While most of us may not be purchasing a pair of Nike Air MAG ‘Marty McFlys’ for $10,000 as Travis Kelce did in his NFL rookie year or indulging in VIP bottle service, a distinctive growing penchant for luxury goods has emerged in the world of consumer behavior. In his weekly “New Heights” podcast in May. Kelce, a Kansas City Chiefs tight end, said he was “near dead broke” with spending habits that apparently outpaced his earnings, yet he soon came to terms with the issue.
Seventy-four percent of Americans splurge on themselves
From designer handbags to expensive meals and liquor, American consumers seem to have developed a similar taste for the finer things in life with 74% who say they splurge on themselves across categories like fine dining, clothing shopping sprees, spa treatments and event tickets.1 While luxury spending paints a picture of prosperity and indulgence, it also raises questions about sustainability and financial responsibility, much like Kelce faced in 2013.
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The luxury goods market in the U.S. is booming, fueled by a combination of high disposable incomes, celebrity culture, and the desire for quality and exclusivity. The allure of luxury is not just in the products themselves but in the experience and status they convey.
Travis Kelce’s VIP bottle service and our love of fine dining and expensive alcohol
When it comes to luxury spending, expensive meals and liquor take center stage. As Kelce reported in his podcast, VIP bottle service had become a routine indulgence, leading to his eventual financial wake-up call. Americans appear to also share a love of fine meals and expensive liquor, with 30% spending in this category. Dining experiences have seen a surge in popularity, with gourmet experiences that promise uniqueness and quality.
Luxury fashion, enter stage right
Fashion enters the luxury spending stage with 14% of Americans indulging in designer clothing, shoes, and accessories. Brands with strong heritage and exclusivity have become the go-to for consumers seeking to make a fashion statement.
Sixty-one percent of U.S. adults are familiar with celebrity brands and data show they are increasingly popular. Among the aware, 17% of respondents have purchased something from a celebrity-owned company and 10% intend to do so.
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Factors in luxury spending habits
However, it’s important to note that luxury spending isn’t uniform across the board. Factors such as age, gender, income level, and geographic location play a significant role in shaping these spending habits.
For instance, suburban dwellers are 2x as likely to splurge on event tickets than those in rural areas. Females are twice as likely to splurge on physical pampering like spa or salon treatments. Interestingly, those in the $50,000 to $75,000 income bracket report a higher likelihood to splurge on clothing (19%) than those who earn over $150,000 (11%).
As the holiday season approaches, the economic sentiment for U.S. Adults has rebounded slightly as of October 24, and luxury goods and experiences are likely to play a leading role in consumer spending throughout the remainder of the year.
1 CivicScience Polling: 486,858 responses from 01/01/2021 to 10/26/2023, weighted U.S. Adults
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