More Loyal Customers Driving Upscale Markets

The greatest increases in upscale loyalists were seen among consumers with household incomes over $80,000. The 25 – 34 and 55+ age brackets drew more new loyalists than other brackets.

Not only is the upscale loyalist base growing, but these consumers also account for the lion’s share of sales. In 2005, about one third of upscale retail customers qualified as loyalists, and these consumers accounted for two thirds of all sales for the stores, NPD reported.

Loyalists are more than twice as likely to shop in upscale stores and spend on average more than 50 percent more per shopping occasion. Loyalists spend an average of $95 per shopping occasion, versus $61 on average spent by non-loyalists. They also look to upscale retailers for staples such as dress pants, skirts, dresses and sweaters, while other consumers view them as a source for dressy or special occasion apparel.

“Retailers are searching for ways to separate themselves from one another and the luxury stores are reaching out towards service, unique brands, and designers to keep themselves above the competition,” said author and chief industry analyst, Marshal Cohen, The NPD Group.

“Even things like personal shoppers and special occasion wardrobes are ways that luxury retailers are creating greater loyalty amongst their treasured prestige customers. We are beginning to see a slow down in the aspirational shopper reaching upward towards luxury retailers and this means greater attention to the precious loyal customers for the upper-end market,” said Cohen.