- Luxury shoppers are highly coveted customers for brands and retailers. The top 10% of US household earners (those taking home $120,000 or more annually) account for approximately half of all consumer expenditures.
- Discretionary spending among the wealthy is growing faster than for the average US consumer. Discretionary spending among those earning $120,000 a year or more is expected to increase 6.6% in 2016, reaching $406 billion, according to YouGov. Among the top 1%, it's expected to rise 10%. By contrast, discretionary spending for the average US consumer dropped 1% between 2014 and 2015.
- Wealthy consumers are expected to spend the most next year on fashion, travel, and dining. Among these categories, spending on fashion (specifically, apparel, accessories, and handbags) will grow the most, increasing 6.9% to $37.4 billion (roughly 9% of total discretionary spending).
- Luxury brands are over-allocating ad spend to print media. The seven largest US luxury brands collectively spent $133 million last year on holiday ad spending, 57% of which was allocated to magazine ads, according to Shullman Research Center. But among luxury shoppers, recall rates are higher for digital ads.
- There are signs that luxury shopping is less brand- and status-oriented than it once was. Luxury shoppers, like the average consumer, enjoy the convenience and low prices of online retailers like Amazon vs. shopping via official brand sites. Luxury shopping may become even more price-sensitive as millennials age.
This report profiles the luxury shopper. It looks at the spending habits and preferences of this high-income demographic, including how and where they shop. Their growing preference for online shopping, which is changing the face of luxury retail, has significant implications for how brands target luxury consumers.
Profile of the luxury shopper
Not all affluent consumers are luxury shoppers, but all luxury shoppers are affluent. For our purposes, to qualify as a luxury consumer, a household must have $120,000 or more in annual income. This income bracket falls within the top 10% of US earners, who account for approximately half of all US consumer expenditures.
Discretionary spending among this income bracket is expected to increase 6.6% in 2016, reaching $406 billion, according to YouGov (Note: This includes spending on retail and travel). Spending among the top 1% is expected to increase 10%. Meanwhile, discretionary spending for the average US consumer actually decreased 1% between 2014 and 2015, [...]