It’s not the most uplifting news of the week, but retailers should brace themselves: A new Unity Marketing survey shows that the nation’s affluent consumers have little confidence in the country’s financial heath, and that could translate to disappointing holiday sales.
In a survey conducted in early October, more than 1,200 affluent consumers (with average incomes of $267,000) were queried about their expectations for spending and holiday shopping, along with details about recent purchases and shopping behavior. The top 20 percent expressed a cautious outlook toward fourth-quarter spending, and half of all those surveyed said “the overall financial health of the country is worse now than it was three months ago,” according to a Unity Marketing release. “This important measure of affluent consumer confidence hasn’t been this low since the recession of 2008 and 2009,” stated the Stevens, Pa.–based firm.
“Given affluents’ concerns about their financial status, retailers will have to pull out all the stops in terms of promotions and discounting this season to attract these shoppers, as the most important feature these affluents say they will look for when choosing a gift is to find it on sale or at a deep discount,” explained Unity Marketing president Pam Danziger.
A second important criterion for gift purchases: that items are made in the United States.
More results are as follows:
Just 20 percent of those surveyed plan to increase luxury spending over the next 12 months, down from 31 percent a year ago.
Another 28 percent expect to spend less in the next 12 months, up from 18 percent last year.
Only 40 percent said their financial status would improve in the next 12 months, down from 52 percent during the same period last year.
Half of affluents surveyed said they felt the economy was headed in the wrong direction, compared with only 24 percent who felt this way a year ago.
A quarter of those surveyed will spend less this year on holiday gifts than they did last year, while only 18 percent expect to spend more. (The average amount affluents expect to spend on holiday gifts is $1,730.)
The categories where they’re willing to splurge: home electronics (especially high-end TVs and home computer systems); major appliances, bath fixtures and building products; and beauty products—known as the Lipstick Effect, where consumers forego luxury indulgences in favor of affordable pick-me-ups.
Contact Unity more information about the survey, or to view a webinar taking place on Nov. 13 that will shed additional light on the findings.