Turns out, in many ways affluent shoppers are just like other consumers — except they have more money to spend.
In two research reports today, the shopping behavior and buying power of consumers was analyzed with the goal of helping marketers get a better understanding of today’s consumers. The findings in both reports reflect the preferences of the so-called “mass affluent,” who have annual incomes of more than $100,000 and represents a demographic that has seen significant growth in the U.S. over the past four decades.
In the Synchrony Financial Affluent Study, Sue Yasav, vice president of thought leadership and market insights at the firm, said, affluents “generally skew male, older and are more likely to be married. They are not only highly educated and optimistic about the future, they are both upwardly and physically mobile. They love to travel and are more likely to say they will travel in the future. While all income levels say they are devoted to their families and put their children’s well-being and education as a top priority, affluents are more likely to be optimistic about the future.”
Based on a study of the mass affluent, Yasav came up with several strategies retailers can use to “attract this growing segment, based on their desires, needs and wants.”
Yasav noted that “consumers at all income and age levels value experiences more than things” and that is not limited to affluents or Millennials. “About 68 percent of all income segments say they plan to spend more on experiences in the future,” she said. “The difference is the amount they are willing to spend on these experiences.”
The study showed that 86 percent of high-net-worth respondents polled — those with incomes of more than $250,000 — and 76 percent of mass affluents “say they would pay more for experiences they feel are valuable.”
Yasav said some retailers “seem to be paying attention” to these preferences by “creating experiences” in their stores. “Some are transforming their stores into a fun, interactive experience,” Yasav said. “For instance, the Urban Outfitters stores in New York City, Los Angeles and Austin have bars and restaurants as part of the store. And, they don’t discourage walking around with a drink in your hand. Barnes & Noble also plans to open concept stores in 2017 that offer a full breakfast, lunch and dinner, with waiter service, right in the stores. Add this to the rock-climbing walls at REI and cooking demonstrations at Williams & Sonoma and it appears to be a trend that’s catching on.”
Other findings in the report included an affluent consumer preference for higher-quality products. They are also keen on bargains. “Affluent consumers purchase a wide variety of items, from a wide variety of retailers,” Yasav said. “While they are more likely to be the ones shopping at upscale brands, they are also treasure-hunting at T.J. Maxx and Marshalls. As a result, the customer experience is an important element in the enjoyment of the shopping experience.”
In the report from Viant Technology LLP (an advertising technology firm), researchers compared the consumers of three department stores (Kohl’s Corp., Macy’s Inc. and Nordstrom Inc.) and found that 41 percent of Nordstrom shoppers had annual incomes of more than $100,000, which compares to 35 percent at Macy’s and 29 percent at Kohl’s.
“Historically, department stores have played an enormous role in American shopping, with iconic retailers like Macy’s as the quintessential anchor tenant in every major shopping mall,” the authors of the report said. “However, with American buying power still suffering from the 2008 recession and sharp shifts in shopping habits due to a housing market recovery and a new generation of tech-savvy Millennial shoppers, department stores are facing tough times.”
Subsequently, gaining insights into department store consumers can help inform marketing strategies for brands and retailers. Viant’s research showed that Nordstrom shoppers tended to drive BMWs over other car brands and were 57 percent male, which compares to 50 percent split between genders at Macy’s who had Toyotas in their garages. At Kohl’s, 53 percent were women, and tended to drive Chevrolets.
And when it comes to beverages, Nordstrom and Macy’s consumers favored Starbucks, while Dunkin’ Donuts was the preference for Kohl’s shoppers. For beer, the Kohl’s shopper favored Bud Light while the Macy’s consumer has a hankering for Heineken. And at Nordstrom, Sam Adams was the top beer choice.