Highlights of Most Recent Survey

Highlights of the Spring 2013 Affluent Market Tracking Study #23

As an inexpensive way to conduct research among the affluent, proprietary questions can be purchased in these tracking studies for your exclusive use.

Overview

Major findings are detailed in a section below.

This report provides extensive current and historic trend data presented for key demographic segments, on the following:

• Purchase intentions for 8 major expenditures including autos, primary residences and vacation homes, cruises, and major home remodeling
• Expected changes in spending for 17 products and services including vacation travel, dining out and recreational and entertainment activities, various durables for the home, apparel, and fine jewelry and watches

Special topics included in this report:

Among the 11.4 million most affluent households that account for almost half of all consumer spending, how many…

Own a smart phone and/or tablet and which type (Apple, Android, etc.)
Participate for any reason in social media and which ones (Facebook, LinkdedIn, etc.)
Subscribe to receive messages from manufacturers or retailers via social media
Use each type of social media (Facebook, LinkedIn, etc.) to receive commercial messages
Went online to research and/or purchase a product or service during the past 12 months
Researched and/or purchased online each of 18 listed products and services
Have a positive outlook for the economy and their personal wealth for the next 12 months

The new spring survey presents the above data for market segments defined by age, gender, income, and, most importantly, net worth. See “Survey and Report Content” below for a list of the 18 products and services covered in #6 above.

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Buy our new Affluent Market Tracking Study #23 with a full money back/no questions asked guarantee. If you are not totally satisfied with the report, your money will be fully refunded with no questions asked.

The 71-page/58-exhibit Spring 2013 Affluent Market Tracking Study #23 is available at a price of $495. With a 199-page set of 100 tables of cross-tabulated data, the price is $695. To order, click here and tell us which you would like to buy. Please include the purchase price, your name, and the name of your organization. AARC accepts checks and charge cards.

Survey and Report Content

This is the 23rd in the original and only continuing series of twice-yearly surveys that focus on the 11.4 million households that represent the wealthiest 10% of all U.S. households, based on net worth, as determined by The Federal Reserve Board. Since 2002 these surveys have regularly measured and tracked the 12-month outlook of the most affluent households for the economy, the stock market and their personal earnings, savings, investment objectives, and spending plans for 17 product categories and 8 major expenditures. In addition, each survey contains special questions exploring new topics.

Special questions in this survey quantified the ownership and usage of smart phones and tablets, and which types of each. The respondents also revealed their participation in social media, and which ones, for any purpose and to receive regular communications from manufacturers and retailers. The respondents also were asked which of 18 listed products they had researched and/or purchased online and how purchases were made, i.e. in store, by computer, by mobile device, or by phone.

These tracking studies are unique in that they are conducted by mail (similar to the Conference Board surveys for the Consumer Confidence Index) among projectable national samples drawn at random, and they focus on the future outlook and spending plans of the affluent, rather than asking the respondents to remember and reconstruct past spending that is then extrapolated.

The surveys track plans for major purchases (vacation homes, primary residences, home remodeling, automobiles, boats, and cruises) during the next 12 months. The surveys also track anticipated changes in spending during the next 12 months for 17 categories of products and services. These include fine jewelry and watches, domestic and international travel, dining in casual and upscale restaurants, furniture, major appliances, entertainment equipment, home computer equipment, entertainment, recreational activities, collectibles, designer and non-designer apparel, and charitable and political contributions.

The 18 products listed for online research and/or purchase were:

· non-business airline travel	· cookware	· major home appliances
· lodging for non-business travel	· new motor vehicles	· small home appliances
· home furniture	· books/movies/games	· home computer equipment
· designer apparel	· prescription medicines	· home entertainment equipment
· non-designer apparel	· other healthcare products	· cameras/photographic equipment
· gourmet foods	· cruise/ocean travel	· fine jewelry/watches

Our new, expanded report format with graphs and charts will help you to identify and understand the differences between affluent consumers and the true luxury consumers. These graphic elements, plus the executive summary and highlights sections, will facilitate a quick read of a report rich with data.

The wealthiest 10% of U.S. households account for almost half of all consumer spending, and these surveys are designed to provide information critical for effective marketing to affluent and luxury consumers.

