Unity Marketing (www.unitymarketingonline.com) is a boutique market research firm specializing in consumer insights for marketers and retailers that sell luxury goods and experiences. Founder Pam Danziger is the author of three books on consumer psychology, including Let Them Eat Cake: Marketing Luxury to the Masses as well as the Classes, and Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience.

Unity Marketing

Q: How do you research the luxury market?

A: The affluent market is households with incomes in the top 25% in the U.S., at $75,000 and above. Luxury consumers live in homes nearly two times larger than the national average — 3,153 square feet, compared with 1,078 square feet.

We conduct quarterly surveys of 1,000 to 1,200 affluent consumers who have purchased luxury in the past quarter. We do not define what “luxury” is — we use a consumer-centric definition because what is luxury to one person may be very different from what it is for another. The categories include auto, home, personal, and experiences.

In the most recent study on the home luxury market we did in 2005, we asked luxury consumers what luxury appointments they have in their homes. This includes fireplaces, spas, steam rooms, gourmet kitchens, home theaters, exercise rooms, gaming rooms, libraries, wine storage, conservatories, and elevators. I was astonished by how few of these appointments they had.

In the U.S. we define luxury by sheer square footage. In a global study we did in seven countries including Italy, China, Japan, and England, we found that in those countries, luxury is not about size, it's about appointments and the way you live.

Q: How is the high-end market doing today?

A: Conventional wisdom says that luxury consumers are immune to the ups and downs of the economy. But that is not the case. They have money but don't feel confident right now. They are translating this lack of confidence into reduced spending. However, they are the last ones into the recessionary thinking and they will be the first ones out — most likely after the November election. There is still hope for luxury marketers through 2008 because affluent consumers are looking for places to put their money and invest, and it's not in the stock market, it's in their homes.

Q: What do high-end clients want?

A: Right now, just as with the rest of the market, they know it's not a good time to sell their house but that it's a good time to upgrade. And they also know they will benefit from any upgrades with a higher quality of life.

Everyone wants quality and customer service. As a researcher, I try to steer clear of these two terms because they are too generic. You can't just deliver “good customer service,” you must translate that into concrete, actionable steps that mean something to the customer, such as making a personal visit when a phone call could do, or delivering a job a week early and 10% under budget.

Q: What influence is the green movement having on high-end clients?

A: Our culture as a whole is moving toward awareness of being good stewards of the environment, including lowering carbon footprints. Luxury consumers are movers and shakers, have high incomes, are highly educated, and are often running their own businesses. They are very sensitive to these issues. High-end consumers also have the luxury to think about green.

They don't necessarily want McMansions, and they often understand that defining luxury by square footage no longer makes sense. Instead of just adding on, they are looking at spending more on kitchens and baths. It's about the “experience” of luxury, not about owning more things or having a home of greater size. It's how you enjoy it and how it enhances your lifestyle. A luxury bath has more life-enhancing potential than does additional square footage.

Q: How can remodelers enhance the process for their clients?

A: Taking yourself out of the equation and looking at the world from the consumer's point of view is the secret to success. You shortchange clients if you assume that they have the same level of expertise as you do. Homeowners may only remodel once or twice in a lifetime — you have been doing this for many years. You have a tremendous amount of experience. It is a powerful advantage if you make your clients aware of your expertise. Remodelers should leverage that expertise. Help your clients look beyond fashion and style to see how the item or design will function.