The Affluent Market: What Is Influencing Them?

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AdNation News reports, as the economy recovers, signs point to an affluent segment that is spending again. Receptivity to TV advertising leads among this group.

For affluent consumers, traditional media still has a big influence, according to the Shullman study. Television is still number one, Internet second, and magazines are number three for potential reach.

AdNation News reports on the latest consumer behavior from the affluent segment. There are further signs of a recovering economy with new data that shows the affluent segment -- those with a household income of over $100,000 -- and are spending again, after some caution shown in the post-recession years of 2009-2012.    

A June study by the Shullman Research Center's "Luxury and Affluence Monthly Pulse" states that not only are affluent Americans buying luxury items, but that about one-third of American adults -- extrapolated from Shullman's surveys -- said they definitely or probably will buy a luxury product or service over the next 12 months. The study, conducted online between late February and March 6th, involved 1,000 interviews of consumers in households making $75,000 or more. Also, about 74% of those who make over $500,000 said they would buy luxury products over the next year.

Underlying this trend is a Nielsen survey conducted in February and March that showed consumer confidence is rising. Nielsen reports that in North America, confidence rose four points in 2Q 2013, over 4Q 2012. North America's increase was larger that other global regions, according to Nielsen.    

Marketers are also seeing improvement in the vigor of the affluent category. Jeff Bedard, Marketing Director for the Chase Saphhire credit card, says, "We know from Chase Sapphire cardholder data that spending on travel and dining using the card has increased in the past two years. We are seeing some increased optimism overall as the economy has improved – and a continued willingness to spend money on experiences that create new discoveries and unique enjoyment opportunities."

Nancy Hubbell, Prestige Communications Manager at Lexus, says, "In the height of the recession, some customers were hesitant to purchase new luxury cars because of the appearance of spending frivolously. Now, we're seeing people get back into the market." According to Hubbell, Lexus sold just over 244,000 vehicles in 2012, a higher total than for any year since 2008.

According to an article this month from the American Affluence Research Center, luxury private jet travel has soared in recent months due to an intersection of strong markets, partnerships and expansions by several brands. According to the Center, this may be due to the affluent having substantially increased their wealth in recent years in the stock market, and the partial recovery of real estate values.

As for advertising, the affluent sector has in recent years shown more receptivity to print mediums, with digital still catching up. For affluent consumers, traditional media still has a big influence, according to the Shullman study. Television is still number one, Internet second, and magazines are number three for potential reach. Magazines and television were second and third, respectively, for potential effectiveness. "These luxury consumers are avid shoppers, but they are also avidly seeking relevant and engaging information and readily process that into planning to buy luxury goods and services," says the report.    

Traci Gregorski, Vice President, Marketing at Market Track, a data-driven promotion and pricing intelligence research company, says there are some recent indicators in the affluent segment that come as a surprise. One of those is that affluents are being influenced by promotions as much as those in lower income categories. Affluents were influenced in their purchase decisions 87% of the time by an online or print promotion, according to Market Track.

Market Track data also shows that 84% of affluent shoppers participate in "showrooming" (researching products online while in store) in the past 12 months, and 78% participated in "webrooming" (researching products online first, before making a purchase in store). Both of these numbers are consistent with other income levels, showing that affluent shoppers may still be as value-conscious as others at lower-income levels. But as for Mobile, Gregorski says that, as for driving and transacting purchases, "it's just not there yet."

According to a recent Market Track study, last month North American shoppers were also more active in seeking out promotions than ever before—of those surveyed, over 80% frequently use more than one media type to access deals. "All media types are relevant and important to take into consideration when optimizing promotional strategy," she says. -R.G.

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