In the latest of the twice yearly surveys of the most affluent 10% of US households by The American Affluence Research Center, the respondents were asked to specify the most they could imagine spending for 37 different products and services if they were to purchase the item during the next 12 months. They were also asked to name the brand they would most likely purchase. The goal was to identify how the affluent define luxury, in terms of price points and brands, for each of the products.
The minimum and maximum price points reported in this new survey, though realistic for many of the products, should probably be dismissed as being rather “extremeâ€. The median value, which is the mid point (not the average) of all the values/prices reported, seems to be very realistic for all 37 products and services, if not a bit low, given the affluence of the respondents. It is important to note the relative degree of consistency between women and men in the median values for most of the 15 products where they both gave opinions.
For a room in the winter in a Caribbean resort, the median value was $300 for men and $250 for women. The lowest price suggested was $50 (men) and $60 (women). The highest price was $3,000 (men) and $1,500 (women).
Only a third of the respondents named the brand they would most likely purchase. Marriott (20%) and Ritz Carlton (9%) were the two mentioned most frequently.
For a hotel room for a New York City vacation, the median value was $300 for both men and women. The lowest price was $50 for men and $100 for women. The highest price was $1,000 for both men and women.
Only a third of the respondents named the hotel brand they would most likely buy. Marriott (27%) and Hilton (16%) were the two brands mentioned most frequently.
For a European cruise, the median value was $300 per night per person. This was true for the responses of both males and females. The lowest price suggested was $60 (men) and $100 (women). The highest price was $10,000 (men) and $20,000 (women).
Less than a quarter of the respondents named the cruise brand they would most likely purchase. Among those that did, the most frequently mentioned brands were Royal Caribbean (18%) and Princess (17%).
The AARC research has consistently shown over the years that the affluent represent over 3 million cruisers per year and that most of their cruises are with companies that would be considered premium or contemporary brands. The price points and brands reported in this new survey are consistent with prior survey findings.
The Affluent Market Tracking Study #14 is a national survey representative of the wealthiest 11.2 million households (as defined by net worth in the most recent Federal Reserve Board research). The 552 survey participants have an average income of $304,000 and an average net worth of $3.1 million.
The results of this research demonstrate that surveys that attempt to measure spending on “luxury†items are useless, at best, and dangerously misleading, at worst, if “luxury†is not precisely defined by specific price points. The same appears to be true for surveys that attempt to identify “luxury†brands without specifying price points to define “luxuryâ€.
Survey highlights are posted at www.affluenceresearch.org
AARC provides marketing research, mailing lists, and consulting services to businesses that focus on the affluent. For more information: Ron Kurtz at KurtzGroup@comcast.net or 770-740-2200.