NEW YORK — Affluent Americans are having an identity crisis.

Members of that economic group — defined in a new Money magazine/RoperASW study as adults with annual income of $75,000 or more — overwhelmingly are rejecting the use of the word luxurious to describe their lifestyles. Instead, they view their way of life as independent and well-organized, see themselves as being confident and goal-oriented. They also are uncomfortable when luxurious is used to describe most of the high-end products they purchase, whether it be a $2,600 Dior Cleopatra dress, a $4,000 Viking range or a $133,000 Mercedes-Benz SL.

Yet these same individuals are hunting for high-end products, willing to pay more for the best, waxing optimistic about their financial future and actively planning savings and investments. In short, they are embracing a luxurious way of life.

“Affluent Americans resoundingly like the luxury lifestyle, but nearly all reject the luxury label,” Money managing editor Robert Safian told a group of roughly 300 brand marketers who gathered at the Lever House Restaurant here late last month to learn the results of the study, called “Affluent Americans and Their Money.”

In fact, just 2 percent of those polled described their lifestyles as luxurious and only 5 percent said luxury goods make them feel elite. Affluent Americans most commonly described themselves as family-oriented, with 71 percent using that description; casual, 41 percent, and traditional, 36 percent.

So, how can marketers of premium products, like high-end apparel, best connect with this new luxury consumer?

Most of the monied set said they are looking to luxury products for value, quality and everyday ease — not pampering and prestige, Safian related. Surprisingly, nearly two-thirds of those with annual income of $75,000 and up denied it makes them feel good to buy luxury goods and services, and only 26 percent said the word luxury described their favorite high-end brands. By comparison, “high quality” was considered an acceptable description by half of the respondents, and 45 percent considered “top of the line” appropriate.

Curiously, today’s upper-income earners prefer to define themselves as middle class and refute the notion that they seek luxury brands to feed their egos, found the study, which was developed by Money, fielded by RoperASW and surveyed more than 2,000 adults, ages 18 and older, with annual incomes of $75,000 or more. Roper administered the survey via direct mail and offered subjects two dollars to respond. Results were weighted to be demographically representative of that income group.By the study’s measure, affluent Americans account for 4.3 percent of adults in America and 4.5 percent of the country’s households.

“We are Puritan in our roots,” observed Michael J. Silverstein, executive officer of Boston Consulting Group’s office of the ceo, and one of five panelists who discussed marketing to the affluent following Safian’s presentation.

“In this country, people with incomes of $35,000, all the way up to $1 million, will describe themselves as middle class,” said Silverstein, author of the just-published, “Trading Up: The New American Luxury” (Portfolio, $26.95). “Affluent Americans will buy certain things at Costco or Wal-Mart, yet will spend $4,000 on a Viking range, even when a contractor will include a serviceable one with their home.”

Also, observed Money’s Safian, “most came from less affluent backgrounds and the term luxury seems to conjure up images of just the type of behavior they feel they want to avoid.” Those traits include elitism, stuffiness and snobbery.

Instead, for America’s affluent, money affords independence, security and comfort. Thus, maintaining a sense of control over their finances is important to them. Two-thirds of those surveyed agreed that “if they’re in control of their finances, they’re in control of their lives,” although just 23 percent of the respondents said they were debt-free.

The deeper people are into an affluent lifestyle — with more money in the bank and more luxury products in their homes — the more comfortable they are with the luxury label and the admission that it feels good to treat themselves to top-end goods and services, the Money/Roper research determined. Intriguingly, the wealthiest segment of those surveyed — those with annual incomes of $150,000 or more — did not report buying luxury brands more often than those with incomes between $75,000 and $149,999.

In addition, it appears that Americans of any economic stripe love a good deal: The perception of value wields the most influence over a wealthy consumer’s decision to transact a luxury purchase, with 75 percent saying it affects their choice a lot.

