Good news, marketers and the American economy: the relatively small number of households (10%) that account for nearly half of all consumer spending said they have no intention of cutting back this year.
According to the American Affluence Research Center’s semiannual tracking study of the country’s wealthiest households (based on their net worth), more than half said they do not plan to reduce or defer their expenditures in eight major categories (such as autos, homes and home improvements) and 17 products and services (such as vacation travel, entertainment activities, home good durables, apparel and fine jewelry) over the next year.
“Seventy percent [of these households] seem to be fairly positive about having the same or higher net worth and 60% expect their income to be the same or higher during the next 12 months,” Ron Kurtz, a representative of the American Affluence Research Center, tells Marketing Daily. “As a result, most are apparently not feeling pressure to reduce or defer expenditures.”
The expectation of net worth and income being the same or higher over the next 12 months directly correlates with intentions to maintain spending levels, Kurtz says. The average index for changes in spending is about 20% higher among those who expect income or net worth to maintain current levels than among those who expect a decline, according to the research.
“The affluent in this survey are those with a good foundation of net worth, which is a more stable indicator of wealth than income,” Kurtz says. “The affluent in this survey are likely to be in a better situation in terms of stability of employment and compensation.”
In addition, the survey found that an overwhelming percentage (80%) own at least one mobile device, and more than half own two or more. Apple is the preferred brand for the segment, with iPhones named twice as often as the combined total of other smartphones (including Android and BlackBerry devices) and the iPad cited more than five times more than other tablets.
“It may be the result of Apple being out front with the introduction of mobile devices that were appealing in both functionality and design,” Kurtz says, although the question was not directly addressed in the survey. “Other brands have become more competitive and may be catching up now by providing options that are appealing in both functionality and design at better prices.”