In her just released report on luxury market challenges in 2008, Pamela Danziger of Unity Marketing, and author of Let Them Eat Cake: Marketing Luxury to the Masses as Well As the Classes, offers important insights on how luxury consumers will adapt to what she calls a dismal outlook for the near term in luxury goods.

We interviewed Danziger this past week about how the changed climate would impact  the luxury travelers she calls X-Fluents, Butterflies, Cocooners, and Aspirers. Here are a few excerpts from our conversation:

• Less affluent consumers with lower levels of income (less than $150,000) – what many call the 'trading up' segment – will be 'trading down and out' of the luxury market for most of 2008.
• While the 'trading up' consumers will stop buying the premium luxury brands for now, they have developed a taste for luxury that they are not going to give up completely. That means they will turn to ‘little luxuries’ rather than indulging in big-ticket purchases.
• Many luxury consumers will focus on domestic travel as opposed to traveling overseas, with the exception of cruises (But those high end Z-Fluents and Butterflies in travel? A little bit of wait-and-see in that department.)

We saw Danziger’s longer term view for luxury travel as passionately positive, and our conversation moved on to some of Lux 360’s favorite issues: Democratization of luxury; Affordable luxury; The new power of casual luxury; the ‘mighty math’ of luxury travel, and finally, her view that “ from an international perspective the U.S. market is a bellwether of trends coming across the world, across the globe.”


Hershel Sarbin