Luxury consumers and rich consumers are not the same thing, but different sets of the consumer market for two fundamental reasons. For many companies, it is important to distinguish the difference between them, since minority differences can have a significant impact on your future production and marketing strategies and even on the future success of your business.
Here are two basic ways that consumers of luxury and wealthy consumers differ:
A. Not only rich consumers enjoy the luxury market.
Not only rich people enjoy luxury goods, and many ordinary people will splash again and again on luxury items, especially on special occasions and at certain times of the year. Birthdays, anniversaries, and traditional holidays, such as Christmas and Hanukkah, are often associated with splashing on small luxuries — some not so small!
Weddings, concerts, etc. are also associated with luxury, and although we certainly agree that what is a pleasure or a special purchase for most of us is commonplace for the rich, nevertheless it means that luxury consumers and wealthy consumers are not synonymous.
B. Luxury is undeniable, wealth is not
It is easy to show that, although luxury cannot be defined, wealth can be. Consider the term "luxury." Can you put a figure on it? No - it’s actually impossible to measure luxury in any meaningful way. You cannot say that more than 20,000 dollars is a luxury, because you cannot get a luxury car for this, but you can certainly get a luxurious ice cream!
The fact that you are a luxury may not be for Bill Gates, and your idea of a luxury ski boat might not be good enough for a billionaire next to his luxury cruiser worth $ 50 million. It is not frivolous: it is an easy way to demonstrate that luxury is in the eye of the beholder and cannot be measured, and it is impossible to determine.
However, efficiency can be determined, and in the USA it is usually assumed to be 10% of American households receiving annual income of at least $ 250,000, which is responsible for 36% of total household income and almost 50% of consumer spending. Now 10% of households can not use 50% of total consumer spending on everyday goods and food! Thus, a rich market spends a lot of money on what we call "luxury." and they are sometimes called "necessary"; and sometimes & quot;
C. How to evaluate a rich market
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Unlike most market surveys, historical data from wealthy consumers, and perhaps we could also use the term “luxury consumers”, although we deal with only a small part of the market, we cannot use the forecast for the future with any degree of accuracy. This is big because the spending habits of rich people change with the wind - or, more precisely, with the trading markets - and also they don’t want to buy high-end yachts every year.
Rich consumers need to go personally and ask how they foresee their consumer spending next year and farther into the future. Many will offer you the answers, because they understand that they need to cooperate with designers and manufacturers, if their needs are met. Not all of their expenses are on finished items, and it is important that auto designers feel at a higher end of their market before moving on to new models for wealthy consumers. When it comes to luxury consumers, they tend to take up the slack left by the rich, who still need these inexpensive luxuries, and not all designs are available only to the rich.
Take a car, for example. Many of the improvements in auto technology, developed for wealthy consumers and tested in Formula car racing, ultimately pave the way for cheaper models - luxury models, but not as expensive as high-end market products. The difference between rich consumers and luxury consumers is huge when the extremes are compared, but there is an overlap between the luxurious and rich markets that you often get, when you can define them, and not the other.
