, Gucci Group, Gibson USA, The Ritz Carlton and Tru Vue and is based on an online survey of 1800 affluent consumers in the US, China, France, Germany, Italy, Japan, and the UK. Respondents were over age 18 and in the top 25% income brackets.

"Consumers have remarkably similar perspectives on how to define luxury," says Lynn Franco, Director of The Conference Board Consumer Research Center. "The largest share of luxury consumers (44%) and the largest share of consumers in each country most strongly agree that 'luxury is having enough time to do whatever you want and being able to afford it.' So, for luxury consumers worldwide, time is the ultimate luxury."

Time is the most highly valued luxury (named by 35% of respondents as best matching their personal definition of luxury), then life experiences (25%), followed by having comfort, beauty and quality (18%).

One-quarter or fewer luxury consumers strongly agree that:
* Luxury is less about the material things one has or one owns and more about how one experiences life, a sense of happiness and satisfaction (26% strongly agree).
* Luxury is being comfortably well off and not having to worry about tomorrow (25% strongly agree).
* Luxury is the finer things in life that surround you with extreme comfort, beauty, and quality (25% strongly agree).
* Luxury is the 'best of the best' in all aspects of your life (18% strongly agree).

Luxury consumers' favourite pursuits worldwide include high-tech activities and travel. High-tech activities, such as using a personal computer, the Internet, or a cell phone, rank as the most participated in lifestyle activities by nearly three-quarters of all luxury consumers. Travel comes next, with 69% of luxury consumers worldwide reporting an interest.

The most popular status luxuries owned across the countries surveyed were collections of antiques and rare items (30% of all luxury consumers report owning); original art, paintings and sculpture (31%); and vacation/second home (27%). US luxury consumers led in ownership of antiques or collections of rare items, while the Italian luxury consumers were more likely to own original art. The Italian luxury consumers also enjoy the highest share of vacation or second homes.

Chinese luxury consumers led the other countries in ownership of fine jewelry and watches and in fine wine and spirits ownership, while the French consumers have the highest incidence of fine musical instrument ownership.

Compared with luxury consumers living in other countries, Japanese consumers trail in their participation in the various lifestyle activities included in the survey, such as photography (enjoyed by only 30% in Japan, compared to the international average of 59%); avid book reading (35% versus a 58% average of all countries); listening to records, tapes, DVDs (37% versus 56%).

Other key differences across cultures include:

* American consumers are noted for their interest in cable/satellite television, pets, physical fitness and health foods, electronics, and investing in stocks and bonds.
* British consumers are distinctive in their strong interest in Internet and cell phone usage, videos/DVDs, wine, gourmet goods, health foods, avid book reading, and cable/satellite TV.
* German consumers are more involved in reading books, attending cultural events, gardening, and home furnishings. Italian consumers share many of the same interests as those in Germany, but they are more active in travel. French consumers are similar to those in Germany and Italy, too, but with an even greater interest in gourmet food and wine.
* China has the greatest interest in photography, electronics and home furnishings.

"For the largest share of luxury consumers, luxury is not specifically related to how much something costs or what brand it might be," says Pamela Danziger, president of Unity Marketing and author of the report. "Luxury is highly personal and something the individual interprets and judges for him or herself. But while luxury is highly personal and separated from price and brand, luxury is expected to be something with a quality that sets it far above the ordinary product."

Luxury is about the feelings the consumers get in enjoying their luxury lifestyles, so it is very much an experience, rather than a material good one has or one owns. Luxury is being able to pursue one's personal passions and interests.

Because it is defined personally and about one's experience, luxury is something that everyone can partake in. Nearly three-quarters of those surveyed agreed that "luxury is for everyone and different for everyone." It is not exclusive to one class or group of people.

The vast majority of luxury consumers say they reject conspicuous consumption or buying to impress. While brands don't necessarily define luxury, many luxury consumers look to the brand and the brand's reputation as a signal of quality. China is the only country surveyed in which a significant portion of consumers (46%) tend to agree with luxury being defined by the brand.

Source:
The Global Luxury Market: Exploring the Mindset of Luxury Consumers in Seven Countries
Consumer Research Center Special Report, June 2007, The Conference Board

Review: Joe Gill

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