Affluent households – representing the top 10% of American wage-earning households – will be responsible for 23% of the total 2011 holiday spend ($68.74 billion) this season. However, gift-giving budgets of affluent families are down, resulting in an overall decline of $1.04 billion (a 6.1% drop) in gift-giving intentions among affluent and wealthy families, compared to 2010. (Photo courtesy of Tupungato/Shutterstock.com)
This decline is led by those with discretionary incomes of $100,000 to $250,000 whose holiday spending budgets are projected to be 17% lower than in 2010. Conversely, expenditure on gifts will be up 7% (to an average of $2,708) among those at the very top of the income spectrum, with discretionary incomes of $250,000 or more. What does this suggest?
According to Dr. Jim Taylor, Vice President of the Harrison Group, the company that did the research, declines among the affluent population are not the result of increased anxiety over personal financial situations, as their financial situations have improved. Twenty-nine percent of affluent consumers report that their household income is up over last year and 30% say the same about their assets.
Eighty-four percent say they are confident that they have the financial resources to weather a continuation of the recession or a double-dip recession. With these stats, why would traditional gift-giving intentions decline? This is where the research gets interesting, as it suggests there is a change in what is defined as meaningful in the gift-giving realm.
Dr. Taylor says, "After four plus years of reprioritizing and realigning their spending to match their values, affluent consumers are feeling quite good about themselves and their ability to maintain – and even increase – their family’s happiness and well-being. Expressions of happiness are being increasingly decoupled from the desire to acquire more and more things. The search for the holiday spirit no longer centers on the search for ‘stuff’ – it resides in family and in simplicity."
In fact, 84% of affluent Americans indicate that they are determined to make this holiday season a great one for their family. Eighty-one percent say that the best part of the holidays is spending time with the people they care about, versus either giving (15%) or receiving gifts (3%). Fifty-seven percent of affluent consumers say they are looking to buy fewer gifts this holiday season. Among the 14% who say they are trimming their gift budgets, 57% say this is because they "just don’t need as much stuff."
For the majority of affluent consumers (69%) the gifts they buy need to have "lasting, enduring value." It would seem that, at least for some, great experiences fit the bill. One in three are planning to take a special trip this holiday season as a gift for their family; one in five would like the gift of travel as a gift for themselves and 13% would like a gift certificate to a restaurant. Furthermore, 28% of all affluent consumers are looking to "splurge on a special holiday gift" for their family – a rate that rises to 40% among the wealthiest consumers, with discretionary incomes of $250,000 or more. (Photo courtesy of Abercrombie & Kent)
The data reported above was part of a re-contact study from the 2011 Survey of Affluence and Wealth in America. For this study, Harrison Group conducted follow-up interviews with 769 respondents from the initial wave of the Survey of Affluence and Wealth in America in Q1 2011. The 20-minute survey fielded from September 18 to 26, features participants with a minimum discretionary income of $100,000. Income groups represented and analyzed in the study include Upper Middle Class ($100,000 - $150,000 household discretionary income), Affluent ($150,000 - $249,000), Super Affluent ($250,000 - $499,000) and Wealthy ($500,000+).
