Photo Credit: Digital Vision/ThinkStockThe Survey Of Wealth And Affluence has been in existence for seven years, and details the nuances of lifestyle and spending patterns of three groups of Americans. It is produced by American Express Publishing, and the Harrison Group, a YouGov company. These researchers have studied The Upper Middle Class, whose annual discretionary incomes range from $100,000 to $149,000, the Core Affluent, those with $150,000 to $450,000, and the Top 1%, those with $450,000 plus in household income.
For this special September study, 625 were selected from these three groups mentioned above: the Upper Middle Class, n=223, the Core Affluent, n=225, the Top 1%, n=177, and data were collected from September 11-19, forecasting certain aspects of holiday gift spending and gift giving. As with much data, the results combined good news with challenging news.
First, according to this survey, affluent households—representing the top 10% of American wage-earning households—will spend $66.29B this year on holiday gift giving, down 3.4% from last year's $68.63B. BUT, The top 10% will account for nearly 29% of the total 2012 holiday spend, an increase of 21.9% this year over 2011. Conversely, the other 90% of households plan to spend 10.9% less this year.
What this means is (moderately) simple: affluent gift purchasing maintains itself within the luxury brands context, as 58% of those surveyed plan to fashion/beauty gifts, 33% plan to give artisanal food/wine gifts and 26% plan to give jewelry or watches. 40% of those surveyed have travel plans this holiday season.
And then there are people who purchase items for themselves in the self-gifting mode. 46% of female respondents said they were extremely or very likely to buy gifts for themselves, while only 27% of men would self-gift. This is not the only discrepancy across genders. The survey showed that while men focus on gifting fashion/apparel and jewelry, the women seek gift cards for a specific vendor.
On a larger scale, however, the good news for high-end retailers is that luxury customers will increase their spending, on the basis of quality and craftsmanship. 2/3 of the top 10% surveyed agreed with the statement: "I am looking to buy special gifts this holiday season that have lasting, enduring value."
Dr. Jim Taylor, VP of The Harrison Group, and a significant interpreter of this market research, says, “When examining the gift giving plans of affluent families, it is clear that they have substantially improved their balance sheets. Eighty percent carry no credit card debt and over 40% have paid off their homes. Despite their dismay over the general economy, the top 10% take pleasure in the private economy of their own household. By focusing on ‘my economy,’ the top 10% are feeling happier and more secure even as the overall economy continues to plod along.”
As shown in the chart above, personal finances are faring better than the issuing facing the nation, overall. There is some improvement in the trend for performance of the national government, the economy and America’s reputation in the world compared with last year, but these measures continue to be more negative than positive.
"The result is that we are seeing a gap in perception in terms of economic risk between the middle class and affluent,” said Dr. Taylor. “While 68% of the Top 1% report they are very happy and 74% feel they are successful in their personal lives, just 47% and 53%, respectively, of the general population feels the same way."