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Affluent Market Tracking Study #23, Spring 2013 Survey of the Wealthiest 10% of US Households

Affluent Market Tracking Study #23, Spring 2013 Survey of the Wealthiest 10% of US Households
  • Apr 15, 2013
  • 71 pages
  • American Affluence Research Center
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 mean 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. Sample sizes for some products, especially in the numbers for age and net worth segments, were often small and thus subject to some volatility. 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.

This report provides extensive current and historic trend data, among different segments of the affluent market, 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 include:

Among the 11.4 million most affluent households that account for almost half of all consumer spending, how many.....
1. Own a smart phone and/or tablet and which type (Apple, Android, etc.).
2. Participate for any reason in social media and which ones (Facebook, LinkedIn, etc.).
3. Subscribe to receive messages from manufacturers or retailers via social media.
4. Use each type of social media (Facebook, LinkedIn, etc.) to receive commercial messages.
5. Went online to research and/or purchase a product or service during the past 12 months.
6. Researched and/or purchased online each of 18 listed products and services.
7. Have a positive outlook for the economy and their personal wealth for the next 12 months.
This is report #23 in the original and only twice-yearly tracking study of the mood and spending plans of the wealthiest 10% of U.S. households, based on net worth, which is shown to be a more stable indicator of wealth than income in research by the Federal Reserve Board and the Internal Revenue Service. These surveys are designed to provide information critical for effective marketing to the affluent and luxury consumers.

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)
Highlights of the survey can be viewed at:

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. And it is based on a mail survey and not an online panel.

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,. These surveys regularly measure and track their 12-month outlook 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 reveal which segments of the affluent will be maintaining their spending during the next 12 months and which will not and their expectations of changes in income and net worth, which are clearly influences that help explain the current and near term spending plans of the affluent and provide a perspective of what to expect for your business over the next year or so.

This survey also contained a series of questions to identify 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.


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.

Additional Information

The research available from The Federal Reserve Board provides the following profile of the wealthiest 10% of U.S. households:

• Have a minimum net worth of $828,000.
• Have an average net worth of $3.1 million.
• Have an average income of $256,000.
• Earn 36% of the total income of all Americans.
• Own 63% of the personal assets of all U.S. households.
• Hold 89% of the total value of all publicly traded stock and stock mutual funds in the U.S.
• Own a primary residence valued at an average of $651,000.
Table of Contents
Executive Summary 4-5 -
Introduction: Background, Methodology, Respondent Profile , Historical Background, Index Explanation 6-8 -
Survey Highlights 9-16 -
Respondent Profile 17-18 1-2
Assessment of Current Business Conditions 19 3
Affluent Consumer Expectations (ACE) for Economy, Stock Market, and Household Income 20-21 -
Future Business Conditions 20 4
Expectations for Stock Market and Household Income 20 5-6
Affluent Consumer Expectations (ACE) Economic Indexes by Selected Demographic Segments 21 7
Historic Affluent Consumer Expectations (ACE) Economic Indexes 22-24 8-10
Outlook for Changes in Savings/Investments 25-26 -
Expectation of Changes in Household Savings in 2012 and Index for Change in Savings 25 11-12
Historical Index for Change in Savings 26 13
Primary Investment Objectives and Net Worth Expectations 27-29 14-16
Plans to Purchase 8 Major Items in Next 12 Months by Demographics and Historic Intentions 30-32 17-19
Expected Changes in Spending for 17 Products and Services 33-41 -
Expected Changes in Spending During Next 12 Months 33 20
Historic Indexes for Expected Changes in Spending 34-39 21-26
Change in Spending Indexes for 17 Products and Services by Selected Demographic Segments 40 27
Historic Spending Indexes for Home Durables, Leisure, and Vacation Travel 41 28
Impact of Economic Conditions on Spending by the Affluent 42-45 -
Actions Taken (or Not) to Reduce Household Expenditures by Selected Demographic Segments 42 29
Historic Actions Taken (or Not) to Reduce or Defer Expenditures 43 30
Major Expenditures in Next 12 Months 44 31
Indexes for Expected Changes in Spending During Next 12 Months for 17 Products and Services 45 32
Ownership and Usage of Smart Phones and Tablets 46-47 33-34
Participation in Social Media 48-51 35-38
Use of Internet to Research and/or Purchase a Product 52-71 39-58
About The American Affluence Research Center 72 -
Mailing Lists of the Affluent 73
List of Figures
List of Tables
Companies Covered