Affluent Sick and Tired of Frugal Living

Luxury consumer brands and the retailers that sell them were among the hardest hit during the economic downturn. But, now that the economy is slowly picking up there are signs that affluent consumers and those who aspire to shop like them are going back to a whole host of upscale specialty and department stores -- and not just their outlets.


Nordstrom, Neiman Marcus, Saks and Tiffany are among those who posted sales gains that exceeded most analysts' expectations. Tiffany raised its outlook for the quarter after seeing a 17 percent year-over-year jump. Luxury merchants, like others in less affluent climbs, reduced inventory and focused on having products that were high on consumers' shopping lists.

"People are sick of frugality and tired of holding back," Milton Pedraza, CEO, the Luxury Institute, told Brandweek. "People are starting to open their minds to luxury again. Last year, it was a case of them not wanting to look like a conspicuous consumer. Now it's [a case of consumers] buying the best because the best lasts and has value."

New research from the Luxury Institute found luxury product consumers are increasingly going online in search of the bargains. Seventy-eight percent of luxury consumers who shopped online did so to get the best deal while 77 percent did so to compare brands or find a specific merchant's site. These shoppers performed an average of 14 daily searches, and 89 percent report having made a purchase directly related to a search.

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