I was fortunate to have attended the American Express Publishing Luxury Summit at The Breakers in Palm Beach a few weeks ago where a number of luxury experts highlighted several trends.
Here are just a few of the interesting observations I heard about: The affluent are shifting from the tangible to the intangible, which means their spending is less about consumption and more about how it will enhance their lives, says Richard David Story, editor-in-chief of Departures, who moderated the event. Story also pointed toward the trend of "über-affluence," which means the existing wealthy class is getting richer by the minute.
"The affluent want their trip to be about more than
shopping; they want it to be about education and self-actualization," says
Story. "They are going to the Galapagos,
Another trend? The aspiring affluent need only to spend a mere portion of their fortunes to temporarily own covetable goods, thanks to the rise in fractional ownership programs. This trend extends beyond owning a portion of a condo or a private jet. Consumers can now rent a designer purse for a brief amount of time (www.frombagstoriches.com); they can also purchase just a fragment of a vineyard or a yacht in order to get bragging rights typically reserved for the rich and famous. Today, there's even an eBay-style site where used luxury goods are sold (www.portero.com).
Christopher Wolfe, managing director and chief investment officer for Merrill Lynch, was upbeat about the health of the ultra-affluent set's pocketbooks. While unease about ever-increasing consumer debt and rising concerns about the housing markets do exist, these factors tend to affect only aspirational consumers, not the select high-net-worth individuals (HNWIs) at the pinnacle of the food chain. Moreover, the wealth of these HNWIs is expected to grow globally by 6 percent annually through 2010. As a result, the revenues from global luxury goods are expected to grow as well. Wolfe notes that the increase in the use of luxury goods must be supplemented by educated and trained people to supply high-touch service. Luxury travel advisors take note: Wolfe also reports that a burgeoning "affluent" market belongs to teens and "tweens," whose influence on the decision making of their affluent parents is increasing.
Dr. Jim Taylor, vice chairman of the Harrison Group,
revealed the findings of the American Express Publishing Annual Study of
Affluence (which was conducted in collaboration with the Harrison Group).
"A $1 million income is no longer rare,"
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