April 26, 2012
Approximately 60 percent of the nation’s most affluent and young consumers are optimistic about their personal wealth, likely an indication that they will start to spend more, according to the March Mendelsohn Affluent Barometer.
When asked whether they would spend more based on their newfound confidence, approximately 34 percent of consumers said they would spend slightly more or significantly more. This could be paired with the fact that consumers in the 18-44 age bracket and those who make more than $250,000 are the most optimistic consumers in the study.
“I think that the main takeaway for anyone out there trying to sell luxury goods is that there is a better inclination to buy,” said Barry Schwartz, spokesman for the Mendelsohn Affluent Barometer, New York. “The market will call for a continual improvement because it has always been doing well.
“No one really walked away from the luxury market, but there is now a greater inclination towards spending,” he said.
The Mendelsohn Affluent Barometer is a monthly pulse on the most wealthy U.S. consumers. It is produced by Ipsos MediaCT.
Approximately 61 percent of consumers who are in the 18-44 age bracket are optimistic for the future, which is an ideal age group for luxury brands.
Furthermore, 60 percent of consumers who make $250,000 per year have more confidence than those who make less than them.
Half of affluent consumers who make $100,000 or more are now optimistic about the United States economy, which is an increase from 48 percent in February. This is the highest consumer confidence rating since March 2011.
Confidence in personal wealth, which is 60 percent of affluent consumers, is up from 58 percent in February.
In addition, approximately 70 percent of consumers are optimistic about their employers, up from 62 percent the month before.
“In this case, consumers either own their own company or are high-up executives in their firms, so their optimism about their employers is their confidence in themselves,” Mr. Schwartz said.
The economy, in general, is still the top concern for these consumers – with 44 percent saying it is a concern – but projected improvements in the housing market and unemployment have boosted confidence, according to the study.
Other worry areas include health care, moral decline, taxes, education, corruption and financial or political scandals and poverty and social inequality.
Out of questions asked about projected spending habits, 61 percent of consumers reported that they would spend about the same, despite the increase in confidence.
This information could prove very useful to luxury marketers, particularly when coupled with other new findings.
For example, wealthy consumers have more of an affinity for luxury brands that have a mobile application and depend on this interaction not only for solo purchases and research, but for information and assistance in brand stores (see story).
In addition, travel brands that are marketing family-oriented packages and specific destinations such as Cuba, Cambodia and Belize may be catching the eyes of the most affluent travelers (see story).
Also, approximately 33 percent of Millennial consumers are more likely to buy a brand if it has a Facebook page, as compared to 17 percent of non-Millennials (see story).
The fact that the wealthiest and youngest U.S. consumers are the most optimistic also bodes well for luxury marketers.
Millennials are so favored by luxury marketers because they are the next generation of consumers.
Since the Millennial age group stretches up to 35, there is a good chance that the tail end of the group has reached a point in their careers and lifestyle that they can afford luxury goods.
“Younger consumers generally tend to be more optimistic than older consumers,” Mr. Schwartz said. “The fact that the younger affluent and the more affluent are even more optimistic than the older, less-affluent is a significant point.
“People with deeper pockets that are feeling better about their wealth have a natural tendency to buy more,” he said.
Rachel Lamb, associate reporter on Luxury Daily, New York