This is an article from Mobile Commerce Daily by Rachel Lamb (http://www.mobilecommercedaily.com/2011/05/20/61pc-of-wealthiest-americans-own-smartphones-study). The article references the AARC Spring 2011 survey results regarding use of smartphones among affluent Americans.

May 20, 2011
By Rachel Lamb

Approximately 61 percent of the 22 million wealthiest individuals in the United States own a smartphone, indicating a potentially untapped market for about 8 million smartphones, or 39 percent of the affluent, according to a recent study by American Affluence Research Center.

According to the data, 22 percent of those surveyed own a tablet, meaning that there is a probable untapped market 78 percent of the affluent. The study was able to dissect the ages and demographics of individuals, along with types of devices.

“There is so much talk about pervasiveness of mobile devices, but it’s important to understand who has these devices and how they are using them in order for people to market effectively through them,” said Ron Kurtz, principal of American Affluence Research Center, Atlanta. “It’s interesting that affluent have a smartphone or tablet, so clearly this is a medium in a way to reach people.

“It’s important to know what platform [marketers] need to be communicating through to be convenient and easy to access a brand’s information, and to receive or use an app,” he said.

Participants in the survey have an annual household income of $333,000 and an average primary residence value of $1.2 million. Their net worth is, on average, $3.1 million with investable assets of $1.8 million.

These are the top 10 percent of the wealthiest individuals in the U.S.

Dissecting the affluent

In addition to 61 percent of individuals who actually own a tablet or smartphone, it is said that about 65 percent of the affluent at least have access to smartphones or tablets.

The survey broke down the participants into demographics and type of mobile device used.

For instance, 84 percent of affluent individuals under 50 own a smartphone, whereas only 38 percent of those 60 and up own one.

The study also showed a correlation between income and type of smartphone.

Individuals who earn more than $200,000 per year are almost twice as likely to own a smartphone and have a slight preference for the BlackBerry.

Moreover, those with a slightly lower income, less than $200,000 per year, favor the iPhone.

The study did not see much difference in gender pertaining to preference and ownership of tablets, but four out of five individuals favored the iPad as their chosen tablet.

Predictably, younger individuals are more likely to own tablets and smartphones. Also, the increased likelihood to own a smartphone or tablet has a direct relationship with net worth and income.

Moving forward

Many luxury brands are reluctant to move their marketing into the tablet or smartphone sphere.

However, since 61 percent of the most affluent individuals in America have a smartphone, it seems like brands should be rethinking their strategy.

Some brands, even the most prestigious, are learning.

For instance, French fashion house Chanel is taking one giant leap for iconic luxury brands with the launch of two mobile-optimized sites for its fine jewelry and watch collections (see story).

Still, many luxury brands are beginning to understand the power of mobile applications, mobile-optimized sites and SMS messaging.

These are all ways that luxury brands can use smartphones and tablets to get in touch with their customer base, move products and build loyalty and relationships.

“The smartphone and tablet users are still younger users, which aren’t the absolute key demographic for luxury brands, but it’s a start,” Mr. Kurtz said. “Clearly, it is a channel to which the affluent are connected, though certainly a younger segment.

“Brands need to take this information into consideration and what they’re going to be offering and saying, how they’re going to be saying it and how much they’re going to be spending on these channels and on [mobile],” he said.

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May, 2011 – This Luxury Daily article discusses the affluent clicking through to retailers’ websites from Twitter and Facebook (http://www.luxurydaily.com/67pc-twitter-users-click-through-tweets-to-branded-web-sites-study/).

By Rachel Lamb

Approximately 67 percent of Twitter users click through a Tweet that leads to a branded Web site, while 56 percent of Facebook users go on to a branded Web site because of a Facebook post, according to a study from comScore, Shop.org and Social Shopping Labs that measured shopping habits influenced by social media.

Shop.org, a division of the National Retail Federation, polled approximately 1,787 adult online shoppers in April 2011 on shopping directly influenced by social media. The research showed that shoppers are willing to interact with retailers through a myriad of social networks, leaving it up to retailers to use this to their advantage.

