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Over the holidays, luxury spending went way up, jumping from 8.5% over last year. Jewelry spending rose even more thanks to shoppers like model/author Ariene Sommer, who told the WSJ that she bought herself a $3,000 diamond ring for Christmas. But not everyone tossing around all that cash was actually flush. A second WSJ article reports a new breed of luxury consumers they're calling Newcomers—middle-class shoppers who have suddenly discovered expensive goods.
The Newcomers aren't the same group as the Aspirationals, those folks who save up for the occasional high-end, highly practical item like a bag or a watch. Instead, they're people whose taste for luxury set in after the recession. They're largely female, but they're not all materialistic Millennials, despite what you might expect: An American Express Business Insights study found that they're about one-third Gen X and one-third Baby Boomers.
It's still a mystery why a global downturn would result in less affluent people spending more money. Maybe younger, less financially stable people have fewer funds tied up in real estate, and so didn't suffer when the housing market crashed. Maybe the democratization of fashion has made people feel like luxury goods are more accessible. Or maybe we're just living in a particularly spendy cultural moment. Either way, experts say the shift from super-rich luxury customers to this Newcomer demographic seems like it's here to stay.
· Wealthy treated themselves during the holidays [WSJ]
· Who’s Buying All That Luxury? Not the Rich [WSJ]