Research shows that in the post-recession era, wealthy Americans are more inclined to wait for items to go on sale before making purchases. Brand names mean less to them, marketing has less influence as well, and the number of well-off shoppers who say they trust salespeople has plummeted. In other words, the rich today are more likely to do basic stuff that smart, savvy consumers have been doing for years.
Focusing on the fashion industry and luxury goods in particular, the WSJ rounded up a bunch of data that all points to the conclusion that that the rich—even if they haven’t been dramatically affected by the economic crisis—are more cautious about shopping and spending lately. Much of the research is provided from a study conducted by American Express Publishing and the Harrison Group, which offers figures such as:
In Harrison Group’s first-quarter survey of consumers with a median income of $275,000, 38% said they wait for items to go on sale, versus 31% in 2010.
Likewise, whereas in 2008 51% of wealthy people agreed with the statement “I am willing to spend more for designer brands because they are the most stylish and fashionable,” now only 32% agree with that sentiment. Somehow, a few years back, nearly half of those surveyed said they trusted salespeople. (Really? What were they thinking?) But today, just 2% of wealthy shoppers trust salespeople.
So what happened? Did the recession cause even the rich to feel the need to tighten their belts and restrict their spending for the long-term? Are they worried about their fortunes?
Not likely. Instead, it seems like the recession first made it trendy to be money conscious. Then, as retailers grew increasingly desperate, they resorted to all sorts of discounts and schemes to get shoppers in the door. What with the ubiquity of retailer special offers and the widespread daily deal craze, the “new normal” has become 50% off. Today, there is such a proliferation of deals, promos, and store loyalty programs that it seems genuinely possible to never pay retail for anything, ever.
Even the rich had to be conscious of these trends enough to pause and think, “Hey wait a sec. Maybe it’s really stupid to buy something I only sorta like, and that I probably won’t use much, and that I know will be much cheaper in a few days anyway.”
Most wealthy people are pretty bright—that’s often a big reason they got rich in the first place—and, even if it doesn’t seem like it sometimes, they care about value, about getting the most for their money. Their favorite stores, according to surveys are Target and Costco, not Tiffany and Williams-Sonoma.
What the recession and its fallout taught consumers everywhere is that for years they were overspending on stuff that was overpriced and not remotely essential. Today, even if you have the money to spend, you have to realize it’s silly to waste it like everybody did circa 2007.