CONSUMERS

Wealthy Americans to Disappoint U.S. Retailers

by

Ron Kurtz

|

This is the featured image caption
Credit: This is the featured image credit

Ron Kurtz, president of American Affluence Research Centre, believes that confusing holiday season spending estimates may disappoint U.S. retailers

Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.

PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.

In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”

The Fondation Cartier pour l’Art Contemparain building in Paris

Ron Kurtz, president of American Affluence Research Centre, believes that confusing holiday season spending estimates may disappoint U.S. retailers

Bulgari Christmas lights on 5th Avenue, New York

Various research firms and organizations have made forecasts of holiday sales growing by 3% or more over 2011 sales. With holiday sales accounting for up to 40 percent of yearly sales volume (National Retail Federation) and 25 percent of annual retail profits (International Council of Shopping Centres), there is evidence that retailers (75% of which expect a sales increase per the Hay Group) may be disappointed by actual sales results.

The different methodologies and assumptions used to develop the sales forecasts make it difficult to find a consensus on what may actually happen, somewhat like the political polls just prior to the election. The affluent consumers may be the most likely to disappoint the retailers, as they are the big spenders and those least likely to use credit and debt to finance gift purchases. The consequences of Hurricane Sandy in the northeast are also likely to reduce total spending.

“ The consequences of Hurricane Sandy in the northeast are also likely to reduce total spending ”

Spectrem’s Millionaire Corner reports that only 66% of investors and 83% of CEOs among the affluent plan to give a gift to their spouse. In total, about 70% of the affluent surveyed by Spectrem say they will spend the same on holiday gifts as in 2011, while 15% say they will spend less and 14% say they will spend more.

The Affluent Market Tracking Study #22, the latest in a series of twice yearly surveys of the wealthiest 10% of U.S. households by the American Affluence Research Centre, also reports that 71% of those surveyed say they will spend the same on holiday gifts as in 2011, but 23% say they will spend less and only 6% say they will spend more. Understandably, those with a more positive outlook about the economy and their personal financial situation are most likely to have the strongest spending plans.

Research for American Express by the Harrison Group suggests the wealthiest 10% will increase holiday gift spending by 22% while all others will spend about 11% less. This indicates a decline in total gift sales of 7.2% but some reports about the research include an estimate of a decline of only 3.4% in total sales.

“ 66% of investors and 83% of CEOs among the affluent plan to give a gift to their spouse ”

Research for the National Retail Federation by BIGresearch suggests an overall increase of 4.1% in total holiday sales. However, the portion represented by gift purchases is forecast to increase by only about 1% to $549. This is about a quarter of the average gift purchases of the affluent estimated by Spectrem and the American Affluence Research Centre.

Final sales results will be largely determined by the actions of the wealthiest 10% of U.S. households, based on net worth. These 11.4 million households represent almost half of total consumer spending.

Their mood and spending plans are often influenced by changes in the stock market, which was moving in the wrong direction sin the week following the presidential election. Unity Marketing, prior to the election, forecast a 4% to 5% increase in holiday sales if Romney won and a 2% to 3% increase if Obama won.

Why Luxury Brands Should Target the Top 1%
Affluent Americans to Increase Spending During 2012 Holiday Season
High Net Worth Individuals Err on the Side of Caution

Ron Kurtz
Ron Kurtz

President and Owner

Prior to starting AARC in 2001, Ron’s experience included 20 years in executive positions in the airline, cruise, and hotel industries and 13 years as a strategic marketing consultant. A frequent writer for trade publications and speaker at industry functions, Ron is often quoted in the media as an expert on the affluent market and the travel industry.

CONSUMERS

Wealthy Americans to Disappoint U.S. Retailers

by

Ron Kurtz

|

This is the featured image caption
Credit : This is the featured image credit

Ron Kurtz, president of American Affluence Research Centre, believes that confusing holiday season spending estimates may disappoint U.S. retailers

Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.

PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.

In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”

The Fondation Cartier pour l’Art Contemparain building in Paris

Ron Kurtz, president of American Affluence Research Centre, believes that confusing holiday season spending estimates may disappoint U.S. retailers

Bulgari Christmas lights on 5th Avenue, New York

Various research firms and organizations have made forecasts of holiday sales growing by 3% or more over 2011 sales. With holiday sales accounting for up to 40 percent of yearly sales volume (National Retail Federation) and 25 percent of annual retail profits (International Council of Shopping Centres), there is evidence that retailers (75% of which expect a sales increase per the Hay Group) may be disappointed by actual sales results.

The different methodologies and assumptions used to develop the sales forecasts make it difficult to find a consensus on what may actually happen, somewhat like the political polls just prior to the election. The affluent consumers may be the most likely to disappoint the retailers, as they are the big spenders and those least likely to use credit and debt to finance gift purchases. The consequences of Hurricane Sandy in the northeast are also likely to reduce total spending.

“ The consequences of Hurricane Sandy in the northeast are also likely to reduce total spending ”

Spectrem’s Millionaire Corner reports that only 66% of investors and 83% of CEOs among the affluent plan to give a gift to their spouse. In total, about 70% of the affluent surveyed by Spectrem say they will spend the same on holiday gifts as in 2011, while 15% say they will spend less and 14% say they will spend more.

The Affluent Market Tracking Study #22, the latest in a series of twice yearly surveys of the wealthiest 10% of U.S. households by the American Affluence Research Centre, also reports that 71% of those surveyed say they will spend the same on holiday gifts as in 2011, but 23% say they will spend less and only 6% say they will spend more. Understandably, those with a more positive outlook about the economy and their personal financial situation are most likely to have the strongest spending plans.

Research for American Express by the Harrison Group suggests the wealthiest 10% will increase holiday gift spending by 22% while all others will spend about 11% less. This indicates a decline in total gift sales of 7.2% but some reports about the research include an estimate of a decline of only 3.4% in total sales.

“ 66% of investors and 83% of CEOs among the affluent plan to give a gift to their spouse ”

Research for the National Retail Federation by BIGresearch suggests an overall increase of 4.1% in total holiday sales. However, the portion represented by gift purchases is forecast to increase by only about 1% to $549. This is about a quarter of the average gift purchases of the affluent estimated by Spectrem and the American Affluence Research Centre.

Final sales results will be largely determined by the actions of the wealthiest 10% of U.S. households, based on net worth. These 11.4 million households represent almost half of total consumer spending.

Their mood and spending plans are often influenced by changes in the stock market, which was moving in the wrong direction sin the week following the presidential election. Unity Marketing, prior to the election, forecast a 4% to 5% increase in holiday sales if Romney won and a 2% to 3% increase if Obama won.

Why Luxury Brands Should Target the Top 1%
Affluent Americans to Increase Spending During 2012 Holiday Season
High Net Worth Individuals Err on the Side of Caution

Ron Kurtz
Ron Kurtz

President and Owner

Prior to starting AARC in 2001, Ron’s experience included 20 years in executive positions in the airline, cruise, and hotel industries and 13 years as a strategic marketing consultant. A frequent writer for trade publications and speaker at industry functions, Ron is often quoted in the media as an expert on the affluent market and the travel industry.

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