Demand for residential interior design services has been on a general downward trend for the past year or so. Many factors, already well known to designers, are contributing to this trend — including the aging of clients and current homeowners, a decline in new and existing home inventory for sale, the DIY and sharing economies, and e-commerce.
Another important factor to consider is a changing attitude toward luxury and the use of luxury services. With fewer prospects in the pool, designers need to be mindful of how they are marketing their services and presenting themselves to potential clients.
Individuals or couples likely to consider hiring an interior designer tend to fall into one of two marketing categories according to their income, affluent (those with annual household incomes of $100,000 or more) or wealthy (those with liquid assets of $1 million or more). Within each of these categories there are gradations of wealth, such as the very affluent who have annual household incomes of $250,000 or more, or the very wealthy who have liquid assets of $5 million or more.
Overall, however, according to research conducted by the Shullman Research Center, these two groups tend to have distinct attitudes toward luxury and how their wealth relates to their lifestyle.
Affluent individuals display a somewhat ambivalent attitude toward luxury. When asked in a Shullman survey to describe what they think about when they read, see or hear the word “luxury,” these individuals tend to view a luxury product or service as “top-of-the-line,” “unique” and “quality.”
At the same time, they are sensitive to the fact that such products or services are “expensive,” “high priced,” “overpriced,” “costly,” “extravagant” or “high end.” A study conducted by brand researchers Ipsos found 60 percent of affluents agreed with the statement: “Even though the recession is ‘officially’ over, I am still spending money much more cautiously than previously.”
Together, these findings suggest that affluents need a reason to justify the expense of purchasing a luxury product or using a luxury service. When marketing to this segment, designers need either to emphasize the unique and high-quality service they can provide or position their services as more functional and practical, so as to dissuade the prospect that they are selling a luxury — and hence high-priced — service.
Wealthy consumers, on the other hand, while acknowledging that luxury goods and services come at a higher price, tend to equate them with “name brand,” “exclusive” and the appearance of wealth (“rich”). They are less concerned about the price and more focused on the value and the prestige of what they can acquire.
When marketing to this segment, designers should focus less on budget and promote the custom, unique, exclusive and value-laden result they will deliver to the client.
One area of opportunity for designers, as reported by Just Luxe, is a growing trend among affluents and the wealthy toward merging health, wellness and luxury. Especially among millennials, the more traditional indulgence in conspicuous consumption is being replaced by an investment in self-improvement — everything from high-priced healthy foods to keeping fit and reducing stress.
Author Holly Ashby observes, “Health and wellness now communicates a feeling of simplistic opulence.” Designers should focus on how they can help these clients simplify their lives, provide a healthy environment that supports their wellness goals, and make the home low-maintenance.
This is worth stressing, as this group is more likely to view luxury services or designer goods as “unnecessary” or “nonessential.” In addition, they are more likely to spend money on an adventure or wellness vacation than on a luxury hotel or spa. Demonstrate to them how good design is essential to their health and well being.
A third group of consumers who may consider hiring a designer are the aspiring affluents, those whose incomes do not qualify them as affluents but who appreciate and desire luxury goods and services.
These are the individuals who are more likely to want to hire a designer solely for a design consultation or for advice on what products to buy, or who will experience sticker shock when you tell them your fee. They are not likely to become a desirable client anytime soon.
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