How the Luxury Market and the Affluent Market Differ

The luxury market and the affluent market are surprisingly different. Many would believe the two to equate to each other, but not necessarily. It is all connected with the definition of each, one being definable and the other defying all definition.

No matter how many people have tried to define luxury, it cannot be described in financial or marketing terms. The reason is that, while luxury is subjective and in the eye of the beholder, affluence is objective because it can be defined. To explain that further, you could, for argument sake, state that every household earning over $ 250,000 a year is affluent, or that affluence covers the top 10% of American households in terms of disposable income.

Whichever definition you choose, that defines the affluent market and everyone knows if they are affluent or not. Not so for the luxury market. Let’s try the same financial definition for luxury. Every item costing over $ 100,000 is a luxury, and all below is not! So a luxury $ 80,000 vacation is not a luxury? A pretty ordinary 10-year old jet with bits hanging off and selling at $ 100,001 is a luxury jet? Nonsense!

Luxury cannot be defined in financial terms, because it is relative both to the article and to people. Some believe a condo in the boondocks to be luxury while others wouldn’t look past a mansion in the Hamptons. Professor Bernard Dubois stated that luxury could be defined as a ‘price tier’ in any product class, but this is naive because there is a difference in definition between ‘pricy’ and ‘luxury.’ You do not turn an average product into a luxury product by increasing the price.

Luxury is generally regarded as a term indicating quality and comfort, while affluence relates to income – or more accurately, to disposable income. Income able to be spent. However, is there really such a great difference between the luxury market and the affluent market in real terms? We can argue about semantics and terminology, but what really matters to the producers of luxury goods is whether or not they will meet the market demands. Will they sell; are they of the right quality and what will be the demand?

The definitions are irrelevant to the manufacturer or the service providers. What they are concerned about is what are the wealthy going to be buying next year and how much? Will their spending habits be the same as this year or will they change? Whether they are buying luxury goods or not is immaterial – it’s what are they intending to buy, if anything, that is important.

The difference between the luxury market and the affluence market, if any, means nothing to you. If you are supplying to your conception of the luxury market, it makes no difference if others refer to that as the affluent market or anything else: you need access to the way these guys are thinking. How do you get that?

In fact, there are organizations that have built up databases of wealthy people who have agreed to undergo market surveys – affluent market surveys, if you want to call them that. They are prepared to answer questions on their past, current and future spending habits because they realize that by doing so they will be more likely to have their needs met in the future.

If the wealthy don’t provide information on what they may be looking for next year, or even later this year, then who else is going to provide the manufacturers and producers that meet their needs with the data needed for them to do just that? The wealthy understand that even those that produce luxury goods need something to go on so they can plan for the future, in other words, luxury research.

So they come to an understanding with highly respected businesses or organizations that they will participate in affluent surveys, or consumer surveys for the wealthy, on condition that their identities are kept secret and that the information they provide is offered only to those companies that can use it properly. In other words, they will participate, but confidentially, and the data must be used only by those involved in producing luxury goods or where its release would be beneficial to the affluent market.

So, while the definitions of the luxury market and the affluent market might differ, in practical terms there is little difference to those involved in them. It is those that do not buy luxury items as a matter of course that worry about how to define the luxury market and the affluent market are more than willing to discuss their needs for luxury items in the future – with the right people.

For more information on the difference between the luxury market and the affluent market visit the AARC website at, where you will also find how to access the results of the luxury research in which the Center specializes.