Affluent Consumers: Demographic Patterns and Spending Trends, 7th Edition

Published: October 6, 2017 - 137 Pages

Table of Contents

  • Executive Summary
    • Scope and Methodology
      • Scope of the Report
      • Methodology
    • Topline Insights
      • Affluent Consumer Population Explodes in Post-Recession Bounce
      • Affluent Consumer Confidence Roars Back from Recession Low
      • The Middle Class Continues to Tread Water
      • Affluent Households Gain at the Expense of Everyone Else
      • Some of the Affluent Try to Avoid the Stigma of Wealth in an Age of Inequality
      • Inconspicuous Consumption Gains Favor
      • Many Affluent Consumers Like to Search for Value and Snap Up Bargains
      • Being Rich Means Having Enough Money to Buy Time
      • Affluent Consumers Demand Products and Services Designed Just for Them
      • The Affluent Shift From Piling Up Possessions to Buying Experiences
      • Ultra-Rich Still Cherish Brands That Others Can't Possibly Afford (or Dare) to Buy
      • Affluent Consumer Market Represents Outsize Opportunity
      • As Income Grows, Demand for Professional Financial Advice Increases
      • Affluent Multicultural Households Represent Growing Opportunity
    • Personal Profile of Affluent Consumers
      • Affluent Consumers Are More Likely to Be Young, Urban or Coastal
      • 3 in 10 Have Graduate Degree
      • Employment Profile in Sync with Educational Achievement
      • Most Affluent Households Have Multiple Earners
      • Married-Couple Family Households Predominate
      • Homeownership Key Marker of Affluence
      • Super-Affluent Differ in Some Ways From the Merely Affluent
      • Affluent More Likely to Have Liberal Political Outlook and Secular Social Values
    • Consumer Profile
      • Affluent Shoppers Tied to the Internet
      • Travel Services at Top of List of Online Purchases
      • Affluent Like to Save Money Too
      • Brick-and-Mortar Shopping Still Appeals
      • Shopping Patterns Reflect Two-Tier Economy
      • Affluent Shoppers Tethered to Internet Even While Shopping in Stores
      • Affluent Households Have Outsize Impact on Consumer Economy
      • Affluent Consumers Look for Quality When They Buy Apparel
    • Financial Profile of Affluent Consumers
      • Nearly 40% of Income of Wealthiest Americans Comes from Investments
      • A Handful of Households Controls a Substantial Majority of Household Financial Assets in U.S.
      • Wealthiest Families Prosper in Spite of Market Dips
      • Richest Households Depend Less on Retirement Accounts
      • Super-Affluent Investors Display Greater Tolerance for Risk
      • Super-Wealthy Investors Play in a Their Own League
      • High-Value Life Insurance Part of Affluent Consumers' Financial Planning
      • Loans Part of Affluent Lifestyle
    • Marketing to Affluent Consumers
      • Luxury Retailers Scale Back Brick-and-Mortar Presence
      • Luxury Retailers Forced to Raise Online Profile
      • Many Luxury Brands Learn How to Map a Digital Future
  • Trends and Opportunities
    • Market Trends
      • Dominance of Affluent Consumers Decades in the Making
      • Wealthiest Control Three-Fourths of Family-Owned Assets
      • Affluent Households Multiply in Post-Recession Bounce
        • Table Household Growth, Affluent vs. Other Households, 2010-2016 (in thousands)
      • Affluent Consumer Population Tops 14 Million
        • Table Population Growth, Affluent vs. Other Consumers, 2010-2016 (in thousands)
      • Affluent Still Grab Greater Share of Aggregate Income
        • Table Growth in Mean Household Income, Top 5% vs. Other Households, 2010-2016
        • Table Amount and Percent of Aggregate Household Income, Affluent vs. Other Households, 2010 vs. 2016 (in million $)
        • Table Growth in Aggregate Household Income, Affluent vs. Other Households, 2010-2016 (in million $)
      • Affluent Consumer Population Explodes as Middle Class Hollows Out
      • Even Upper Middle Class Households Squeezed by More Affluent Counterparts
        • Table Average Household Income, Top 5% vs. Other Households in Top 20%, 2010-2016
      • Ultra High Net Worth Americans Number in the Tens of Thousands
    • Key Market Opportunities
      • Affluent Consumer Confidence Roars Back from Recession Low
      • Affluent Consumers Represent Outsize Opportunity
        • Table Highlights of Consumer Expenditures by Affluent Households, 2016 (in billion $)
      • Attachment to Online Shopping Illustrates Payoff From Digital Strategies
        • Table Impact of the Internet on Consumer Behavior, Affluent Consumers vs. All Adults, 2016
      • Spending Patterns Reveal Importance of Affluent Consumers to Brick-and-Mortar Retailers
