Luxury: What They're Buying

In 2006, the typical luxury consumer's spending on luxury items rose 6.6 percent to reach $56,065, following an increase of 3.8 percent in spending in 2005. Of that, last year typical luxury consumers spent $21,700 on luxuries for their home (8.6 percent more than they averaged in 2005), according to Unity Marketing's Luxury Report 2007: The Ultimate Guide to the Luxury Consumer Market. “In our most recent survey, we found that roughly one-third of luxury consumers have plans to redecorate their homes, and about 15 percent plan on doing a major home remodel in the coming year,” said Unity.

Fine watch and jewelry sales are also up: fine watches rose 39 percent and fine jewelry, 10 percent. (By contrast, the fashion or costume jewelry segment declined by 8 percent, and costume watches were off by 20 percent.) Men's jewelry, in particular, is up — to 12 percent at the end of the third quarter, compared to only 5 percent in 2006.

Consumers are also buying a lot of Christmas presents. A study by Harrison Group market research firm, Waterbury, CT, found that households with over $75,000 in income were projected to spend 3.1 percent more in 2007 on the holidays, bringing their total to almost $82 billion, or nearly half of the $169.1 billion all Americans were projected to spend on gifts in the 2007 holiday season. (According to U.S. Census estimates, affluent families now comprise 17 percent of U.S. households, and are projected to reach 22 percent by 2010.)