The holidays are fast approaching; as the number of shopping days dwindles, uncertainty of how retailers will fare is on the rise. Who will come to the rescue and be the heroes this year’s shopping season? Affluent consumers. As the drama continues around Occupy Wall Street and the 99% take on the 1% in the news, in the parks and in the courthouse, there’s one place that the 1% easily defeats the 99% - and it’s one that benefits all of us – holiday spending. In fact, affluent consumers (those earning more than $100K+) may once again play a critical role in revitalizing spending during the holidays.
The following data are based on Office Pulse research that we conducted.
Compared to less affluent consumers, affluent shoppers are much more likely to plan on purchasing big-ticket items:
It’s not just that they are more likely to plan purchases than other consumers; their own purchasing intent has increased dramatically year-over-year. It’s worth noting that their growth in intent to purchase the following items is at least 25% higher than it is for non-affluent consumers.
Pools or spas
Video game systems
High Definition Televisions
Energy saving appliance
The positive shopping behavior of well-heeled buyers isn’t limited to high-end purchases. Affluent consumers are also much more likely to spend more than $500 per year than non-affluent shoppers in a wide range of key categories.
Many of their purchases will be made at some of the nation’s leading retailers. Among the favorite retailers for affluent shoppers (ones where they are at least 20% more likely to have made purchases than non-affluent shoppers) include such well-known brands as Allen Edmonds, Brooks Brothers, Dillard's, Nordstrom, Macy's, HomeGoods, Nordstrom, Kohl's, Tiffany, Trader Joe's, H&M and Best Buy.
Of these, the retailers seeing the fastest growth (vs. last year) are Macy’s, Nordstrom’s and H&M.
H&M saw its positive brand rating grow by 16%, jumping from 46 to 54% in just the past four months. In addition, H&M brand perceptions (described as reasons one would recommend a brand) saw a 24% increase in “better value,” which may indicate a growing price sensitivity, even among the wealthy.
Macy’s saw a 32% jump in its “very positive” brand rating score and also had growth of 20% and 63% for quality and customer service respectively.
Nordstrom’s reliability and quality scores saw tremendous growth quarter, receiving a boost of 190% and 37% respectively. Nordstrom’s also saw a 15% increase in the highest brand score: “very positive”
The growing spending power and plans for increased buying by affluent shoppers cannot be ignored or overstated as 2011 comes to a close. For retailers, high-end product manufacturers and marketers, reaching these people needs to be an integral part of their 2012 plans.
Advertisers need to be aware that affluents are not only active consumers but also have very active work and personal lives. This requires careful media planning that includes non-traditional communications channels such as new media, digital place-based media and opt-in. The task of reaching this audience is complicated by the fact that they are the least susceptible to simple advertising messages. Instead, they are most likely to respond when their curiosity is aroused by ingenious creative, there is a promise of convenience and the communication delivered within a relevant platform or environment.
For marketers who understand and are able to reach the affluent audience successfully, they will be rewarded. And the loyalty and buying behaviors of wealthy shopper is a gift that benefits everyone.