The 2012 Survey of Affluence and Wealth in America predicts a slight increase in luxury spending by affluent and wealthy families for the coming year. Co-produced by American Express Publishing and the Harrison Group, now in its sixth year, the study looks at the attitudes, lifestyles, luxury category spending patterns and financial services of those in the top 10 percent of the American household income spectrum.
The study respondents have a minimum $100,000 discretionary income and the study includes projectable analyses of Americans in the top one percent of the income spectrum.
The study forecasts spending of nearly $244 billion across 13 discretionary categories, including travel, fashion and home entertainment, among others. The average affluent and wealthy family will spend slightly more than $20,000 per household on these categories in the next 12 months. Study directors estimate a 500,000 increase in the number of families with a minimum of $100,000 in discretionary income, a three percent rise for 2012. According to Dr. Jim Taylor, vice chairman, Harrison Group, and managing director of YouGov, "It is estimated that the total discretionary luxury consumption market for 2012 will be approximately $375 billion and nearly two-thirds of all luxury spending will be consumed by the top 12 million families."
The study found that on average, families in the study save 23 percent of their income, while one percenters save 34 percent.
Across the 13 discretionary spending categories, 11 percent of consumers expect to spend more, and 79 percent anticipate spending the same on goods and services this year as compared to last year. Categories projected to benefit are those that are experiential in nature, with travel as the front runner. In fact, 20 percent of respondents are planning to increase the amount of money they spent versus last year on both weekend getaways and vacations. 20 percent of families have concentrated their spending on products, services and travel that meet a very high bar in terms of quality, craftsmanship and service without an expectation for discounted pricing.
"The 10 percent of US households represented by this group accounts for over five trillion in spending or about 50 percent of US non-necessity spending. Of course, the nature of 'necessity' is an eye-of-the-beholder phenomenon, but our study is able to link purchasing in travel, real estate, automobiles and fashion to what we are calling 'quality in life' purchasing. On that basis, the search for both value and worth, but especially worth, will dominate the luxury agenda in 2012," says Jim Taylor.
The Survey of Affluence and Wealth in America details the lives and lifstyles of Americans with at least $100,000 in discretionary income. Collectively, these households generally reflect the top 10 percent of the American financial elite, representing an estimated 12 million households in 2012 (500,000 more than 2011). The sampling plan ensures adequate representation of loftier economic strata as well, including those in the top One Percent (i.e. those with household incomes of at least $450,000). In addition, individuals in the top .6 percent as well as those with more than $50 million in total assets have been profiled.
The data presented is from Q1, 2012, among 1,268 affluent and wealthy consumers, including 432 "Upper Middle Class" consumers, 445 "Core Affluent," and 390 "One Percenters." Upper Middle Class consumers are those with discretionary incomes ranging from $100,000 to under $150,000. Core Affluent consumers have discretionary incomes of at least $150,000 with household incomes of under $450,000.