The Age of Luxury

Ageless Marketing has some interesting observations about why high-end stuff did so well last holiday season. If luxury goods prospered partially due to shifting demographics, then this spells more trouble for the discounters. The effect of rising energy costs on their less-affluent customers may be masking another key factor.

Best quote:

"No one gets up in one morning and exclaims, “I’m tired of being middle class.” Buying luxury doesn’t elevate a person from middle class to upper class placement. But growing older does turn many a person into more of a luxury-buying consumer.

With most adults now in the second half of life (130 million 40 and older adults to 86 million 18-39-year-olds) buying behavior has become less anchored to quantitative foundations and more deeply rooted in qualitative foundations. The “New customer Majority” has replaced the buying ethos of “more” with the more discrimination buying ethos of “better or best”."

I've been so focused on why the low end did poorly that I failed to look at why the high end did so well. It will be interesting to see how Wal-Mart and others react to this. No one can afford to lose the Boomers.