Research Methodology

Unlike other affluent and luxury market research that is based on online surveys of panels of people who are compensated for participating in regular and frequent surveys, our unique direct mail surveys are based on projectable national samples drawn at random to be representative of the precisely defined population of affluent households, consistent with the research of the Federal Reserve Board. Confident of their anonymity, the respondents to our surveys are typically more affluent and more open in providing confidential information.

Surveys were mailed to a randomly selected, national sample of 4,500 men and women in households that, based on their income and ownership of certain assets, were expected to meet the minimum net worth requirement of $800,000. The overall survey response rate was 12.9 percent, thus showing the importance of this survey to the respondents, who have been a leading indicator of economic conditions, as when they called the recession in our March 2008 survey (well ahead of everyone else).

This report is based on the responses from 463 men and women who promptly responded and met the minimum net worth requirement of $800,000. Their households have an average annual income of $309,000, an average net worth of $3.1 million, average investable assets of $1.8 million, and an average primary residence value of $1.2 million.

The survey respondents represent 25 states and the District of Columbia. Eighty-six (86) percent are married. The average age is 57.6 years. Fifty-two (52) percent are males and forty-eight (48) percent are females.

The maximum margin of error of this survey, at 95% confidence, is five percentage points.

Index values shown in this report can range from 0 (negative) to 200 (positive), with an index of 90 to 100 being a neutral range where little or no change is expected.

This survey is more informative than others for several reasons. Unlike some other surveys of the affluent, this is not an extrapolation of past spending that they have been asked to remember and reconstruct. It is designed to identify future spending plans and intentions.

Unlike most other surveys of the affluent, this survey of people does not include respondents who do not qualify to be among the wealthiest 10% of US households, based on net worth. Research by the Federal Reserve Board and the IRS shows that net worth is a more stable indicator of wealth than is income. There is more turnover among the people in the highest percentiles of income than among the people in the highest percentiles of net worth.

Unlike other types of surveys where the respondents cannot be confident of their anonymity, the respondents to our surveys are typically more affluent and more open in providing confidential information.

Major Findings

The assessment of current business conditions (index of 71) rose 18 points from the Fall 2012 survey. The index for future business conditions (107) fell 8 points, and the index for change in the stock market (106) dropped 5 points. These three indexes in 2011 and 2012 have been higher in the spring than in the preceding and subsequent fall surveys.

These results are consistent with changes in the March 2013 Consumer Confidence Index of 57.9 for “present situation” versus 50.2 in the prior September and 60.9 for “future outlook” versus 83.7 in September 2012, as reported by The Conference Board, and similar measures of consumer mood tracked by others.

The overall Consumer Confidence Index in March fell almost 11 points to 59.7 from the September 2012 index (70.3). The affluent seem to have a slightly better outlook than the general public. The composite ACE 12-month Economic Outlook Index (which is the average of the 12- month outlook for business conditions, the stock market, and household income) fell by 9 points from the Fall 2012 survey but is in neutral territory (95) while the Consumer Confidence Index is somewhat negative.

The expected change in after tax personal income (index of 76) declined 14 points from Fall 2012. Over a third expect their net worth (index of 112 is down 3 points from Fall 2012) to be higher in March 2014.

Spending plans for the 8 major items and the indexes for the change in spending for the 17 products and services tracked by these surveys are about the same as Fall 2012 in most cases. A substantial amount of additional potential purchases of the 8 major items are represented by the consumers that have yet to decide about a new auto, a cruise, a remodeling project, and the acquisition of a primary or vacation home. Of the 17 product categories, only one (domestic vacation travel) remained in positive territory, five are in the neutral range, and 11 are in negative territory, suggesting a decline in spending.

Expectations regarding future income and net worth influence and/or correlate with spending plans. For example, the average index for changes in spending plans is 17 points higher (90 versus 73) for those expecting an increase or no change in their income versus those expecting a decline in income. The difference is 18 points based on net worth expectations.

With 44% of the affluent planning to defer or reduce expenditures during the next 12 months, this represents an increase of 6 percentage points from the Fall 2012 survey and is now at the highest level since Fall 2009.

