We are one month into the new year, and suffice it to say that we have the wind at our backs: we project that luxury spending among the affluent and wealthy will rise 4.7% in 2015, buoyed by their improving financial and personal confidence, their discretionary spending plans, and indicators that are projecting an American economy that’s on the rebound.
The percentage of the affluent and wealthy who are optimistic about their own future is also on the rise. Compared to 2013, the percentage of affluent and wealthy Americans noting improvement in their personal economies increased during each quarter of 2014, reaching 38% in Q3 2014—roughly three times the percentage who said conditions were getting worse.
Additionally, the affluent and wealthy have continued to save at historically high rates – the top 10% saved 24% of their income in 2013 -- helping boost confidence in their ability to protect their families and to weather future storms.
But caution and safety remain watchwords
Nevertheless, against the backdrop of a lingering recessionary mindset, socioeconomic unrest and global conflicts, caution and safety continue to influence affluent households’ key decisions: some 60% of them believe we are still in a recession, and they continue to spend with a heightened level of discretion. According to our research, seven out of ten survey respondents fear that the economic "bubble" might burst, a perception that drives their reservations about how things are going in the U.S.
Amidst an acceleration in the trend separating the Haves from the Have Nots, economic inequality remains top-of-mind, continuing to fuel the Stealth Wealth trend: three in four are concerned about the divide between the top 1% and the 99%, and we expect the affluent and wealthy to continue to engage with products and services in ways that don’t draw attention to themselves.
What to watch for in 2015
With this in mind, we believe that there are three themes that the luxury brand marketer must keep top of mind in 2015, which we will explore over the course of the year through our research and in our conversations with you. These are:
- Path to Purchase. We will concentrate on the evolution in the Path to Purchase in ways that can be standardized across households.
- Family Decision Making: The Power of the Family Parliament. Families increasingly make spending decisions together, with a surprising amount of power possessed by teenagers. We look to further understand The Power of the Family Parliament and how to include the whole family in marketing messages.
- A New Look at the Role of Brands. The power of brands to create loyalty is on the decline as an issue of selection—and they seem to be growing as a signpost of worth. As part of their due diligence, consumers use brands as one criterion in evaluating quality, but no longer as an assumption of quality. With this in mind, we will be taking a deeper look at the role of brands in the purchase decision process.
Once again, thanks so much for your continued support. We look forward to continuing the conversation throughout the year. Keep an eye out for our next issue of AFFLUENThink coming in March, where we’ll be discussing a group of self-nominated affluent digital leaders, who we’ve dubbed the Social Media Mavens. Stay tuned.
If you would like to talk about what it means to become a client of the Survey of Affluence and Wealth and have your brand represented in our program, please email us at firstname.lastname@example.org. We’d be happy to brief you on the merits and costs of participation.