NRF was not available to comment for this story.

Social shopping
Many luxury brands have Facebook and Twitter sites that are used to foster CRM and help to push promotions and products.

Approximately 42 percent of online consumers “follow” retailers via Facebook, Twitter or a blog. The average person follows six retailers, per the study.

Additionally, 58 percent follow companies to find deals, 49 percent want to keep up-to-date on products and 39 percent follow retailers for information on contests and events.

Indeed, brands such as Marc Jacobs, Bergdorf Goodman, Saks Fifth Avenue, Bloomingdale’s and Diane von Furstenberg often use Twitter to push products, post information and promote contests and events (see story).

More than half of Facebook users click through to a retailer’s Web site because of a Facebook post and even more Twitter users attribute a branded Tweet to the reason to click through to a Web site.

Furthermore, a little more than one-third of shoppers say that they are likely to directly purchase from Facebook, while 32 percent of Twitter users agree.

Social through mobile
The amount of shoppers using mobile commerce through social media is also growing.

For instance, 42 percent of Twitter users access the site on their mobile phone at least once a day, as do 34 percent of Facebook users.

This could probably lead to transactions via mobile.

The study also found that approximately 32 percent of people view YouTube clips from their smartphones.

Nearly half of the consumers surveyed have accessed customer reviews via mobile when deciding whether to make a purchase in-store.

Fifty-five percent of men are more likely to access reviews via mobile, compared to only 39 percent of women.

Group-buying sites such as Gilt City, Groupon and LivingSocial are known to approximately 82 percent of online consumers, and 57 percent have spent over $100 through these sites.

Social media is proving to be one of the most beneficial ways for luxury brands to become noticed and to move product.

Although the majority of a luxury brand’s target audience may not be on social media, the channel still serves to connect younger consumers with the brands as well as build brand awareness.

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May, 2011 – This Luxury Daily article discusses the affluent market’s use of smartphones and tablets (http://www.luxurydaily.com/61pc-of-us-affluent-own-smartphones-study/).

By Rachel Lamb

Approximately 61 percent of the 22 million wealthiest individuals in the United States own a smartphone, indicating a potentially untapped market for about 8 million smartphones, or 39 percent of the affluent, according to a recent study by American Affluence Research Center.

According to the data, 22 percent of those surveyed own a tablet, meaning that there is a probable untapped market 78 percent of the affluent. The study was able to dissect the ages and demographics of individuals, along with types of devices.

“There is so much talk about pervasiveness of mobile devices, but it’s important to understand who has these devices and how they are using them in order for people to market effectively through them,” said Ron Kurtz, principal of American Affluence Research Center, Atlanta. “It’s interesting that affluent have a smartphone or tablet, so clearly this is a medium in a way to reach people.

“It’s important to know what platform [marketers] need to be communicating through to be convenient and easy to access a brand’s information, and to receive or use an app,” he said.

Participants in the survey have an annual household income of $333,000 and an average primary residence value of $1.2 million. Their net worth is, on average, $3.1 million with investable assets of $1.8 million.

These are the top 10 percent of the wealthiest individuals in the U.S.

Dissecting the affluent
In addition to 61 percent of individuals who actually own a tablet or smartphone, it is said that about 65 percent of the affluent at least have access to smartphones or tablets.

The survey broke down the participants into demographics and type of mobile device used.

For instance, 84 percent of affluent individuals under 50 own a smartphone, whereas only 38 percent of those 60 and up own one.

The study also showed a correlation between income and type of smartphone.

Individuals who earn more than $200,000 per year are almost twice as likely to own a smartphone and have a slight preference for the BlackBerry.

Moreover, those with a slightly lower income, less than $200,000 per year, favor the iPhone.

The study did not see much difference in gender pertaining to preference and ownership of tablets, but four out of five individuals favored the iPad as their chosen tablet.

Predictably, younger individuals are more likely to own tablets and smartphones. Also, the increased likelihood to own a smartphone or tablet has a direct relationship with net worth and income.

