What would US citizens do with extra money? Around 40% would save for a long-term goal and a similar proportion would pay down debt. But more than half would take a holiday, while others prefer luxury purchases such as shoes, watches, jewellery or clothes.
That’s the message 2,000 US consumers with shared household income above $100,000. Our survey asked 50 questions on their spending, investment and attitudes towards environmental and social issues.
It’s not a representative view of the entire population: about 60% of respondents were millennials aged 21 to 34 – the generation most likely to drive luxury consumption – with another 60% women, and we focused on New York, California, Florida and Texas.
But we found that while US consumers are not opposed to spending, particularly on technology and luxury, value for money is a key driver. And local brands are often preferred, including for jewellery, technology and sporting goods.
Americans are even more confident than when we first surveyed them in January 2018, but 10 months later this new survey shows that translating into increased spending. Some 46% expect wages to grow by more than 2% over the next 12 months, compared to just 28% in January 2018.
On investment, while Baby Boomers bought their first mutual fund when they were almost 35, millennials and Generation X buy them before they reach their late 20s. Investors have a home bias however: 49% buy no international shares and only 10% invest in emerging markets.
Some 22% of millennial investors include environmental, social and governance funds or theme funds, compared to just 8% of over-55s. But the concern extends to spending too: 55% of respondents bought a product advertised as sustainable in the last year.
Men are just as keen as women but while 61% of the under-34s had purchased sustainable products, only 34% of over-55s had. And while 73% of men claim they were likely to purchase an electric car, just 50% of women agreed.
Over 80% of our respondents had purchased a luxury item in 2018 or planned to in 2019, with 74% increasing their spending - millennials and men most eager .
Some 43% of respondents purchase luxury primarily for the quality and 19% like the ‘feel good’ factor. Only 5% buy because celebrities use the product. Styles and designs are considered most important by 75%, price and promotions by 59%, and the prestige of the brand by 51%.
While about 40% of respondents said they’d spend less than $750 on smartphones, another quarter would go up to $1,000, and 20% up to $1,250 with 14% prepared to pay even more. That said, about half would prefer to spend the same as last time – but expect some upgrades.
The proportion of users replacing smart phones every year dropped from 22% to 18% since our first survey.
Elsewhere, 82% of our respondents drink wine and a quarter do not consume beer, most beer drinkers – including 45% of women – want more craft beers. Three-quarters of beer drinkers would like to drink more higher-priced, premium products.
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: Erwan Rambourg
Equities: Stock ratings and basis for financial analysis
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