NEW YORK — Wealthy consumers appear to have adopted a penny-saved, penny-earned mentality, according to WSL Strategic Retail’s survey of shoppers. Those with incomes of more than $100,000 are reining in spending, especially when it comes to relatively inexpensive items such as CDs, take-out foods and specialty coffees. The thinking is that savings on popular items will leave more discretionary income for expensive purchases.
This story first appeared in the May 15, 2003 issue of WWD. Subscribe Today.
“Even the wealthiest consumers are looking at almost any price point and saying, ‘Do I really need this?’” said Wendy Leibmann, president of WSL. The other criteria is whether there’s anything new and interesting in a product category. If the answer is “no,” consumers aren’t buying.
“There are interesting trade-offs,” said Leibmann. “For example, a coffee or a magazine. The notion that even high-income shoppers will give up on something that costs $3.25 shows a mind-set where people are being very cautious and concerned. They’re saying that any type of savings will help. It runs the gamut of all income groups and reflects a general malaise.”
When it comes to fashion, women are looking in their closets and finding that they have plenty to wear, even if it isn’t brand new, Leibmann said. As for major purchases, one-third of respondents are postponing them, while another third are browsing more and buying less.
In addition to asking consumers where they’re cutting spending, WSL asked them where they shop. The answers revealed an opportunistic consumer with little loyalty to any one channel and a penchant for cross-shopping. During the past holiday season, 82 percent shopped at mass merchants and 58 percent at warehouse clubs.
“High-income consumers are shopping at mass retailers, discounters, supercenters and warehouse clubs at almost the same incidence as lower-income shoppers,” Leibmann said. “In our biannual How America Shops study, we’ve been seeing that it’s the thrill of the hunt and the satisfaction of being a smart shopper that motivates them. They know when to shop where.”
The wealthy have also discovered dollar stores. According to WSL, 53 percent of the affluent group shopped this venue during the holidays.
“They’re very comfortable shopping there,” said Leibmann. “It’s the democratization of shopping.”