Despite earning more than average Americans, most affluent consumers aren’t shopping in designer boutiques or investing in luxury properties. In fact, most affluent consumers, even those earning $250,000 or more, are relatively thrifty when it comes to their purchasing habits. Although they may have the discretionary income to purchase some luxury items they are not regularly spending on them. Here, we explore how affluent Americans are spending their hard-earned cash and what they look for before they buy.
Where Do Affluent Consumers Spend Their Money?
Affluents do spend more money than non-affluents on most things, but that doesn’t mean that they are spending lavishly or prioritizing high-end retailers—affluents shop in the same stores and buy the same brands as everyone else! Sixty-nine percent of affluents shop at Amazon, 58% shop at Target, and 52% shop at Home Depot. Surprisingly, U.S. shoppers with incomes over $100,000 accounted for 19% of their spending at dollar stores. Although they have more discretionary income to spend, most affluent consumers buy mainstream brands, however, they are intent on finding bargains and getting the value for their dollar.
What Does Luxury Mean to Affluents?
The very definition of luxury has changed. At one time, big-ticket items may have appealed to upper income Americans, but today, luxury is more understated and experiential. Forty-five percent of affluent consumers say they purchase luxury goods less than once a year and another 38% say they purchase luxury items between one and three times annually. Travel has replaced goods as the status symbol of choice among upper-income consumers. For those earning in excess of $100,000, travel accounted for an average of 8% of spending, well ahead of apparel and even groceries.
Affluents Prioritize Quality and Convenience
Acquiring luxury goods may not be a top priority for affluents, but they will spend more for products they perceive as high quality—almost 70% of high earners agreed that it’s worth paying more for them. While quality is important, convenience is also key, with 59% of high worth individuals saying they would pay more for services and products that make their lives easier. Marketers hoping to attract wealthy Americans should focus on quality and convenience, both in their products and customer service.
How to Reach the Affluent Consumer
It’s difficult to find affluent Americans who are not regular users of digital devices—almost 92% own a smartphone, 62% own a tablet, and half say they access the internet more on handheld devices than on a computer. Among users, 52% say they are early adopters or among the first to try new technology; 31% say they like to try new technology, but prefer to research before jumping in. Digital access affords this group ample time online; affluent Millennials spend up to 53 hours per week online while upper-income Gen X’ers spend an average of 45 hours online. Easy access to the internet has changed the way they get information about products and services, with 60% agreeing that they’re doing more shopping online than ever before, most likely due to the convenience of online shopping.
Affluent Consumers Connect on Social Media
More than half of affluent females say their mobile phone connects them to their social world and 40% believe their friendships wouldn’t be as close without a mobile phone. For those marketers considering chat bots as part of your mobile strategy, we have good news! More than 40% of affluent consumers say that texting is just as meaningful to them as a person-to-person conversation. Since 78% of affluent consumers say they used Facebook within the past week, Facebook Messenger may be a smart solution for brands who wish to connect with this consumer.
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Source: eMarketer US Affluents 2017: Looking Beyond the 1%