Moving forward
Many luxury brands are reluctant to move their marketing into the tablet or smartphone sphere.

However, since 61 percent of the most affluent individuals in America have a smartphone, it seems like brands should be rethinking their strategy.

Some brands, even the most prestigious, are learning.

For instance, French fashion house Chanel is taking one giant leap for iconic luxury brands with the launch of two mobile-optimized sites for its fine jewelry and watch collections (see story).

Still, many luxury brands are beginning to understand the power of mobile applications, mobile-optimized sites and SMS messaging.

These are all ways that luxury brands can use smartphones and tablets to get in touch with their customer base, move products and build loyalty and relationships.

“The smartphone and tablet users are still younger users, which aren’t the absolute key demographic for luxury brands, but it’s a start,” Mr. Kurtz said. “Clearly, it is a channel to which the affluent are connected, though certainly a younger segment.

“Brands need to take this information into consideration and what they’re going to be offering and saying, how they’re going to be saying it and how much they’re going to be spending on these channels and on [mobile],” he said.

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About 65% of the affluent have access to one or more smart phones or tablets and another 34% have regular access to a computer according to a new Spring 2011 survey of the wealthiest 10% of US households by the American Affluence Research Center. Only 1% of the affluent lack access to the internet.

On average, 61% of the affluent own a smart phone and 22% own a tablet. With a population of about 22 million individuals in the 11.4 million households of the affluent, there is a potential untapped market for about 8 million smart phones (39% of the affluent) and 17 million tablets (78%).

The incidence of ownership of a smart phone, and the type of phone, can vary substantially within the age, income, and net worth groupings. For example, 84% of the under 50 age group own a smart phone versus only 38% of the 60+ age group. Those with $200K+ income are almost twice as likely to own a smart phone (73% versus 40%) as those with less than $200K income, and they have a slight preference for the Blackberry whereas the lower income group favors the iPhone.

There are minimal differences by gender for ownership and brand preferences of smart phones and tablets. Ownership of tablets and both tablets and smart phones increases as age declines and as income and net worth increase. The iPad is favored by a margin of 4 or 5 to one over other tablets.

About 18% of the affluent in the new Spring 2011 survey, the 19th in a continuing series of twice-yearly tracking studies by the American Affluence Research Center, own both a smart phone and tablet. Ownership of both is highest among those under age 50 (32%), those with income of $250K+ (25%), and those with a net worth of $6M+ (37%).

Half (50%) of the affluent with a mobile device and/or computer participate in one of more of the types of social media. On average, they participate in about 1.5 types of the social media listed. Participation in social media declines as age and net worth increase. Men participate a bit less than women because they are much less likely to participate in Facebook (33% versus 49%). LinkedIn is somewhat more popular among those age 50 to 59 and those with a $200K+ income.

As might be expected, owners of both smart phones and tablets are most likely (70%) to participate in some form of social media. On average they participate in 1.8 types of social media. Those with access to only a computer are least likely (69%) to participate in some form of social media.

Participants in the American Affluence Research Center Spring 2011 survey have an average annual household income of $333,000, an average primary residence value of $1.2 million, an average net worth of $3.1 million, and average investable assets of $1.8 million.

A description of the survey methodology and other detailed highlights of the survey can be viewed at:
http://affluenceresearch.org/most-recent-tracking-study/highlights-of-most-recent-survey/

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May, 2011 – This Luxury Daily article discusses AARC research about affluent cutomer’s use of mobile devices to make purchases (http://www.luxurydaily.com/recent-flash-sale-mobile-sales-increase-could-signal-luxury-mcommerce-boom/).

By Rachel Lamb

Online retailers Gilt Groupe and Rue La La have announced a significant jump of sales through mobile, which could be indicative of a future explosion in luxury mobile commerce.

Although these sites’ designer apparel is considerably reduced for the purpose of flash sales, this probably does not mean that luxury customers are getting used to sales discounts. However, some experts think that customers will start getting comfortable with mobile commerce.