But value isn’t defined by price. For the well-heeled crowd, Safian reported, “quality is the most powerful determinant of whether a product is perceived as being a good value for the money. Nine in 10 said it’s worth spending more money to get the highest quality and 79 percent said it’s worth it to spend more for something they really want.” The affluent reported they’re willing to “spend more” for quality in seven of eight product categories, including automobiles, furniture, major appliances, small appliances, electronics, watches and jewelry, Safian noted. “Only when they’re shopping for apparel does [the consideration of] price win out,” he said.Apparel ranks fourth among the categories of luxury goods most often purchased by high-income earners, a group that does not buy premium brands across the board. Leading the luxe list in share of purchasers are major home appliances, with 53 percent saying they buy top products, followed by small home appliances, 52 percent; computers, 50 percent; apparel, 49 percent, and home furnishings, 48 percent. Men are most likely to rate luxury brands as being better than other labels, as 52 percent said so, versus 42 percent of women.

When intending to make a luxury purchase, the affluent do their homework, using traditional media and the Internet to learn about high-quality products. Indeed, 76 percent related they “spend quite a lot of time researching brands before making a major purchase,” and about eight in 10 reported their luxury purchases are planned rather than impulsive.

Although shopping’s popularity has gone south in the past few years, there’s good news for luxury marketers in the Money/RoperASW results: More than half of affluent Americans, or 56 percent, describe the activity as being fun and perceive it as a pleasure, rather than a chore. When it comes to enjoying the luxury goods they buy, almost all those surveyed — 92 percent — said they get more pleasure from material possessions if they get a good deal on them, and most agreed those deals aren’t easy to come by, especially on big-ticket items.

Further, purchasing a luxury item while it’s the latest thing is less important for affluent consumers than getting a good deal. Only 17 percent of the cohort maintained they buy what they want immediately, while 82 percent expressed a willingness to wait for high-end goods to go on sale before buying them.

This penchant for value doesn’t mean the affluent are clinging to economic life rafts. On the contrary, they remain optimistic about their financial future, despite recent concerns about job loss and declining stock market values, according to the new research. To wit: 83 percent stated they were satisfied with their financial position, up from 77 percent in 2002.

More broadly, 62 percent of affluent Americans acknowledged they were living the good life. Not surprisingly, there’s a difference in the degree to which that self-perception is held by those considered moderately affluent — with annual household incomes of between $75,000 and $149,999 — and by their wealthier cousins, with annual incomes of $150,000 and north. Three-quarters of the latter segment see themselves as living the good life, while 57 percent in the moderately affluent contingent possess that perception.Of course, the more money people have, the more they enjoy the pleasures it can bring. Thus, people in the higher-income group are more likely to state they need “a lot of money to live the life they want to live” than are the moderately affluent. When asked how to achieve the good life, though, affluent Americans noted it is important to “live within your means.” For example, nearly three-quarters, or 73 percent, agreed not carrying credit card debt month to month is very important in order to achieve the lifestyle they want.

At the same time, two-thirds of the poll’s respondents claimed the good life is not fundamentally about having a lot of money. A handful of nonfinancial considerations were cited as being very important in that regard: good health, named by 88 percent; close family, 82 percent, and time to enjoy one’s self, 64 percent.

Nonetheless, observed panelist and RoperASW ceo Ed Keller, “Recent Roper surveys show affluent consumers desire fine material things — even as they try to rebalance their lives and spend more time with friends and family, and in pursuits like traveling.” Roughly three-quarters of affluent Americans, or 76 percent, said buying “nice things,” like apparel, home furnishings and cars, is an important part of the lifestyles they want. Such purchases are being made by a consumer who’s increasingly discriminating about which items command the big bucks, Keller noted, adding: “We’re observing the phenomenon of trading in and trading out — spending liberally in one area, while forgoing others.”

STATISTICAL SNAPSHOT: AFFLUENT AMERICANS

  • Median age: 47; 63 percent are between ages 35 and 54.
  • Gender: divided equally between men and women.
  • Median annual household income: $121,000, versus $42,100 for the American public.
  • Share with annual household income of $150,000 or more: 25 percent.
  • Share of active investors: 50 percent.Note: Affluent Americans are defined as having annual household income of $75,000 or more.

SOURCE: MONEY MAGAZINE/ROPERSAW STUDY, JUNE-JULY 2003

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