Affluent, Generous Young Women Lead Recovery

When it comes to power-shopping our way toward economic recovery, a new report from American Express says well-heeled young women are leading the charge.

"There's certainly more fearlessness about spending among younger, affluent shoppers," Ed Jay, SVP/American Express Business Insights, tells Marketing Daily. "And there's been pent-up demand. But what surprised us most is that the biggest spending increases for these younger women were for other people -- on gifts, charities, and children -- as well as on fitness."

The report is based on its analysis of 90 million cards, four billion annual transactions and $620 billion of total annual spending -- and tracked spending levels before the downturn, throughout the recession, and then in recovery, which it defines as the last quarter of 2009 through the most recent quarter.

Among the super-affluents -- those charging at least $7,000 per month for at least a year -- age was key, he says. During the recession, spending by cardmembers under 45 grew by 1%, and has grown 23% during the recovery. (Super-affluent women 45 and under actually spent 4% more even during the recession, with 23% growth during the recovery.)

These women, which AmEx nicknamed the Golden Givers, increased their card-based charitable donations 4% during the recession, compared with 12% in recovery. Spending on children grew by 7% in the recession, and 11% in recovery. And gifts spending, which declined 16% in the recession, grew by 9% in the recovery.

Among those 45 and older, who are conscious of having less time to shore up their battered retirement portfolios, spending declined 4% during the recession, and has grown by 17% as the economy recovers.

While men over 45 emerged as the next-biggest spending group, Jay says, these "Material Men" were more likely to be spending on things like clothing and travel.

That's not to say these women weren't spending on clothing, too, he adds -- "but growth there was not as strong as in other categories. One thing we noticed was a big gain in Internet spending, especially at online luxury companies such as Rue La La. These shoppers may have been embarrassed to walk out of stores carrying bags full of luxury items during the recession, but they certainly weren't ashamed of buying them online."