        • Table Highlights of Shopping and Spending Patterns, Affluent Consumers vs. All Adults, 2016
      • Travel Habits Set Affluent Consumers Apart
        • Table Attitudes Toward Travel, Affluent Consumers vs. All Adults, 2016
      • High Income Increases Demand for Professional Financial Advice
      • Affluent Consumers Are Prime Customers for Loans as Well as Other Financial Services
        • Table Highlights of Use of Financial Services, Affluent Consumers vs. All Adults, 2016
      • Affluent Multicultural Households Represent Growing Opportunity
        • Table Growth in Number of Affluent Households by Race and Hispanic Origin, 2010-2016 (in thousands)
  • Personal Profile of Affluent Consumers
    • Demographic Highlights
      • Affluent Consumers Are More Likely to Be Young, Urban or Coastal
      • Asians Overrepresented in Affluent Consumer Population
      • 3 in 10 Have Graduate Degree
      • Employment Profile in Sync with Educational Achievement
        • Table Employment Profile, Affluent Consumers vs. All Adults, 2016
      • Most Affluent Households Have Multiple Earners
      • Married-Couple Family Households Predominate
        • Table Household Structure, Affluent vs. All Households, 2015
      • Homeownership Key Marker of Affluence
      • Super-Affluent Differ in Some Ways From the Merely Affluent
    • Political and Social Values
      • Affluent More Likely to Be Politically Active and Have Liberal Political Outlook
      • Secular Social Values More Prominent Among Affluent
  • Consumer Profile
    • Highlights of Consumer Attitudes and Behavior
      • Affluent Shoppers Tied to the Internet
      • Travel Services at Top of List of Online Purchases
        • Table Items Most Likely to Be Ordered Online in Last Three Months, Affluent Consumers vs. All Adults, 2016
      • Affluent Are Prime Candidates for Online Home Delivery Subscriptions
      • Affluent Like to Save Money Too
      • Brick-and-Mortar Shopping Still Appeals
        • Table Type of Brick-and-Mortar Retail Outlets Recently Shopped, Affluent Consumers vs. All Adults, 2016
      • Shopping Patterns Reflect Two-Tier Economy
        • Table Selected Retail Outlets More or Less Likely to Be Shopped At in Last Three Months, Affluent Consumers vs. All Adults, 2016
      • Affluent Shoppers Tethered to Internet Even While Shopping in Stores
    • Overview of Spending Patterns
      • Affluent Households Have Outsize Impact on Consumer Economy
        • Table Aggregate Consumer Expenditures, Affluent vs. All Households, 2016
      • Affluent Have Different Spending Priorities
        • Table Key Differences in Spending Priorities by Expenditure Category, Affluent vs. All Households, 2016
      • Affluent Consumers Look for Quality When They Buy Apparel
        • Table Aggregate Spending on Apparel and Services by Category of Expenditure, Affluent vs. All Households,2016 (in million $)
      • New, Luxury Vehicles Capture the Attention of Affluent Consumers
        • Table Aggregate Spending on New and Used Cars and Trucks, Affluent vs. All Households, 2016 (in million $)
      • Affluent Responsible for Nearly One in Five Dollars Spent on Mortgage Interest
        • Table Aggregate Spending on Selected Housing Expenses, Affluent vs. All Households, 2016 (in million $)
      • Affluent Households Spend $39 Billion Annually on Household Furnishings and Equipment
        • Table Aggregate Spending on Household Furnishings and Equipment by Category of Expenditure, Affluent vs. All Households, 2016 (in million $)
      • Entertainment and Sporting Goods Industries Depend on Affluent Consumers
        • Table Aggregate Spending on Entertainment by Category of Expenditure, Affluent vs. All Households, 2016 (in million $)
  • Financial Profile of Affluent Consumers
    • Profile of Affluent Investors
      • Investing Central to Affluent Consumer Identity
        • Table Ownership of Investments by Type of Investment, Affluent vs. Other Households with Investments, 2016
      • Nearly 40% of Income of Wealthiest Americans Comes from Investments
      • A Handful of Households Controls a Substantial Majority of Household Financial Assets in U.S.
        • Table Distribution of Overall Asset Holdings by Household Income
        • Table Distribution of Overall Asset Holdings by Top 1% and 5% of Households
      • Wealthiest Families Prosper in Spite of Market Dips
      • Richest Households Depend Less on Retirement Accounts
        • Table Distribution of Asset Holdings, Highest-Income vs. All Other Households (in billion $)
        • Table Distribution of Asset Holdings, Top 5% and 1% of Households vs. All Other Households (in billion $)
      • Super-Affluent Investors Display Greater Tolerance for Risk
