Commentary

Wealthy Influenced by Social Media on Luxury Purchases

Over half of high-net-worth individuals (defined as people with $1 million or more in assets) are influenced by social media when buying big-ticket luxury items, according to a survey conducted from July 6-13 by Unity Marketing, a boutique market research firm specializing in consumer insights about luxury goods and experiences.

Fifty-six percent of the wealthy individuals surveyed by Unity said comments or information gleaned from social media influence which retail stores they visit, while 57% said they influence what designers brands they buy, and 59% said they influence what Web sites they visit. The proportions were slightly lower, but still substantial, among the "ultra-affluent" (with annual incomes of $250,000 or more): among members of this group, 49% said social media influenced where they shopped and 47% said it influenced their brand choices. 54% said it influenced what Web sites they visit.

Interestingly, both groups (high net worth and ultra-affluent) gave greater weight to social media in their choices than the merely affluent, defined as anyone with an annual income of $100,000 or more. In this larger group, 34% said social media influenced where they shop and 31% said it influenced which brands they buy. Meanwhile, 41% said it influenced what Web sites they visit.

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As one might expect, younger affluent individuals were more likely to be influenced by social media than their older counterparts. Among affluents ages 24-44, 45% said it influenced where they shop and 44% said it influenced which brands they buy, while 52% said it influences which Web sites they visit. These figures compare to 19%, 13%, and 25%, respectively, among affluents ages 45+.

There are a growing number of studies addressing the social media habits of the wealthy. According to the latest study of "Social Media and Affluent Households" from Spectrem, the percentage of U.S. millionaires who use Facebook almost doubled from 26% in 2010 to 46% in 2011. Another study by Fidelity Investments found that 34% of wealthy individuals (with net worth over $1 million) use social media professionally, including 28% who say they use LinkedIn.

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