October 19, 2012
The top 10 percent of U.S. households in terms of wealth will increase their holiday gift spend 21.9 percent year over year, while the remaining 90 percent will spend approximately 11 percent less, according to a new report from American Express Publishing and Harrison Group.
In all, the top 10 percent will be responsible for approximately 29 percent of the total 2012 holiday spend, which is expected to decease 3.4 percent from $68.63 billion last year. The report also found that the wealthiest U.S. consumers are thinking independently of the uncertain national and international economies, causing them to spend more confidently this quarter.
“This really is a tale of two economies – a private household economy, which has resulted from people protecting themselves from the ravages of the recession, and the national economy which people find fault with, despite their own ability to avoid the problems,” said Jim Taylor, vice chairman of Harrison Group, New York.
“In a private household economy, we find that people become resourceful, self-reliant and careful to the point of buying things they need rather than things they simply want,” he said. “The result is that their personal balance sheets are in great shape.
“They look at the behavior of the government and the wild swings in the value of stocks, investments and the general behavior of the whole economy and are angry about that, but take pride in their own personal economy.”
The 2012 Survey of Affluence and Wealth in America polled 625 wealthy and affluent U.S. households. American Express Publishing and Harrison Group collected the data Sept. 11-19.
To give or to receive?
Affluent consumers in the United States are leaning heavily towards luxury brand products of quality and value in their holiday gift pursuits.
Two-thirds of survey respondents agreed with the statement, “I am looking to buy special gifts this holiday season that have lasting, enduring value.”
The survey uncovered the types of gifts that affluent consumers will purchase.
Fifty-eight percent of respondents will purchase gifts in the fashion or beauty categories.
Thirty-three percent are shopping for gourmet gifts that include fine wines, spirits or artisan foods.
Twenty-six percent plan to purchase jewelry or watches.
Additionally, 40 percent of respondents will travel this holiday season. In fact, 41 percent booked a trip and 59 percent are in the planning stage.
The Survey of Affluence and Wealth in America also revealed spending differences between wealthy males and females.
Thirty-nine percent of the top 1 percent of the U.S. population will purchase big-ticket gifts for a significant other.
However, gifts purchased by affluent consumers are not just those to be given. Forty-six percent of women respondents are “extremely likely” or “very likely” to buy gifts for themselves, and 27 percent of men will do the same.
Women will purchases items for themselves in categories such as apparel and fashion, accessories, jewelry, home furnishings, fine fragrances and cosmetics and spa treatments.
Men who purchase their own gifts will buy in categories including fine liquors and spirits, gourmet foods, fine wines, sporting goods and equipment and technology.
Differences in the gifts that both genders prefer versus the gifts that they receive have carried over from the 2011 survey.
Women would like to receive gift cards for a specific restaurant or retailer, but men are purchasing gifts for them in the apparel and fashion and jewelry categories.
Men would also like to receive gift cards, but women purchase items in categories including apparel and fashion, travel or vacation experience and books.
The survey also asked affluent consumers where they will shop and 18 percent said that they will increase the amount of shopping done online in comparison to last year.
Thirty-eight percent will do more gift shopping online versus in-store while 32 percent will do more shopping in-store.
Twenty-five percent will evenly distribute their shopping between online and in-store.
Affluent consumers are noting the differences between online and in-store shopping. There are benefits of each channel that are not as accessible on the other.
Fifty percent of respondents said that they will shop in-store because the customer service is better.
Fifty-one percent will shop in-store for help choosing a product.
Sixty-three percent will shop in-store because the return and exchange process is easier.
In terms of the online experience, 70 percent of respondents will shop online because it is more convenient.
Sixty-four percent will shop online because there is an increase in product availability on the channel.
Sixty-six percent believe that they can get the best price online.
“The average family will spend $627 on gifts, which is down about $50, but the top 1 percent will spend six-times their proportional value,” Mr. Taylor said.
“This is a great opportunity for sales,” he said. “The economy is dominated by individuals operating on self-interest.”
Tricia Carr, editorial assistant on Luxury Daily, New York