Lady Gaga-themed holiday windows at Barneys New York
Harrison Group and American Express Publishing Corporation, share the key insights from their 2012 Q4 Annual Survey of Affluence & Wealth in America
Now in its seventh consecutive year, the Annual Survey of Affluence and Wealth in America, details the lives and lifestyles of Americans with at least $100,000 in annual discretionary income.
The survey addresses aspects of respondent lifestyle, values, shopping habits, brand preferences, family characteristics, sources of success and wealth, attitudes toward money, lifestyles and media consumption. Providing insights into consumer confidence, and propensity to spend during the upcoming holiday period.
America as a whole is expected to spend less during this period in 2012, but the Top 10% – based on wealth – plan to spend over 20% more. “We’re predicting overall holiday gift spending to decline,” confirms Cara David, Senior Vice President of Corporate Marketing & Integrated Media at American Express Publishing.
“But the top of the market will increase substantially. Luxury retailers can take comfort in the fact that 39% of the ‘Top 1%’ plan to splurge on gifts for their significant others to make the holiday season memorable. Women especially, are also looking to purchase gifts for themselves in categories like fashion, jewellery and accessories.”
Conducting the report…
The survey sampled 625 affluent Americans with at least $100,000 in annual discretionary income. Collectively, these households reflect the top 10% of the American financial elite, representing approximately 12 million households.
Research identified three key segments:
Upper middle class: discretionary income of $100K-$149K
Core affluent: discretionary income of $150K-$449K
Top 1%: discretionary income of $450K+
“ Gift giving will be down 3.4% from last year’s $68.63 billion. ”
Not so surprisingly…
According to the survey, gift giving will be down 3.4% from last year’s $68.63 billion. The top 10% will account for nearly 29% of the total 2012 holiday spend, and will increase their gift giving spend 21.9% this year over 2011. Conversely, the other 90% of households plan to spend 10.9% less this year.
Affluent gift purchasing will continue to focus on individual luxury categories, as 58% of those surveyed intend to give gifts of fashion or beauty, 33% intend to give gourmet gifts such as fine wines (15%), fine spirits (17%), or artisanal foods (17%), and 26% plan to purchase jewellery or watches.
Forty percent of those surveyed have plans to travel this holiday season. Of that group, 41% have already booked their trips.
Affluent Americans are feeling generally positive about their ‘personal economy’. “When examining the gift giving plans of affluent families, it is clear that they have substantially improved their balance sheets," explains Dr. Jim Taylor, Vice-Chairman of Harrison Group.
“Eighty percent carry no credit card debt and over 40% have paid off their homes. The top 10% take pleasure in the private economy of their own household. Five years of responsible spending and resourcefulness have resulted in America’s most successful families giving gifts of greater value this year.”
“ The top 10% will account for nearly 29% of the total 2012 holiday spend ”
Since the last study…
The trend of consumers shopping online for holiday gifts continues to grow, with 18% of affluent consumers saying they will increase the proportion of shopping done online compared with last year.
In all, 38% of affluent consumers say they will do more of their holiday shopping online rather than in stores, 32% say they will do more in-store shopping than online shopping, and 25% say it will be a pretty even mix.
70% said online is better for convenience or ease of shopping, 64% said online is better for product availability and 66% felt they could get the best price online.
If readers remember only one thing it should be…
Luxury customers will be increasing their spending this season on the basis of quality, craftsmanship and assurance.
In fact, two-thirds of the top 10% of wealthiest Americans agree with the statement, “I am looking to buy special gifts this holiday season that have lasting, enduring value.”
Given the spending intentions reported, luxury brands may be the biggest winners this holiday season.
To further investigate affluent behaviour on Luxury Society, we invite your to explore the related materials as follows: