October 2, 2012
In the next six months, the most-affluent consumers in the United States are most likely to spend their money on vacation, electronics and apparel and accessories, according to findings from Ipsos MediaCT’s August Affluent Barometer.
Since affluent consumers are still a little hesitant about spending, marketers need to work harder to get them to buy products and services. Therefore, emotive marketing is necessary for brands.
“We are seeing some of the same kinds of skittishness that we’ve seen over the past few months,” said Steve Kraus, senior vice president, audience measurement group for Ipsos MediaCT, San Francisco. “But, when looking at some of the things relating to luxury, things do seem to be improving.
“We are seeing a lot of experiential luxury, with many affluent consumers saying that they care most about spending time with friends and family,” he said. “You can reach these consumers through hitting the right emotional tone.”
Ipsos MediaCT measures affluent consumers – household income of $100,000 – and ultra-affluent – household income of $250,000 – and asked them a variety of spending habit questions across all industry sectors.
In the numbers
Approximately 28 percent of super-affluent consumers intend to spend more on personal travel and vacations.
Also, about 24 percent of consumers intend to spend on apparel and accessories and 19 percent of them intend to spend more on computers and electronics.
The reason why consumers are spending more on travel is because they prefer experiences rather than physical products, per Mr. Kraus.
Consumers are still somewhat hesitant to spend. About 65 percent of ultra-affluents believe that they will spend about the same amount even if the economy were to get significantly better over the next 12 months.
Meanwhile, about 32 percent say that they will spend more while 4 percent say they will spend less, permitting those conditions.
The upcoming presidential elections are on consumers’ minds, but they do not think that either a Republican or Democratic candidate will have much effect on the economy.
In fact, 56 percent of consumers believe that who wins will not affect whether or not they will feel safer spending more next year.
Likewise, 65 percent of consumers do not think who wins will determine whether or not they will spend or save more next year.
However, 46 percent of consumers do think that they will pay higher taxes if Barack Obama serves another term.
The idea that consumers are spending more on emotional products and services is something that many luxury marketers have been taking note of.
Travel and hospitality, electronics and apparel brands should especially take note.
For example, the Wedding Suite at Nordstrom is looking to engage brides-to-be by partnering with Lover.ly, a new search engine-esque platform that links back to the department store chain’s ecommerce site.
Lover.ly acts as a search engine for wedding components, including shoes, makeup, dresses, invitations and accessories. Partnering with consumers during important decision-making processes will help to keep the department store top-of-mind (see story).
Also, The Peninsula Hotels is emphasizing its service aspects through efforts surrounding Breast Cancer Awareness month in October with corporate-wide and property-specific programs that give consumers a chance to give back.
Since hotel brands are so focused on serving others, it makes sense that they want to be aligned with organizations that seek to serve others (see story).
Indeed, consumers can probably expect to see more emotive marketing as the holidays near.
“Finding the right tone and allowing affluent consumers to be optimistic can help marketers to spend,” Mr. Kraus said. “It’s all about hitting the right emotional hot button, since marketers are reengaging with the luxury marketplace.
“They’re not reengaging in the same kind of conspicuous consumption, but it’s a little more prudent and practical,” he said.
Rachel Lamb, associate reporter on Luxury Daily, New York