There is a risk that the mood and spending plans of the affluent could decline later in the year, as it did in 2011 and 2012, depending on changes in the key indicators of employment and GDP, the stock market, the credit crisis in Europe, and congressional gridlock on budget and tax issues.

Some of the highlights of the special topics covered in this survey include: approximately 80% of the affluent report owning one or more smart phones and/or tablets. The iPhone is named over twice as often as the combined total of Android, Blackberry, and other. The iPad is named about 5 times more often than the combined total of Android and other tablets.

Over half of the affluent (53%) report owning two or more mobile devices. Those most likely to own multiple devices are age 59 and under, males, those with income of $200K+, and those with net worth of $1.5M+.

About 28% of the affluent who have regular access to a computer, or other means of accessing the internet, say they do not participate in social media. Among the 72% that do participate in social media, Facebook is named slightly more often than LinkedIn. Those most likely to participate in social media are under age 50 and those with a net worth under $6M+.

Just under half (41%) of those who participate in social media are in 2 or more (and as many as 5) of the social media. On average, those who participate in social media are in 2 social media.

Among those that participate in social media, less than half (47%) subscribe to receive regular communications from a manufacturer or retailer. Women and those under age 50 are most likely to subscribe for such communications. Among those who participate in social media, only about one in seven subscribe to 2 or more social media to receive messages from manufacturers and retailers. This is about 30% of the total who subscribe to receive such messages via social media. The remaining 70% subscribe via only one outlet of social media.

Among those with regular access to a computer, or other means of accessing the internet, about 88% say they went online to research and/or purchase a product during the past 12 months. There were few differences among the various demographic segments of the sample. The results should be viewed as being indicative of patterns rather than absolute.

The most frequently mentioned products that were purchased during the past 12 months among the people who had done online research and/or purchases were non-business airline travel (76%), lodging for non-business travel (74%), and books/movies/games (63%). Among the other 15 products listed, only one was purchased by more than 40% (home computer equipment).

Among the items that were purchased, a purchase by computer was highest for non-business airline travel and lodging. While there was some substantial variation by product, purchases by computer were generally equal to or greater than in store purchases. With the exception of books/movies/games at 10%, purchases were made via mobile devices by 8% or less of the buyers of the 18 listed products.

When people did online research, they were very likely to make a purchase. When people did not do online research, they were very unlikely to make a purchase.

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Top 4 Ways to Use and Benefit from This Research

If your perceptions of today’s luxury and affluent consumers (who are often very different) are largely derived from what you read in the media and online, you are probably creating your marketing strategies and plans based on false premises. To stay ahead of your competitors, you need AARC’s new research report to understand today’s luxury and affluent consumers and how to market to them.

1) Develop an understanding of the general mood of the affluent and their expectations for business conditions and personal income over the next 12 months. Gives you a basic perspective on general market conditions that will determine marketing opportunities and challenges.

2) Identify changes in the spending plans of the affluent for your specific product category during the next 12 months. Shows you how potential sales of your product category compare to prior years and indicates what competitive pressures may result in your industry.

3) Learn which segments of the affluent market represent the best sales potential for you during the next 12 months. Identifies the market segments that are cutting back on spending and those that are continuing to spend for your product category.

4) Create your marketing and sales plans with data based on the future intentions of the affluent. Unlike many other surveys of the affluent, this is not an extrapolation of past actions that they have been asked to remember and reconstruct.

With this new report, you will learn:

Spending plans over the next 12 months of both the luxury and affluent consumers (and they are often different)
Which of 8 major expenditures show the most sales potential and among which segments
Which of 17 product categories show the most sales potential and among which market segments
Which segments of the affluent are continuing to spend and which are not (and why)
How many own a smart phone and/or tablet and which type (Apple, Android, etc.)
Who participates for any reason in social media and which ones (Facebook, LinkdedIn, etc.)
How many subscribe to receive messages from manufacturers or retailers via social media
Who uses each type of social media (Facebook, LinkedIn, etc.) to receive commercial messages
Who went online to research and/or purchase a product or service during the past 12 months
How many researched and/or purchased online each of 18 listed products and services

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