Today, Affluent Consumers are clearly the only consumers left in the market. For considered-purchase brands, here are insights and tips that can help you encourage the rich to do their patriotic duty and buy more.
The Influence of Affluence
To get America’s economy back up to speed, these wealthy consumers have to restart their spending engines. It’s all about disposable income. The poor never had it and the middle class is growing poorer as the recession lingers. That leaves Affluents as the economy’s only heavy lifters.
Not only do Affluents have great gobs of money to spend as consumers, but it’s these same wealthy consumers that are often business owners or decision makers in the corporate world. Which means from boutiques to boardrooms, they are truly the last big spenders who can stimulate the economy.
The Top 10% account for almost 50% of all consumer spending.
According to The Federal Reserve Board’s research on US households as defined by their net worth, the wealthiest 10% of US households not only account for almost half of all consumer spending, but they also represent one third of America’s GDP.
Affluent Spending Power:
- Total 11.4 million households
- Average annual income of $256,000
- Earn 36% of the total income earned by all American households.
- Have an average net worth of $3.1 million
- Control 70% of the total net worth of all U.S. households
- Average value of their financial assets is $1.3 million
- As a group, the top 10% hold 89% of the value of all publicly traded stock and stock mutual funds in the US
Signs of A Return to Spending
Research across the board is showing some increase in consumer spending now. A recent survey by The American Affluence Research Center predicts the Affluent will return to their “old normal” spending.
In a recent survey of the wealthiest 10% of US households, 80% of the affluent reported they plan to return to pre-recession spending levels.
Given the short memories and proclivity to shop among Americans, the numbers returning to pre-recession spending could be much higher than 80%. Apparently, the “new normal” may not be that new for the true affluent.
5 Ways To Tempt The Affluent – According To The Affluent
At a recent gathering of the Ultra Affluent, I had the opportunity to ask them what prompts them to spend money on big or expensive purchases. I think their ideas are worth their weight in gold:
- Integration: “I am always tempted when a brand I like adds something new to a product I already love. Especially if it saves me time.”
- Innovation: “I’m always interested when an important company brings on a totally new product, technology or experience.”
- Scarcity: “If it is a collectible, a limited edition or one- of-a-kind item, I am more interested and more likely to buy.”
- Elevation: “If there is a new, very, very special choice introduced, I have to try it. I like to be first and set trends.”
- Cause-related: “If purchasing the item will help a cause I care about, I will usually buy. It almost always gets my attention.”
What are you doing to entice your affluent consumers to spend more on luxuries and considered purchases? Are you seeing buying trends you’d like to share?
Research from the American Affluence Research Center helped inform this article. They are a great resource on the wealthiest 10% of US households.
They also offer some important and complimentary content on their website.