What are the luxury spending preferences of the highest net worth consumer
By Donald Liebenson
Spectrem’s Millionaire Corner
July 1, 2013
Despite an improving economy, the highest net worth consumer is reigning in spending on luxury items, and plan to use discretion with their discretionary income. according to a recent Luxury Institute survey.
Of the more than 500 millionaires with a net worth of at least $5 million surveyed, more than 80 percent aid that such purchasing luxury items as jewelry, watches and handbags is not as high a priority. Among these highest net worth consumers, noted Luxury Institute CEO Milton Pedraza in a statement, “luxury goods and services are considered less important in today’s economy.”
Just 6 percent said they expect to spend more on handbags through the end of the year and 4 percent said they will increase their spending on watches and jewelry.
Respondents said that their non-luxury spending has increased by almost half. The trend of “less is more,” the survey found, applies not just to luxury goods but also household items and clothing. The highest net worth consumers, Pedraza said, are not as resistant to shopping at big box or chain retailers.
What is of increasing value to the highest net worth consumers is creating experiences and lasting memories. One-third of respondents said they plan to spend more on travel.
In a fourth quarter survey conducted by Spectrem’s Millionaire Corner of investors with a net worth of at least $25 million, the highest percentage of these highest net worth consumers were more likely to spend up to $10,000 annually on entertainment ranging from cultural events (56 percent) to sporting events (52 percent), with less than half spending that amount on clothing (48 percent) and jewelry (46 percent).
Not that these consumers are less loyal to their cherished brands. Another Luxury Institute surveyed highest net worth consumers about the luxury brands they do buy and with whose salespeople they have developed the closest relationships. When it comes to jewelry, Tiffany & Co. is the brand ultra-wealthy women buy most, followed by David Yurman and Cartier. Tellingly, these are the three top jewelers where ultra-wealthy women have a preferred salesperson.
In women’s fashion and accessories, the preferred brands are Michael Kors (36 percent), Prada, Burberry, Louis Vuitton, Chanel, Gucci, and Mark Jacobs.
Among men, Ralph Lauren and Brooks Brothers are the men’s fashion and accessories brands of choice.
The highest net worth consumers most appreciate from their sales people a comfortable environment, honest communication, trust, being personally recognized and handwritten thank you notes.