Retailers May See Nice Boost in Holiday Gift Sales to Affluent Consumers Per New Survey
In a new survey by The American Affluence Research Center, the wealthiest 10% of U.S. households, based on net worth, indicate their holiday gift purchases may provide a pleasant surprise for retailers.
The preliminary results of the survey indicate that the average expenditure for holiday gifts by the affluent will decline by about 2% to $2,513, which will be about four times the gift expenditures of the average U.S. household. However, with a higher percentage of affluent households making gift purchases, their total purchases will equal about a 2.2% increase over the $27 billion in their estimated gift purchases in 2012.
One of the early forecasts from ShopperTrac suggests a miserly 2.4% increase over total 2012 holiday sales to all U.S. households, for the worst holiday shopping season since 2009. In anticipation of a challenging retail environment, retailers are starting their holiday promotions earlier than ever and introducing new promotions to boost holiday sales, which account for up to 40 percent of yearly sales volume (National Retail Federation) and 25 percent of annual retail profits (International Council of Shopping Centers).
The different methodologies and assumptions used to develop holiday sales forecasts will make it difficult to find a consensus on what may actually happen. However, the affluent consumers surveyed by The American Affluence Research Center may be the most likely to help the retailers increase holiday sales, as they are the big spenders and those least likely to use credit and debt to finance gift purchases.
The Affluent Market Tracking Study #24, the latest in a series of twice yearly surveys by The American Affluence Research Center, reports that 97% of those surveyed say they will purchase holiday gifts this year, which is an increase from 93% in 2012 and 91% in 2011. These affluent households report spending an average of $2,564 for holiday gifts in 2012, which is 23% higher than they had originally anticipated in the 2012 survey.
Among those planning to purchase holiday gifts this year, 73% say they will spend the same as last year and 7% say they will spend more (an average of 10% more) on holiday gifts as they did in 2012. About 20% say they will spend less (about 14% on average).
These numbers represent some improvement over the 2010 to 2012 surveys. Understandably, those with a more positive outlook about the economy and their personal financial situation are most likely to have the strongest spending plans.
The 11.4 million households represented by the American Affluence Research Center survey account for almost half of total consumer spending. Their mood and spending plans are often influenced by changes in the stock market and Washington politics. If things move in a positive direction during the key shopping period after Thanksgiving, the affluent could increase their expenditures even more than they currently anticipate, as they did in 2012.
The wish list of the affluent females expecting to receive holiday is topped by money/gift cards (44%), clothing (31%), and fine jewelry/watch (33%). For affluent males, the top gift expectations are money/gift cards (46%), clothing (40%), and books/DVDs/etc. (22%).
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Contact:
Ron Kurtz
(770) 740-2200
rk@affluenceresearch.org
About Us: Established in 2001 and with an exclusive focus on the affluent market, The American Affluence Research Center has become a recognized authority and a credible source of reliable insight and marketing information about the values, lifestyles, attitudes, and purchasing behavior of America’s most affluent consumers. AARC conducts the original and only continuous twice-yearly tracking studies of the mood and future spending plans of the wealthiest 10% of U.S. households.
Key findings and highlights of the American Affluence Research Center survey can be viewed Here beginning Oct. 15. The survey is based on a national sample representative of the wealthiest 10% of Americans based on net worth of $800,000 or more. The respondents reported an average net worth of $3.1 million.
Key findings from the Fall 2013 Affluent Market Tracking Study #24 include the following:
• This year, 97% of affluent consumers will buy holiday (Christmas or Hanukah) gifts. In 2012, the figure was 93%. In 2011, it was 91%. In 2010, it registered at 88% a drop from the 91% recorded in 2009, and the high of 97% in pre-recession 2006.
• Respondents estimate the adults in their household spent an average of $2,564 in 2012 and $2,154 in 2011 on holiday gifts. Past averages were $2,357 in 2010; $2,399 in 2009, and $2,505 in 2008.
• This year 7% of affluent consumers say they will spend more on holiday gifts than in 2012, and 73% say they will spend the same. These numbers were 6% and 71% respectively in the 2012 survey and 3% and 69% respectively in the 2011 survey.
• With 7% saying they will spend more (an average of 10%) and 20% saying they will spend less (an average of 14%) the weighted average change in spending per affluent household is estimated to be negative 2.0%.
• With a 2.0% decline from 2012 average spending, the estimate for average 2013 spending is $2,513 per household. This equates to a total spend of $27.8 billion for the affluent households that will be buying holiday gifts this year. The larger percentage of households buying gifts will offset the potential slight decline in average spending per household and result in about a 2.2% increase over the level of total 2012 spending.
• The intent to buy holiday gifts escalates as income rises, and increases as age and net worth decline—an indicator that more mature respondents have fewer people to buy for and spend less on the gifts.