        • Table Distribution of Asset Holdings Other Than IRAs and Defined Contribution Plans, Highest-Income vs. All Other Households
        • Table Distribution of Asset Holdings Other Than IRAs and Defined Contribution Plans, Top 5% and 1% vs. All Other Households
      • Super-Wealthy Investors Play in a Their Own League
    • Use of Financial Services
      • Reliance on Professional Financial Advisors Increases with Income
        • Table Household Sources of Financial Advice by Income Level
      • Amex Scores with Affluent Consumers
        • Table Ownership of Credit and Debit/ATM Cards, Affluent Consumers vs. All Adults, 2016
      • Affluent Consumers Place High Value on Having Good Insurance Coverage
      • High-Value Life Insurance Part of Affluent Consumers' Financial Planning
        • Table Type of Life Insurance Carried, Affluent Consumers vs. All Adults, 2016
      • Affluent Consumers Are Prime Customers for Wide Range of Insurance
        • Table Other Insurance Carried by Type of Insurance, Affluent Consumers vs. All Adults, 2016
      • Loans Part of Affluent Lifestyle
        • Table Type of Loans Have, Affluent vs. All Households, 2016
  • Marketing to Affluent Consumers
    • Overview
      • Luxury Retailers Scale Back Brick-and-Mortar Presence
      • Luxury Retailers Forced to Raise Online Profile
      • Many Luxury Brands Learn How to Map a Digital Future
      • Luxury Shopping Experiences Can Still Attract the Ultra-Rich
      • Personalization and Customization Key to Reaching Luxury Buyers
      • Luxury Marketers Focus on Providing an Experience Rather than Selling a Product
      • Being Rich Enough to Buy Time Seen as the Latest Status Symbol
      • The Ultra-Rich Still Cherish Brands That Others Can't Possibly Afford (or Dare) to Buy
    • Case Studies of Marketing to the Affluent Consumer
      • Bentley Motors Takes Personalization to New Levels
      • Tiffany & Co. Highlights Commitment to Sustainability
      • Neiman Marcus Seeks to Improve Customer Experience through Technology
      • Luis Vuitton's Ad Campaigns Features Famous Faces
      • Burberry Turns to Social Media to Launch Cosmetics Product
  • Appendix
    • Post-Recession Trends
      • Table Population Growth, Affluent vs. Other Consumers, 2010-2016 (in thousands)
      • Table Household Growth, Affluent vs. Other Households, 2010-2016 (in thousands)
      • Table Growth in Use of Financial Services, Affluent vs. Other Consumers, 2010-2016 (in thousands)
      • Table Growth in Selected Travel Activities in Last Three Years, Affluent vs. Other Households, 2010-2016 (in thousands)
      • Table Change in Home Remodeling Activities, Affluent vs. Other Households, 2010-2016 (in thousands)
      • Table Change in Purchase of Big-Ticket Items, Affluent vs. Other Households, 2010-2016 (in thousands)
    • Personal Profile of Affluent Consumers
      • Table Demographic Profile, Affluent vs. All Consumers, 2016
      • Table Demographic Profile of Affluent Consumers: Household Income of $500,000 or More vs. Household Income of $250,000-$499,999, 2016
      • Table Social Values, Affluent vs. Other Consumers, 2016
      • Table Political Profile, Affluent vs. Other Consumers, 2016
      • Table Memberships and Leisure Activities, Affluent vs. All Consumers, 2016
      • Table Participation in Physical Fitness/Exercise Programs, Affluent vs. Other Consumers, 2016
      • Table Attitudes Toward Career, Affluent vs. All Consumers, 2016
    • Use of Financial Services
      • Table Attitudes Toward Personal Finances, Affluent vs. All Consumers, 2016
      • Table Indicators of Financial Confidence, Affluent vs. All Consumers, 2016
      • Table Ownership and Use of Credit and Debit Cards, Affluent vs. All Consumers, 2016
      • Table Ownership of Financial Accounts, Affluent vs. All Consumers, 2016
      • Table Type of Loans Have, Affluent vs. All Consumers, 2016
      • Table Type and Value of Life Insurance Carried, Affluent vs. All Consumers, 2016
      • Table Type of Other Insurance Carried, Affluent vs. All Consumers, 2016
    • Consumer Attitudes and Behavior
      • Table Spending and Buying Patterns, Affluent vs. All Consumers, 2016
      • Table Consumers as Influencers, Affluent vs. All Consumers, 2016
      • Table Attitudes Toward Technology and the Internet, Affluent vs. All Consumers, 2016
      • Table Impact of the Internet on Media Consumption, Affluent vs. All Consumers, 2016
      • Table Attitudes Toward Food, Affluent vs. All Consumers, 2016
      • Table Attitudes Toward Fashion, Affluent vs. All Consumers, 2016
      • Table Attitudes Toward Automobiles, Affluent vs. All Consumers, 2016
      • Table Attitudes Toward Travel, Affluent vs. All Consumers, 2016

