More than half of affluent millennials plan to increase their spending in fashion products during the next year, according to the latest survey by American Express Publishing and Harrison Group.
“Survey of Affluence and Wealth in America” found that affluent millennials are more likely than other generations to increase spending across various categories. Overall, the survey indicates that affluent consumers are purchasing more and are optimistic about spending.
“I think the most significant finding is that there is an acceleration of optimism and planned spending in the next 12 months,” said Ryan Manville, vice president of research and insights at American Express Publishing, New York.
“As the affluence level increases, the expectation of spending increases,” he said.
“We have been seeing a positive momentum among the one percenters.”
The Survey of Affluence and Wealth in America examines the attitudes, finances and spending intentions of 1,416 participants with $100,000 in discretionary household income, meant to represent the top 10 percent of U.S. consumers.
The survey conducted during the second quarter of 2013 grouped respondents into three categories: Upper Middle Class consumers with discretionary incomes of $100,000-$149,999, Core Affluent consumers with discretionary incomes of $150,000-$449,999 and One Percenters with household incomes of $450,000 or more.
Looking forward
Overall, the survey found that affluent United States consumers intend to increase luxury spending in accessories, electronics, jewelry, watches, home entertainment, travel and hospitality and women’s hangbags.
Affluent millennials of both genders are planning to spend more on fashion purchases. Fifty-one percent of affluent women plan to spend more in fashion, compared to 39 percent of affluent men.
Versace's millennial-focused Versus collection
Millennials led planned spending in a number of categories. Thirteen percent of affluent millennials plan to spend more on automotive and 45 percent plan to spend more on home décor.
Oscar de la Renta's stationery for younger consumers
The survey also takes into consideration those consumers with a “Worth Dominant” mindset, those consumers who are looking for quality and are not searcing for deals. Thirty-two percent of consumers in the one percent of the top-earning households fit this profile.
The Worth Dominant consumers are savvy online shoppers and also love the in-store experience when making a purchase. Currently, 39 percent of millennials have a Worth Dominant mindset compared to 30 percent during the year-ago period.
Aiming young
Other data has found that the millennial generation seems to be increasing its interest and spending in luxury products.
For instance, Fifty-seven percent of ultra-affluent millennials say that they enjoy purchasing luxury and designer brands compared to 28 percent of all adults who say the same, according to a report from the Shullman Research Center.
The “Generational Differences in Luxury Consumers’ Attitudes and Buying Plans” report found that ultra-affluent millennial luxury buyers have a different attitude toward purchasing goods than Generation X and baby boomers (see story).
Additionally, U.S. shoppers are lagging behind the mobile tendencies of consumers in other markets, with 16 percent of Americans using mobile devices to shop compared to 50 percent in China, according to a report from Havas Worldwide.
“The Digital and the New Consumer Report” found that 26 percent of U.S. consumers feel comfortable making purchases with their smartphones and 32 percent use mobile applications to facilitate in-store shopping. American consumers have been slow to embrace the escalating mobile efforts of retailers, while locations with larger populations of millennials such as China, India and Singapore have been more adaptable (see story).
The millennial generation is an important group for luxury marketers to reel in at a younger age since these consumers are likely to continue spending throughout their lives.
“The millennials are the ones that are going to be the future one percenters,” Mr. Manville said.
“If you have people who are affluent at a young age, they are likely to be high-spending consumers later on,” he said.
“Their wealth will probably not be going away.”
Final take
Erin Shea, editorial assistant on Luxury Daily, New York