Highlights of Most Recent Survey
Highlights of the Spring 2014 Affluent Market Tracking Study #25
As an inexpensive way to conduct research among the affluent, custom questions can be purchased in these tracking studies for your exclusive use.
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
- Who has a positive outlook for the economy and their personal wealth and their spending plans
Special topics included in this report:
What was spent for December Holiday Gifts and Where It Was Spent:
- How much was spent in total and by which consumer segments
- How much was spent (by dollars and percentages) online, in stores, by phone, and other
Cruise Experience and Brand Experience, Familiarity, and Perceptions:
- How many have taken ocean and/or river cruises in the past 10 years
- Which of 19 cruise brands have they experienced in the past 5 years
- With what cruise brands are they familiar and their perceptions of the brands
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 19 cruise brands covered by the survey.
Satisfaction Guarantee: Full Money Back if You are Not Totally Satisfied
Buy our new Affluent Market Tracking Study #25 with a full money back guarantee. If you are not totally satisfied with the report, your money will be fully refunded with no questions asked.
The 52-page/41 exhibit Spring 2014 Affluent Market Tracking Study #25 is available at a price of $495. With a full 115 page set of 68 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 thename of your organization. AARC accepts checks and charge cards.
2) Survey and Report Content
This is the 25h 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 were used to identify the amount spent on December holiday gifts in 2013 and the method by which the gifts were purchased (online, in store, by phone, and other).
A series of questions about cruising identified what percentage of the affluent had cruised during the past 10 years, the types of cruises they had taken (ocean and/or river) and how frequently they had cruised.
For 19 cruise brands the respondents were asked which they had experienced during the prior five years, which they were familiar with, which they considered to be overrated, and what type of consumer they feel the brand is targeting or appealing to (status seeker, quality oriented, value oriented, experienced traveler, younger than me, and like me).
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 19 cruise brands listed for experience, familiarity, and perceptions were Azamara, AMA Waterways, Avalon Waterways, Carnival, Celebrity, Crystal, Cunard, Disney, Holland America, Norwegian, Oceania, Princess, Regent Seven Seas, Royal Caribbean, Seabourn, Silversea, Viking River, Uniworld, and Windstar.
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.
3) 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 10.9 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 330 men and women who promptly responded and met the minimum net worth requirement of $800,000. Their households have an average annual income of $268,000, an average net worth of $3.1 million, average investable assets of $1.5 million, and an average primary residence value of $1.1 million. Over 86% have a net worth of $1M or more.
The survey respondents represent 30 states. Eighty-seven (87) percent are married. The average age is 56.8 years. Sixty-four (64) percent are men and thirty-six (36) percent are women.
The maximum margin of error of this survey, at 95% confidence, is five percentage points.
Index values range from 0 to 200 and are compiled by subtracting negative feedback from positive. The value of a neutral response is 100. An index value of 100 means equal positive and negative feedback.
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.
4) Major Findings
The assessment of current business conditions (index of 87) declined 6 points from the Fall 2013 survey but is still 12 points above the Spring 2013 index. The index for future business conditions (117) rose a strong 12 points, and the index for change in the stock market (119) increased a strong 13 points over the Fall 2013 index. Both of the latter two indexes are well ahead of their Spring 2013 readings.
These results are generally consistent with changes from the September 2013 surveys for the Conference Board Consumer Confidence Index, Spectrem’s Affluent Household Surveys, and the Gallup Economic Confidence surveys of the general public. The Spectrem March survey, like ours, showed particular improvement in the lower wealth category and in income expectations.
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) rose a strong 13 points above the Fall 2013 survey and returned to positive territory (109) and its highest level since Spring 2012 (126).
The expected change in after tax personal income (index of 90) rose a strong 12 points from Fall 2013 and is 14 points above Spring 2013. Now in neutral territory for the first time since 2012, this index has not been in positive territory since Spring 2012 (103). Equally, if not more important, almost half (46%) expect their net worth (index of 132) to be higher in March 2015.
Spending plans for the eight major items and the indexes for the change in spending for the 17 products and services tracked by these surveys are about the same or a little stronger than the prior two surveys 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.
The absence of plans for major expenditures (“none of the above”) had been relatively stable (43% to 46%) prior to the Spring 2008 survey. Since then, the absence of plans for a major expenditure has ranged from 55% to the 60s, with a peak of 68% in the Spring 2009 survey and a record low (a positive indicator) in the Spring 2005 survey (36%). The current reading of 45% is a big improvement from recent surveys and a return to pre-recession levels.
Of the 17 product categories tracked for change in spending plans, four increased to positive territory, five are in the neutral range, and eight are in negative territory, suggesting a decline in spending. All but three categories were essentially equal to or stronger than in Fall 2013.
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 19 points higher (92 versus 73) for those expecting an increase or no change in their income versus those expecting a decline in income. The difference is 25 points (90 versus 65) based on net worth expectations. Similar differences are evident in the plans to acquire one of more of the eight major items.
With only 36% of the affluent planning to defer or reduce expenditures during the next 12 months, this represents an improvement of 8 percentage points from Spring 2013 and essentially no change (one point improvement) from Fall 2013.
The encouraging mood and spending plans of the affluent may have been negatively influenced by the volatility in the stock market and the international tensions during March and April.
Some of the highlights of the special topics covered in this survey include evidence of stronger spending by the affluent in the reported expenditures for December 2013 holiday gifts. A few more of the affluent bought holiday gifts (and spent almost 25% more on average) than what was estimated in our fall 2013 survey.
Online purchases of gifts accounted for 38% of the total spent by the affluent for holiday gifts or about $11.4 billion versus about $15 billion spent in stores. Total gift expenditures were estimated to be about $30 billion.
On average, 46% of the affluent have taken a cruise of 3 nights or longer during the past 10 years. The cruise industry association estimates less than 4% of the U.S. population have ever taken a cruise.
Among those who have cruised during the past 10 years, an average of 3.4 cruises were taken (about one every 3 years). Given the 11.4 million affluent households represented by this survey, this equals an average of about 3.6 million annual cruise passengers (which is consistent with the forecast shown in Ex. 17 for this and prior surveys).
Experience and familiarity with the 19 cruise brands listed in the survey were both low. Familiarity with the luxury brands was surprisingly low.
Given the relatively low levels of brand experience and familiarity, the respondents volunteered few opinions or perceptions of the attributes of the people each brand is attracting.
This data illustrates the importance of screening for respondent usage, ownership, and familiarity in any type of brand rating research. It appears that much brand research should be used with caution, as it does not screen respondents in this way or distinguish between the responses of those with experience or knowledge of the brand and those that do not.
*** Satisfaction Guarantee: Full Money Back If You Are Not Totally Satisfied ***
Buy our new Affluent Market Tracking Study #25 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 52-page/41-exhibit Spring 2014 Affluent Market Tracking Study #25 is available at a price of $495. With a 115-page set of 68 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.
5)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 their personal wealth 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 consumers
- Which segments of the affluent are continuing to spend and which are not (and why)
- Whether they have cruised during the past 10 years and how frequently
- Their experience and familiarity with each of 19 cruise brands
- Their perceptions of each of the 19 cruise brands
- What type of consumer each of the 19 cruise brands is targeting or appealing to
- What they spent for December holiday gifts and the method of purchasing the gifts
Order your copy today.
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