Abstract

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Affluent Consumers: Demographic Patterns and Spending Trends, 7th Edition

Affluent consumers have enjoyed a post-recession bounce far greater than that experienced by their lower-income counterparts. Between 2010 and 2016, the aggregate income of affluent households more than doubled, while aggregate income attributable to all other households was up just 19%. 

This new Packaged Facts report, Affluent Consumers: Demographic Patterns and Spending Trends, 7th Edition, highlights cross-currents in the affluent consumer market in an era marked by this widening gulf between the affluent and everyone else.

Affluent Consumers Prioritize Customized Products, Services

Some affluent consumers cope with the psychological baggage of being wealthy in an increasingly winner-take-all economy by declining to think of themselves, or to project themselves, as being affluent or wealthy at all. Such evolving mindsets among affluent consumers comes are reflected in changes in how they prefer to spend their money. For an increasing number of affluent Americans, the endless and conspicuous accumulation of possessions has become less important than financial access to meaningful experiences such as purposeful or at least truly exotic travel. In another shift, more and more upper-income consumers would rather achieve status by promoting the right kind of social values, as opposed to purchasing products and services that reflect a material world mindset. 

Another kind of status now sought after by affluent consumers comes is the ability to buy time, a transaction increasingly seen as the ultimate luxury purchase. Marketers are focusing on how to provide unique services to their affluent customers that provide the kind of convenience, time savings, and outsourcing of mundane tasks and concerns that ordinary consumers can’t afford. Customized, personalized products and services also rank high on the priority list of affluent consumers. 

While opportunities for the pursuit of excess still abound, especially for the ultra-rich, many affluent shoppers remain intent on searching for value and hunting for bargains. For example, data cited in this report show that affluent households are actually more likely than households on average to respond to money-saving incentive offers (58% vs. 46%), especially those offering a rebate with product purchase (54% vs. 38%). 

Report Scope & Methodology

Affluent Consumers: Demographic Patterns and Spending Trends, 7th Edition focuses on the affluent consumer market defined as adults with a household income of $250,000 or more, and also looks at consumers with a household income of $500,000 or more. 

U.S. Government data sources include U.S. Census Bureau household income data based on the Current Population Survey and data compiled by the Consumer Expenditure Survey of the Bureau of Labor Statistics. The report also incorporates an analysis of the latest available data from the Federal Reserve Survey of Consumer Finances that was included in a January 2016 U.S. Department of Labor-sponsored report. 

A primary source of consumer data in this report is the Simmons national consumer survey for Winter 2016-17, which was fielded between January 2016 and February 2017. For trend analysis of affluent consumers in the post-recession U.S. economy, the report uses as a baseline the Winter 2009-2010 Simmons survey. On an ongoing basis, Simmons conducts booklet-based surveys of a large and random sample of consumers (approximately 25,000 for each 12-month survey compilation) who in aggregate represent a statistically accurate cross-section of the U.S. population. 

In addition, this report cites a number of studies of affluent consumers and the luxury market sponsored by private consulting firms, including Bain & Company, Boston Consulting Group, Deloitte, Knight Frank and Wealth-X. The report is also based upon data collected from a range of other industry sources, including company websites, trade publications, business newspapers and magazines and consumer blogs.


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