“I doubt consumers are becoming too comfortable with discounted luxury goods,” said Ron Kurtz, president of American Affluence Research Center, Atlanta. “Our recent survey of the affluent showed that not any flash-sale sites – including Gilt Groupe and Rue La La, which are the two best established – had more than 10 percent awareness among the wealthiest 10 percent of U.S. households.

“I would expect that, over time, mobile devices will become a larger percentage of sales for at least two reasons,” he said. “More people will be using the devices and businesses will be improving the experience of shopping on a mobile device.”

Mr. Kurtz is not affiliated with Rue La La and agreed to comment as a third-party expert.

Flash in the pan
Gilt Groupe, a seller of brands such as Cynthia Rowley, Valentino and Rafe, has said that it gets approximately 15 percent of its weekly revenue from mobile (see story).

Gilt has developed six mobile apps, and has 1.3 million downloads from just one of its apps, Gilt on the Go, available on iPhone, iPad and Android mobile devices.

Competitor flash-sale site Rue La La has just reported that approximately 12 percent of its first-quarter 2011 sales were made from Rue La La’s mobile commerce-enabled site and apps.

Luxury consumers are most likely to have the latest and most expensive smartphones, whose data plans and Internet enable the download of mobile apps and support optimized sites.

Moreover, most individuals constantly carry their smartphones with them and apps like those developed by Gilt Groupe and Rue La La make it easy for affluent consumers to buy luxury goods on-the-go.

This is supported by a new study from InMobi reveals that mobile Internet users would rather shop using a mobile device than a personal computer or laptop (see story).

Too reliant?
While this bodes well for luxury retailers such as Gilt Groupe and Rue La La, does it mean that mobile customers are relying more on flash-sale sites, rather than actual luxury brands and retailers?

“I do not expect the percentage of such sales for true luxury products to be as high as the percentage for businesses such as Rue La La, which I feel are supported more by younger and more aspirational consumers,” Mr. Kurtz said.

The belief is that most luxury consumers, the truly affluent, do not need discounted prices on luxury goods and therefore may not even be aware that these sites exist.

This means that the business of an upscale’s main target, the already-affluent, will not be taking business away from the brands by using flash-sale sites.

More than half of affluent and luxury consumers are aware of discounted sites such as Zappos, while none of the 11 listed flash-sale sites have more than 10 percent awareness, according to a sweep by American Affluence Research Center that surveyed the top 10 percent of the U.S.’s most wealthy individuals.

Furthermore, one-third of the affluent consumers have visited Zappos in the past 90 days while 5 percent or less have visited any of the flash-sale sites during that time.

And still, a third of the affluent and luxury consumers have ever made a purchase at Zappos, while less than 4 percent have ever made a purchase at any of the individual flash-sale sites.

“Our recent survey showed that 65 percent of the affluent have one or more mobile devices,” Mr. Kurtz said. “That percentage will continue to grow for at least the next two or three years.

“As businesses make it easier for people to shop on a mobile device, there will be growth in the sales of all types of products and services, including the luxury sector,” he said.

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About 58% of the affluent indicated they are aware of at least one of the 12 sites listed in a new Spring 2011 survey of the wealthiest 10% of US households by the American Affluence Research Center. Those aware of any of the sites are aware of an average of 2.7 sites.

In the new Spring 2011 survey, the 19th in a continuing series of twice-yearly tracking studies by the American Affluence Research Center, awareness of at least one site increases as age declines and income increases. Women are more aware of at least one site, while the differences within the net worth group are minimal. Awareness of at least one site is much higher among those who own a smart phone and/or tablet than among those who only have access to a computer.

Zappos, which has a different business model and has been in business for about 12 years, is known by 54% of the respondents. It was included in the list to provide a point of comparison with the various “flash sale” sites. About 10% are aware of Gilt, and all other sites listed have less than 10% awareness. Among those aware of at least one site, over 90% are aware of Zappos. Gilt ranks second in awareness among the different groups. The relative awareness of certain sites varies by age, gender, and levels of wealth. For example, Gilt has a 24% share among those under age 50 and only a 12% share among those age 60+.

