The US still likes its luxuries
US consumer confidence is high, supported by a strong economy. We’ve again asked wealthier Americans how they’re spending their money and the answer is fashion, smartwatches and wine, plus more travel.
We surveyed about 2,000 people with household incomes of USD100,000 or more, 59 per cent of them female and 60 per cent aged under 35. Half live in New York, California, Texas or Florida.
More than half have bought luxury goods in the past and plan to buy more this year; 8 per cent expect to make their first luxury purchase in 2020. Some 43 per cent plan to increase their spending on these products: that compares with just 27 per cent in our previous survey a year earlier.
Top of the shopping lists are shoes, followed by clothing, cosmetics and jewellery. People are cutting back on watches and luggage – though 73 per cent say they are likely to wear a smartwatch. And over 20 per cent would consider buying a second-hand premium-brand handbag.
Our latest survey found 78 per cent of respondents expecting higher incomes this year and only 3 per cent anticipating a decline. What makes them most nervous are healthcare and medical bills, followed by debt and job security.
However, environmental and climate-change fears came ahead of other issues and 77 per cent say they have bought products advertised as sustainable. That was 55 per cent in our last survey. The under-35s are most likely to spend more on sustainable products but nearly two-thirds of our whole sample said they would pay a premium for glass rather than plastic packaging.
Almost 30 per cent said they are eating more plant-based foods and less animal proteins, but the 7 per cent saying they had become vegetarian was largely offset by vegetarians who had lapsed.
Two-thirds of our sample claim they are likely to buy an electric vehicle, even though these cars constitute less than 2 per cent of the US market. Just 23 per cent of women are ‘very likely’ purchasers but 64 per cent of men give it that priority – possibly because electric-vehicle marketing in the US is aimed at men.
Almost half our respondents upgrade their smartphone within two years, but adopting 5G ranks below the battery life, camera and memory. Some 84 per cent expect to pay more than USD500 for a phone; 65 per cent more than USD1,000.
Family and friends are the key influence for finding out about luxury brands for 51 per cent of our respondents, ahead of visiting stores and shopping malls. Traditional advertising is more important than social media. Department stores are more popular than online shopping with full-price brand stores least favoured.
Quality was cited as a reason for choosing luxury by 42 per cent of buyers; 20 per cent said it makes them feel better, 12 per cent consider it most fashionable, 8 per cent are following celebrities’ purchases. But 9 per cent don’t buy more because they feel vain.
However, if our sample had more money they’d spend it on travel rather than more apparel, fashion accessories or bags. Saving for retirement ranked second, followed by paying off debt.
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The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s) whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the covering analyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) or issuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and any other views or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Alexis Cooper, Erwan Rambourg
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