May 9, 2012
PALM BEACH, FL – The top 10 percent of United States households are expected to spend approximately $244 billion across 13 categories this year, a 3 percent increase from last year, according to findings from a study by American Express Publishing and Harrison Group presented at the American Express Publishing Luxury Summit 2012.
The study showed that affluent consumers are concentrating more on quality in life and worth than making more money or focusing on their jobs. Spend is expected to stay steady, but consumers are still nervous about the state of the economy.
“Confidence is still shaken and has changed in the past three years,” said Jim Taylor, vice chairman of the Harrison Group, Waterbury, CT.
“Consumers are already focusing on increasing their spending, but are buying more to increase the quality in their lives, not the acquisition of things in their life,” he said.
The study included participants of those in the top 10 percent of U.S. household income.
Worth it
Consumers are still hesitant regarding how they see their future happiness and employment in addition to the state of the economy.
Because of this, many consumers are saving more.
On average, families in the study are saving approximately 23 percent of their income, where those in the "One Percent" save 34 percent.
Many consumers reported that the recession has made them a more resourceful person, but personal happiness and success numbers are high. This means that affluent consumers are more likely to spend, per Mr. Taylor.
However, they are now much more likely to spend on worth.
In what the study calls the “worth movement,” one-third less affluent consumers say that they are trading down to less-quality or less-expensive goods as compared to the first quarter of 2010.
Indeed, 20 percent of families have concentrated their spending on products, services and travel that meet a very high bar in terms of quality, service and craftsmanship.
Wealth-oriented shoppers are characterized by a preference for more elegant stores, a desire for a pleasant buying experience, a greater likelihood of having close relationships with salespeople and that it is worth paying more for best-quality cars, hotels and jewelry.
Quality over quantity
Not only are affluent consumers spending more on high-quality goods, they are also paying for experiences for family.
This could be because many of them are much more interested in spending time with friends and family than making money or getting promoted.
Luxury consumers are also spending on things that matter to them.
For example, many are giving money to their churches and schools and most feel better about buying brands that give back to various causes.
Despite spending, some consumers are still nervous about the state of the economy.
For example, 78 percent believe that the U.S. is in a recession and 52 percent believe it will stay like that for at least another year.
However, the U.S. may have seen the worst of the economy, per Mr. Taylor.
“I think that we have bottomed out,” he said. “I am a believer that if the economy is not getting worse, it is probably getting better.”
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