On average, about 40% of the affluent had visited at least one of the 12 listed sites at least once during the prior 90 days. There was a greater likelihood of having visited one of the sites as age declined, among women, and among those with $200K+ income. Women were more than twice as likely as men, and those under age 50 were more than twice as likely as those age 60+, to have visited one of the sites during the past 90 days.

Zappos was the site most likely to be visited, with a share ranging from 58% (among those with $6M+ net worth) to the high 80s among several segments. Gilt had the second strongest share overall, typically below 10% but as high as 25% of the $6M+ net worth group. As an average share, Zappos had 81% and Gilt had 13%.

The owners of mobile devices (smart phones and/or tablets) are more likely to have visited one of the “flash sale” sites during the past 90 days than those with access to only computers (36%). Those with both tablets and smart phones were most likely to have visited one of the sites (55%).

Zappos was highly favored over all the other sites among the owners of all the various devices. Its share was lowest among tablet owners (63%) and highest among those who have access only to a computer (87%). Gilt had the second highest share and was strongest among those with a tablet (about 22%).

About 39% of the affluent have ever made a purchase from one of the sites listed. On average, they have purchased from 1.2 sites. The incidence of at least one purchase increases as age declines and income increases. Women are more likely to have made a purchase by a margin of two to one over men.

About 87% of those who have made a purchase did so from Zappos. Gilt ranks second in purchase incidence among all groups, with the exception of those age 60+ and those in the lowest and highest net worth groupings. RueLaLa is a close third.
Participants in the American Affluence Research Center Spring 2011 survey have an average annual household income of $333,000, an average primary residence value of $1.2 million, an average net worth of $3.1 million, and average investable assets of $1.8 million.

A description of the survey methodology and other detailed highlights of the survey can be viewed at: http://affluenceresearch.org/most-recent-tracking-study/highlights-of-most-recent-survey/

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Only 1% of the affluent lack access to the internet according to a new survey of the wealthiest 10% of US households by the American Affluence Research Center. Roughly one-third of the affluent have access only through a computer, while the remainder own a smart phone or a tablet as well.

In the new Spring 2011 survey, the 19th in a continuing series of twice-yearly tracking studies by the American Affluence Research Center, only half (50%) of the affluent with a mobile device and/or computer participate in one of more of the social media. On average, they participate in about 1.5 types of the social media listed.

Participation in social media declines as age and net worth increase. Men participate a bit less than women because they are much less likely to participate in Facebook (33% versus 49%). LinkedIn is somewhat more popular among those age 50 to 59 and those with a $200K+ income.

As might be expected, owners of both smart phones and tablets are most likely (70%) to participate in some form of social media. On average they participate in 1.8 types of social media. Those with access to only a computer are least likely (69%) to participate in some form of social media.

Among the half of the affluent participating in some form of social media, about 80% of these people participate in Facebook and almost 60% participate in LinkedIn. Only 10% seem to participate in Twitter, which has its highest share (22%) among those who own a tablet and those who own both a smart phone and a tablet.

Only 26% of the respondents who use social media for any reason say they receive regular communications from a manufacturer or retailer to which they subscribe to receive product and related information. Since only 50% of the affluent say they use social media for any reason, this means only about 13% of the affluent use social media to receive regular communications from a manufacturer or retailer. Facebook is the most popular social media for “commercial” purposes, and on average, is connected to about 9% of the affluent for this purpose.

In contrast to the general use of social media where there are some substantial differences by age, gender, and net worth, the “commercial” use of social media varies more by gender and income. Among the affluent using social media for “commercial” purposes, Facebook has a share that ranges from 50% (among $6M+ net worth) to almost 75% among several segments of the affluent.

