Trend Highlights: American Express Luxury Summit 2008
Having just returned from this exceptional American Express conference - exceptional content and conversation delivered in the exceptional environment of the Four Seasons Westlake Village Hotel in California - I immediately wanted to share some top line insights with all of you.
We will post more findings, and considerable color commentary from the
2008 Affluence and Wealth Survey, conducted by American Express
Publishing and The Harrison Group in coming days, but here is our
preview personal filing:
Concern about the economy, and its impact upon luxury goods
and travel purchases, was certainly top of mind. Dr. Jim Taylor of the
Harrison Group, thought there would be an 8-10% drop in expenditures
this year. How long could it last? Taylor’s hopeful guestimate was that
by year-end things would be better again, nonetheless echoing Amex
Publishing CEO, Ed Kelly’s comment that “It’s not about the money, but the mood.”
How
are consumers responding to the new environment? Paraphrasing Ed
Kelly’s opening remarks, people are searching for greater certainty in
their shopping experiences — the certainty of excellent value and
quality. And they are doing their homework to find it. They turn to
"Confident word of mouth” — people they trust and respect
Fact-based, not emotion-based magazine advertising, that offers small details of what makes something truly extraordinary
A combination of online and in-store shopping
“These customers are fully aware that they are your partners, not your
subordinates, in a transaction. They expect to be treated with a high
degree of appreciation for their willingness to engage with you. This
is the climate for excellence, and we are all being put to the test,”
Kelly added.
And now, for a few nifty nuggets-from the Harrison Research:
Word of mouth? Just 10% of affluent and luxury shoppers have an inordinate impact on others.
Savvy purchasing can increase the value of affluent household income by
over 35%, freeing up in excess of $100,000 in after-tax cash flow in
many of these households.
The top 10% of American households owns 71% of American wealth.
82% of affluent and wealthy individuals, asked about conspicuous
consumption said they believed in ‘stealth wealth’—having money, but
keeping it under the radar.
Day-to-day running of upscale households is often managed by the female
head of household, and the "home executive team" is populated by the
children of the family. They are deeply involved because parents value
their opinions and the shared experience of decision-making. Parents
learn that "their kids are often more familiar with brands,
particularly luxury brands, because they have been exposed to them
throughout their lifetime," said Cara David, a co-director of the study
and senior vice president, strategic insights, marketing and sales,
American Express Publishing.
COMING NEXT WEEK in Luxury Travel 360 - Surviving Luxury 2008 and
Beyond: a Summit Presentation by Robert Frank, Wealth Reporter for the
Wall Street Journal and author of Richistan: A Journey Through the
American Wealth Boom and the Lives of the New Rich.
PLUS-More depth and Insights from Harrison Survey & Jim Taylor
Nat Ives, in Ad Age Online Sept 6, cites new data from Ipsos MMR which assures that well-off readers read print publications just as much now as they did 5 years ago.
Also, survey respondents making more than $100,000 annually said their average hours online had grown to 22.1 each week from 10.7, while the time they said they spent watching TV sunk to 18.6 hours from 23.7 in the 2003 survey. Read the full Ives story at http://adage.com/mediaworks/article?article_id=130685. Lux 360 attended the client briefing this week and will provide additional perspective in our Sept. 30 issue, interviewing Ipsos MMR President Bob Shullman.