For many years now American Express Publishing and the Harrison Group have been carrying out a monthly survey "The Survey on Affluence and Wealth in America" that helps us to sketch a fascinating portrait of wealthy American consumers. The 10% richest people, with an annual income more than $ 100,000, represent 50% of sales and 70% of retail margins: They thus have a major influence on luxury sales. It is important to remember their track-records: Coming from the middle class, having studied in public universities, devoting their work to the service of a passion, they suddenly dispose of liquidities that propel them into another world.
The financial and economic crisis has made them (relatively) poorer, but has profoundly changed their attitudes towards money as well as luxury. As the 2009 report states: "A new resourcefulness has emerged among the wealthy, and it is about far more than simply saving money. It's about a growing tendency to judge oneself less by immediate accomplishments, and more on one's ability to make smart, prudent decisions”. It consists of a redefinition of the values that lie at the core of their identity - "intelligence", "loyalty", "family-centred," "smart shopper" take precedence over "mundane", "risk taker", "spender"...
The consequences are immediately perceivable: in 2007, 65% of those questioned said they spent more than $5,000 in the course of the year in department stores. This percentage was no more than 27% in 2009. Spending is no longer an important preoccupation; it has been replaced by “save” and “buy smart”. A point to note is that two-thirds of them say they buy at sales! All categories have been affected (except children's clothing and hybrid cars).
All this has consequences on their attitudes towards brands: they want them "responsible", they ask them to convey values, to make it possible to experience "life’s little pleasures", to offer products that have meaning. As McKinsey puts it: they seek "value with values”.
Every luxury brand will have to ask themselves the question of meaning once again: what is the factor that gives it the significance it conveys? Please don’t say, “we offer sponsorships” (how many clients / consumers are able to spontaneously name your brand as being related to art?), "We promote sustainable development" (idem. See the BCG report and the Sloan Management Review "The Business of Sustainability"). Let's talk instead about the seminal brand legend, and its contemporary expression, about creativity held up as a principle (not only in the products!), the revaluation of the role of sales personnel...
The financial and economic crisis has made them (relatively) poorer, but has profoundly changed their attitudes towards money as well as luxury. As the 2009 report states: "A new resourcefulness has emerged among the wealthy, and it is about far more than simply saving money. It's about a growing tendency to judge oneself less by immediate accomplishments, and more on one's ability to make smart, prudent decisions”. It consists of a redefinition of the values that lie at the core of their identity - "intelligence", "loyalty", "family-centred," "smart shopper" take precedence over "mundane", "risk taker", "spender"...
The consequences are immediately perceivable: in 2007, 65% of those questioned said they spent more than $5,000 in the course of the year in department stores. This percentage was no more than 27% in 2009. Spending is no longer an important preoccupation; it has been replaced by “save” and “buy smart”. A point to note is that two-thirds of them say they buy at sales! All categories have been affected (except children's clothing and hybrid cars).
All this has consequences on their attitudes towards brands: they want them "responsible", they ask them to convey values, to make it possible to experience "life’s little pleasures", to offer products that have meaning. As McKinsey puts it: they seek "value with values”.
Every luxury brand will have to ask themselves the question of meaning once again: what is the factor that gives it the significance it conveys? Please don’t say, “we offer sponsorships” (how many clients / consumers are able to spontaneously name your brand as being related to art?), "We promote sustainable development" (idem. See the BCG report and the Sloan Management Review "The Business of Sustainability"). Let's talk instead about the seminal brand legend, and its contemporary expression, about creativity held up as a principle (not only in the products!), the revaluation of the role of sales personnel...
