Hard to believe, but back in 1977, if you made $40,000 a year, you were affluent. Of course, that was 35 years ago, when "Star Wars" episode IV led at the box office, "Laverne and Shirley" was a top TV show, and the gotta-have automotive technology was CB radio. Okay -- maybe CB peaked in 1975.
These days, Ipsos Mendelsohn defines affluent consumers as those who make $100,000 and up (and while the survey size for the firm's annual Affluent Survey has grown from 1,463 to over 14,000) some things don't change: now as then, TV is the top medium for reaching the well-to-do, although the media picture, like the width of a flat-screen TV, has gotten a lot broader.
Bob Shullman, president of Ipsos Mendelsohn, says that while billboards, mail, TV, magazines, and radio are still the strongest channels in terms of reach and influence, the influence of digital media is growing rapidly.
"Print remains highly relevant, and readership for the 147 magazines we track has remained stable, while accessing print by digital means is growing," he said. According to the firm, in 2010, 5% of affluent households owned an e-reader. This year, 14% own one. Last year, 33% owned a smartphone versus 43% this year. This year, affluent consumers spent, on average, 30.3 hours on the Internet versus 25.3 hours last year.
Also rising is affluents' use of social media. According to the study, 57% of affluent households visited Facebook in the past 30 days versus 50% last year. Ipsos Mendelson noted similar increases for YouTube, Amazon, Netflix and Pandora.
The company has also boosted its estimate of the sheer numbers of affluent Americans, from 44.1 million to 58.5 million by reconfiguring its definition basis from "heads of households" to "affluent adults," which includes anyone in an affluent household over 18 years of age, whether parent or child.
It's not just an exercise in statistics because the stakes are high. While the 24.5 million or so affluent households are only 21% of total U.S. households, they represent 60% of all U.S. household income. They hold 70% of U.S. net worth, are twice as likely to purchase goods and services in the over 150 categories Ipsos Mendelsohn tracks, and they spend 3.2 times more than the average in those categories, per the firm.
Steve Kraus, chief research and insights officer at the firm, who sliced and diced the data into affluent segments, points out that within the affluent market, the very wealthy control most of the capital. While those households making $250,000 or more per year are 11% of affluent households, they constitute 33% of affluent income. Households making $2 million or more are 10% of affluent households but 46% of affluent net worth.
Kraus showed that the differences between affluent Millennials who are 18 to 29 years of age and affluent Gen Xers 30 to 44 are profound. For example, while 80% of affluent Millennials are unmarried and only 20% of them have children under 18, 70% of Gen X affluent households include kids under 18 and only 15% of affluent Gen Xers are unmarried.
"Gen Xers face much different life-stage challenges," says Kraus. "We went through the data and found that they score higher on things like watching movies together. They are more likely to agree that their job is not just a job but a career. They are more interested in wines; they see value in spending more on gourmet food."
Boomers are, of course, the sandwich generation: one-third has a child under 18, a third have an over-18 kid, and many more are taking care of elderly parents. "This contributes to a 'home as castle' mentality," says Kraus. Per the study, they are more likely to read shelter publications, they are more likely to be interested in remodeling, and 66% say they feel the pinch of the economy. They are more likely to be "do it yourselfers," more likely to say the kitchen is the center of the living space, and more likely to say they are trying to simplify their lives.
Affluent consumers 65 years of age or older are also the wealthiest, with a $1.6 million dollar net worth on average. A quarter of them owns a luxury car, and 16% are in a country club, twice the percentage of Boomers. Seventy-three percent of affluent seniors wear a wristwatch, while only 30% of Millennials wear one. "They are also most likely to have a 'buy America' mentality," says Kraus. "And they are most likely to have indulgences, keep up with financial news, and they tend to get the top-of-line luxury vehicle with the most luxury options."