Affluent Shoppers May Drive Online Holiday Sales

Michael Garrity — Mon, 31 Oct 2011 19:35:00 GMT

Despite the consistently depressing news about the state of the economy as a whole, the National Retail Federation (NRF) is still predicting a 2.8-percent increase in holiday retail sales in 2011, thanks in large part to the influence of affluent shoppers.

The increase, however, is smaller than the 5.2-percent gain seen in 2010. Last year's holiday season also saw a greater lift in the number of visits to online retail sites than in sales, meaning that many users were visiting these retailers just to research product and store information.

Past Performance
These predictions from the NRF come from studying the data garnered from the Retail 500 companies during the 2010 holiday season. During the week of Thanksgiving and Black Friday last year, visits to these sites spiked 8 percent. The week of Cyber Monday saw an increase of 11 percent.

However, consumer feelings on the current economic climate are more negative now than they have been in the last two years, which obviously worries retailers.

Things are Looking Up
Never fear, though, because the NRF is reporting that "traffic to online retailers has grown with visits up 10 percent year-over-year for the week ending October 23, 2011."

This is a considerable amount of growth at any time, but it is especially promising with the holiday season right around the corner. What is important to note is that 28 percent of this traffic is made up of the four most affluent "Mosaic Groups" over-indexed against the population.

These groups are the Power Elite (household incomes of $125K+), Flourishing Families ($75K-$250K), Booming with Confidence ($75K+) and Suburban Style ($75K-$175K). Increased interest in online shopping by this more prosperous segment of the consumer population could likely be the driving force behind another lift in online sales during the 2011 holiday season and, as such, should be targeted appropriately by Internet marketers and retailers.

Targeting the Affluent Through Digital Advertising

Michael Garrity — Tue, 02 Aug 2011 17:40:00 GMT

Advertisers have long been puzzled by how to get rich people to respond to their work. Traditionally, the wealthiest American consumers, which usually means those who live in homes that bring in at least $100,000 in annual incomes, are the hardest group for marketers to reach through media like television or radio, but a recent study released by the Interactive Advertising Bureau (IAB) shows that these consumers are flocking to embrace digital media, and the ads that come with it.

Attracting affluent consumers through online advertising is critical for two reasons. According to the survey, affluents currently comprise 21 percent of US households, but own 70 percent of all consumer wealth and spend 3.2 times more than other Americans on their purchases.

In addition, they are also far more technologically savvy than their counterparts. Currently, 98 percent of affluent customers use the Internet, while only 79 percent of the general population is online. Comparatively, affluents spend 26.2 hours on the Web, and only 17.6 watching television and just 7.5 listening to the radio. The general population, however, spend 34 hours watching television and 16 listening to the radio, while spending just 21.7 hours on the Internet. Affluent consumers are also twice as likely to own smartphones and nearly 80 percent of affluent Americans polled said that they have become "intertwined with technology" over the past decade.

"Affluents have long been one of the hardest to reach and most important consumer groups," said Sherrill Mane, Senior Vice President of Industry Services, IAB. "They're now more important than ever - not only do they control most consumer spending power, but they may be the key to leading our economy out of the recession. And the new research shows that when it comes to digital media, the old paradigm has been superseded: the wealthiest Americans use digital media far more than their less affluent counterparts.”

The study in question, which was conducted for the IAB by Ipsos Medelsohn, who have been surveying the affluent market since 1977, found that not only does this affluent target group use the Internet more, but they are also more likely to recall ads that they see. They also tend to be more award of advertised brands, products, and services. In the survey, 88 percent of affluent customers recalled being exposed to at least one digital advertisement in the previous week, compared to just 84 percent of non-affluent users. Moreover, affluents could remember 21.1 ads on average, whereas non-affluents only recalled 20.2.

IAB also reported that affluent consumers were more likely to be aware of new products, companies, and websites after seeing digital ads for them.

Perhaps most importantly for advertisers, however, is that 59 percent of affluents in the study said that they took action based on a digital ad that they had seen over the past six months.

"While that number doesn't differ significantly from other Internet users, it is of great significance to advertisers seeking to reach this elusive, yet important, market segment," said Mane. "The combined reach, exposure and influence of digital as an ad vehicle to affluent households is simply unprecedented."

Affluents were also reported as being more likely than non-affluents to share information about themselves in order to "get a more customized online experience." What they really want, according to the study, is a customized experience that contains ads relevant to their current shopping interests, no matter where they are scouring the Internet.

“Affluent consumers have increasingly come to desire relevant and customized experiences, in part because they are living technology-infused lifestyles,” said Bob Shullman, President of Ipsos Mendelsohn. “Virtually all the affluent are online. Their ownership of tablets and e-readers has increased by 50 percent over the past six months, and shows every indication of continued growth. They have come to expect the benefits of digital media, even if it doesn’t alleviate all work-life pressures.”

Armed with this new information, advertisers and businesses can now try to find new ways into the pocketbooks of America's most wealthy.

'Net Features : affluent consumers

Affluent Shoppers May Drive Online Holiday Sales

Targeting the Affluent Through Digital Advertising