spend more on luxury goods. They also have more time to shop for luxury
goods in relation to their younger luxury consumer counterparts.American baby boomer surge The United States is the biggest retail
market in the world for both luxury and non-luxury goods. Retail is the
second-largest industry in the United States in the number of retail establish-
ments and employees. The US retail industry generates $3.8 trillion in retail
sales annually and approximately $11,690 per capita. The affluent market is
also on the increase. In 2000, the total personal wealth of Americans was
more than $25 trillion, with more than 7 million households having a net
worth of over $1 million, and approximately 600,000 households with a net
worth of over $5 million. A substantial proportion of these consumers are the
baby boomers.
The consumer segment referred to as the baby boomers are those born after
the Second World War, between 1946 and 1964. They number approximately
74 million consumers and make up 2 per cent of the US population. They are
the largest and most influential consumer age segment in the United States
and also have the largest earning capacity and the greatest disposable income
in America. With an estimated annual spending power of $2 trillion, they are
a tremendously significant target group for the luxury market.
The baby boomers have moved into their prime earning years and are
currently independent of children who have mostly left home. This gives
them more purchasing and consumption freedom. Also the approaching
retirement of most baby boomers will provide more free time to spend their
money. They will also enjoy longer, more productive lives than any previous
generation as a result of advanced medical care and well-being practices.
Baby boomers are driven by a different set of characteristics than the
previous consumer generation of their age. First, they are more physically and
mentally active, more flexible and willing to try new products and experi-
ences, including experimenting with luxury brands. A baby boomer will
likely not be locked into loyalty for Chanel or Hermès for the rest of their
lives. They will likely be curious to check out the offering of John Galliano,
Matthew Williamson or Vanessa Bruno. Secondly, they are not afraid of
change and even crave change to fuel their energy. They are staying longer in
the corporate world and several of them are even on the verge of starting new
careers or acquiring new education diplomas upon ‘official’ retirement.
Thirdly, the divorce rate among this consumer group is also on the rise. This
common phenomenon also drives change. When people get divorced, they
want to change a lot of things in their lives beginning from their looks to their
luxury brand consumption. This factor is important for luxury brands, as
Americans are known to spend substantially on beauty and image.Japanese balance Japan is the world’s second-largest economy with a
consumer population of approximately 100 million people. This holds great72
luxury fashion branding