For more than two millennia, people have used the New Year as a time to reflect back on lessons and accomplishments from the previous year, and to plan for the year ahead. In fact, the month January takes its name from Janus, the Roman god of doorways and beginnings, whose two heads allowed him to look backward and forward simultaneously. In the spirit of Janus, I’ll use this month’s column for looking back on Affluent life in 2013, and projecting ahead to the key trends likely to frame the discussion of Affluent lives in 2014.
For Affluents, 2013 was a year of building momentum. Throughout the year, our surveys found Affluents increasingly devoting dollars to discretionary categories such as travel, sports equipment, mobile devices, charitable donations and holiday gift-giving. Our measures of “willingness to pay a premium” for higher-end and luxury offerings rose as well. As the year ended, our December survey found Affluents were far more likely to describe 2013 as a good year than 2012 and 2011. Certainly more described it as a good year for themselves and their family (about six-in-ten) than for the U.S. economy or America as a whole (about three-in-ten), but the upward trend was apparent across the board.
Affluents didn’t particularly feel that 2013 was spectacular, but did feel economic anxiety ease significantly as nothing overly disastrous happened for the (roughly) third consecutive year. Most importantly, unemployment fears eased, directly fueling comfort with spending.
Looking ahead, Affluents expect this growing sense of momentum to continue gaining steam – about seven-in-ten expect 2014 to be a good year for themselves and their family, and four-in-ten expect a good year for America and the economy. More broadly, the Affluent mindset is pivoting toward a more confident and assertive stance. For example, compared to previous years, Affluent New Year’s resolutions in 2013 focused not so much on “spending less” or “saving more,” but rather on “investing” or “contributing more to charity.” Similarly, those expecting to be more aggressive with their investments outnumbered those planning to be more conservative by two-to-one.
If economic anxiety and fear of losing one’s job continue to ease, expect to see continued growth in spending and investment-oriented mindsets throughout 2014. More broadly, expect to see Affluents “rising up the hierarchy of needs” – increasingly freed from economic fear, they are more free to explore what is optional, discretionary, experiential and/or simply fun. Expect a growing media focus and discussion on how Affluents are spending their discretionary money in new ways, and are re-thinking an equally rare commodity – discretionary time. Expect lifestyle trends and a greater cultural focus on leisure pursuits – engaging with interests and hobbies, pursuing passions and bucket lists, and so on.
For Baby Boomers, who remain the single largest generational segment among the Affluent, rising up their hierarchy of needs may be particularly pronounced. Consider first the lifestage (and aging) realities of Boomers. The Baby Boom ended in 1964, so even the very youngest Boomers will turn 50 this year, and the generation for whom the 18-49 demographic was created will have completely aged out of it. They are, simply put, at a lifestage where an increasing awareness of mortality naturally moves one up their hierarchy. And Boomers have always prided themselves on their top-of-the-hierarchy focus on self-actualization, and their ability to reinvent their youthful identities in the face of new lifestage challenges. Taken together, these trends may combine for significant changes in the mindsets of Affluent Boomers – a critically important segment of consumers.
For Boomers as well as their younger counterparts, 2014 is a year that holds promise, potential and gradually-easing pressure. But it is also seen as a year with tremendous uncertainty, particularly economically. As a result, expect 2014 to be a year of Affluents striving for continued momentum, rather than basking in a qualitatively different brave new world.