Among all those who participate in social media to receive regular product information from a business (manufacturer or retailer), Facebook has about a 69% share and is generally favored over the second most popular media by a margin of 3 or 4 to one. On average, these respondents participate in 1.2 types of social media to receive regular product information from a business. Only 11% seem to participate in Twitter, which has its highest share (37%) among those who own a tablet and those who own both a smart phone and a tablet.

Those who only have a computer give Facebook a 63% share and say they do not participate in Twitter. These respondents are most likely to say they participate in a type of social media not listed (17%).

Participants in the American Affluence Research Center Spring 2011 survey have an average annual household income of $333,000, an average primary residence value of $1.2 million, an average net worth of $3.1 million, and average investable assets of $1.8 million.

A description of the survey methodology and other detailed highlights of the survey can be viewed at: http://affluenceresearch.org/most-recent-tracking-study/highlights-of-most-recent-survey/

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April, 2011 – This Luxury Daily article features AARC research about affluent people’s use of social media (http://www.luxurydaily.com/50pc-affluent-consumers-do-not-use-social-media-affluence-research-center/).

By Rachel Lamb

Approximately half of upscale consumers do not use social media, which makes some experts wonder if a brand’s primary marketing is being misplaced online, according to a study by the American Affluence Research Center.

Of the half of affluent consumers who do use social media, only approximately 12.5 percent claim to get regular product information and news from brands’ social media accounts. Although social media is a great way to reach younger consumers, customers who are more likely to buy luxury brands, namely older and more educated individuals, are not getting their information from social networks.

“Social media is getting a lot of media attention in being very important and a wave of the future,” said Ron Kurtz, principal of Atlanta-based American Affluence Research Center. “However, there aren’t any statistics to show what the size of the audience is on those sites, particularly among the affluent.

“People that wouldn’t be considered affluent are making up the bulk of the numbers, along with a lot of younger people,” he said. “There isn’t really a good understanding of why brands should be [emphasizing social media] for any reason.

“I haven’t seen any good research on it.”

The American Affluence Research Center bi-annual survey studied the top 10 percent of affluent U.S. individuals.

The participants have a minimum net worth of $828,000 and an average net worth of $3.1 million.

These consumers earn 36 percent of the total income of all U.S. consumers, own 63 percent of the personal assets of all U.S. households and hold 89 percent of the total value of all publicly traded stock and mutual funds in the United States.

Face who?
Brands who use social networks such as Facebook, Twitter and Tumblr have boasted numbers of followers, customer interaction and feedback from events and contests.

Although social media can be used to build relationships with consumers who could eventually buy luxury goods in the future, Mr. Kurtz said that brands could be better advised to focus their primary marketing efforts on the customers who are able to purchase right now.

To go along with this, the Affluence Research has confirmed that upscale consumers are very much inclined to start spending again.

Although the depression was not too wounding to the truly affluent, the stock market plunge definitely affected spending habits.

For instance, males with a net worth of more than $6 million under 50 are the most likely to plan the buy of one or more major items including a new car, sailboat, house remodel; buy a new residence or vacation home; take a cruise or build a new residence or build a new vacation home.

“This is such as positive time, especially after the negative customer confidence survey in March,” Mr. Kurtz said. “Consumers are much more ready to spend on big purchases, almost up to where they were before the recession.”

Where’s (wealthy) Waldo?
If consumers cannot reach the majority of their target audience via social media, what steps need to be taken?

“I understand that brands want to connect with customers from the beginning to build a base foundation,” Mr. Kurtz said. “But it shouldn’t be the priority.”

Traditional media, such as direct mail, customer referrals and catalogs, are probably the most effective ways to reach affluent consumers.

Some brands, such as Harrolds department store in Australia, have completely opted out of the Internet and mobile and rely solely on word of mouth and mailers (see story).

“I’m not totally excusing all other types of media because I believe that businesses should have a well-rounded strategy which does include mobile and Internet marketing,” Mr. Kurtz said.

“But the best sources of business are referrals from existing customers, instead of solely trying to get prospective customers,” he said. “There are also a host of different activities including joint promotions and media publicity that are very important as well.”

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