• by Karl Greenberg , May 1, 2007

Newly wealthy Americans behave more like middle-class consumers than characters out of "The Great Gatsby." They seek quality products based on research and comparison shopping, rather than impulse buys.

The Annual Survey of Affluence and Wealth in America by American Express and the Harrison Group reveals that almost 80% of the affluent population with a discretionary household income--pure spending money--of $125,000 and higher comes from the middle class. Among the findings, the newly affluent considers itself middle-class and doesn't feel at home with wealth.

The survey defined the group as technophilic. They use gadgets heavily, except for TV, which they are using less or whose content they are controlling more. More than half own a DVR, and among these owners, 51% filter at least half of all their television viewing. Nearly 30% of TV viewing by newly affluent is filtered. And this group spends 10.1 hours per week on the Internet, versus 10 hours per week they spend watching TV.

The survey, the first wave of a multiyear partnership between the companies, was garnered from four focus groups in September 2006. It included 1,300 people with discretionary income of $125,000 and above. The discretionary household income is gross income minus costs, such as mortgage, property taxes and income taxes.

The findings, revealed this week, show that 69% of what is billed as "The New American Aristocracy" accumulated its wealth within the past 15 years and spends its money with a middle-class mind-set.

Jim Taylor, vice chairman of Waterbury, Conn.-based Harrison Group, says the middle-class, newly affluent and very affluent segments of the market are growing at around 8.5% each, with newly affluent people concentrated in major suburban areas. "Most people--almost 80%--with money today come from the middle class," says Taylor. "Very few come from money, so the majority has had to learn how to spend money [as affluent consumers]." Newly affluent consumers "pass through a learning process in terms of how to shop in this new category, and they become refined in their tastes."

Ed Kelly, president and CEO of the American Express Publishing Corp., says in a release that the study, addressed to luxury-goods marketers, reveals how personal values determined how most affluent consumers, especially relatively new ones, behave as consumers.

These new buyers are in contradistinction to the traditional, if stereotypical, upscale consumer, which the study calls "passion shoppers," who buy on impulse at full retail price, with lots of help from sales staff. The new upscale consumer is instead a "logic shopper," who shops for quality and value, is more likely to comparison shop and browse the Web, often saving as much as 50% on branded products, per the study.

The study suggests that products that evince status and privilege are less important to newly rich people than quality, craftsmanship and design. "Brands that are seeking exclusivity at a premium price point will need to be anchored in these attributes," says the study.