The New Resourcefulness
Americans look to themselves and like what they see.
This is the dawning of the age of the resourceful consumer. Even the most affluent segment of the US population has gone value-conscious and is using a budget. The shift is permanent. It's making people happier.
That's the top line of this year's Study of Affluence and Wealth in America conducted by the Harrison Group for American Express Publishing.
The ever-engaging researcher Jim Taylor, vice chairman of the Harrison Group, delivered the results of this year's survey in an opening address at DPAC III in New York City, a gathering of publishing executives wrestling with how to make their businesses thrive, not merely survive.
Income for the average affluent family, defined as $100,000 and up, is down 7% year-over-year. More than 1.1 million have dropped out of the segment since last year due to job loss or other effects of the recession.
There is no bright light yet at the end of the recessionary tunnel, Taylor says. Optimism has tracked down with 46% of the affluent lacking optimism about the future and 42% lacking optimism for their child's future.
"People are looking for things that will protect them from making a mistake," Harrison says in terms of brand attributes that are ranking as important. More than half the research respondents, 53% , worry they could run out of money completely.
"We've transformed from the best customer in the world to the worst," he says, noting that the typical household with a $400,000 income is now saving $80,000 through smarter shopping. Not that this is a bad thing.
In the 16 categories tracked in the study, spending outlook for the next 12 months in the categories of automobile, clothing, travel and shoes are starting to trend up. Fashion, accessories, handbags and jewelry continue to trend downward.
The Harrison Group forecasts net consumption for the year will be down 5%.
The good part of all this is that people are turning to themselves, their families and the people who matter to them - fueling a rise in national self-sufficiency.
"It's what the American Dream was really all about," Harrison says. "Achievement against overwhelming odds… The American Dream wasn't about national capitalism."
Labeling it "The New Resourcefulness," Harrison said 88% of the American affluents say they have done a good job of making their household hold together and 61% have gone to a budget.
A full 50% of this wealthiest segment is now shopping at Costco (COST), although they continue to look for quality brands such as Ralph Lauren (RL) shirts. Four out of 5 will wait for something to go on sale before buying, and 65% are now shopping with coupons.
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