According to a study released recently by luxury market research firm Unity Marketing, the market for luxury home improvements such as remodeling and redecorating has strengthened in the past year.
About 52 percent of affluent consumers questioned for Unity’s second quarter 2009 Luxury Tracking Survey were involved in a major home remodeling or decorating project in 2009 and the first half of 2010, and on average they spent 40 percent more than 2008 survey participants. The same percentage plan to make major changes in their homes in the second half of 2010 and through 2011, the study found. Unity questioned 1,349 affluent consumers (with an average income of $306,700 and net worth of $15.2 million) for the 2009 survey.
Respondents reported that they had focused their home renovations and redecorating projects on kitchens, bathrooms, living rooms, master bathrooms, and outdoor living areas such as porches and patios.
Since the firm’s last home luxury market report in 2008, 13 percent of affluents purchased a new home this year and 11 percent said they are planning to purchase a new home in the coming year, according to Pam Danziger, Unity’s president.
“What we found was that home improvement was the first category to come out of the recession and that last year affluents were investing more in their homes,” Danziger says. She notes that the strong market activity could have been due to affluents preparing their homes for sale, but because the market for existing luxury homes was as weak as all other home markets, she believes affluents were improving their homes for their own enjoyment rather than as a lure to prospective buyers.
Interestingly, the survey also found that while affluent consumers frequently are assumed to purchase the highest quality—and highest priced—products, on a good/better/best scale nearly 40 percent of respondents preferred the “better”-ranked products, while 21 percent would choose “best.”
According to Danziger, it’s human nature—no matter your financial situation—to want to balance a product’s price tag against its quality. “Most people simply don’t value ‘best of the best’ products. They still want high quality, but they don’t want to get hosed for it,” she says.
Danziger’s study found that one-third of the affluent consumers surveyed who had taken on home remodeling or decorating projects in 2009–10 hired a designer or decorator. The affiliation of the professionals hired has changed significantly, Danziger notes. “There was a big decline in the use of independent professional decorators and designers and a big uptick in the use of professionals associated with a retail or big-box store,” she says.
As part of the survey report “Home Is Where the Style Is,” Unity’s researchers identified four distinct affluent consumer personalities:
- The Castle Keeper—Marked by a spare-no-expenses attitude, this group of affluents tends to buy showpiece brands and the most prestigious decorative items. They want their peers to recognize their good taste.
- The Hostess—Focused on home entertaining and ensuring the comfort of guests, this luxury consumer type most likely will consult a decorator or designer and will shop at a variety of stores.
- The DIYer—Not likely to hire a decorator or designer, this group takes pride in experimenting with new ideas in the home and uses the home as a creative expression of self.
- The Nester—Style is secondary to home comfort for this group of affluents. Their biggest purchases tend to be in categories that improve the comfort of the home for the resident family.
“Marketers really need to understand that not all luxury consumers are the same,” Danziger says. “There’s a tremendous amount of diversity.” And understanding each type of affluent consumers’ mindsets is the first step toward formulating messages that will appeal to a specific group.
