that affluent consumers have little faith in the government's ability to "fix" the present economic situation.
Consumers with Net Worth Less than $10 Million Plan to Cut Back in 2008
The survey revealed that 58.2 percent of "Rich" consumers (those with a net worth from $10 to $30 million) will increase their spending on luxury goods and services. However, 21 percent of consumers with a net worth of less than $10 million plan to decrease their spending on luxury goods and services.
"The Elite Traveler Affluent Consumer Survey further confirms that the
Super Rich remain insulated from the economic woes that have forced even the mass affluent consumer confidence levels to an all time low," said Douglas Gollan, president and editor-in-chief of Elite Traveler and
co-author of The Sky's the Limit, Marketing to the New Jet Set.
Does cost matter? As expected, the Super Rich are not price sensitive
as only 7.4 percent report an increase in the cost of luxury products as
playing a role in their purchasing decisions. However, almost half of the
Mass Affluent consumers surveyed said cost is a deciding factor when
purchasing luxury goods and services in this current uncertainty.
Although most consumers shop around to find the best deal when purchasing an expensive product, that rule does not seem to apply to the Super Rich. Less than 10 percent of Super Rich consumers said they would take more time to purchase a luxury product this year but would otherwise make speedy impulse purchases. Twelve percent of Rich consumers reported an increase in the time they would take to make a luxury purchase, while 34 percent of Mass Affluent consumers would spend more time making a purchase as they balance economic uncertainty and higher costs for everyday expenses.
For the Super Rich: It's Better to Give
Nearly 70 percent (69.1 percent) of the Super Rich say they will increase their charitable giving this year, realizing their support is needed now more than ever to offset cut backs from those who have felt the pinch from a weakened economy. At the same time, 47.6 percent of the Rich will increase their charitable giving. Only 13.9 percent of the Mass Affluent will give more in 2008.
"With the Super Rich increasing their charitable giving, the good news for luxury providers is that the Super Rich believe it is O.K. to reward themselves by continuing and in fact increasing their spending on watches, jewelry, luxury autos, fashion and the like," said Gollan.
