Dr. Taylor observed, “The group to really watch is the Core Affluent. They are growing in size, boosting their spend and getting more and more comfortable with luxury brands as they do so.”


Harrison Group and American Express Publishing Project 

Consumer Spending on Holiday Gifts to be 7.7% Higher than 2012 Forecast
OCTOBER 2, 2013 (NEW YORK, NY) – Just-released results from the 2013 Holiday Forecast Study from the Survey of Affluence and Wealth in America, produced by American Express Publishing and Harrison Group, a YouGov company, show that this year, on average, consumers plan to increase the amount their households spend on gifts by 6.9% -- to $670, from a forecast of $627 in 2012.
The Holiday Forecast Study, conducted in September among 1,790 consumers, shows that spending plans vary across income groups included in the Study.  Additionally, the gift market forecast across all income groups is expected to climb 7.7% over last year, to $71.3 billion from a forecast of $66 billion last year.  The increase is due both to the modest increase in household spending plans plus the addition of roughly one million households to the U.S. economy, of which the vast majority (90%) will participate in holiday season gift-giving.  
Dr. Jim Taylor, Vice Chairman of Harrison Group and the Study’s Director, commented, “The recession substantially changed the attitude of America’s most active shoppers, especially the affluent.  They are resourceful, independent, fiscally prudent and prepared to button their wallet pockets when they see risks to their financial wellbeing.  We saw a significant reduction in spending last year during the holiday season when Hurricane Sandy, the “Fiscal Cliff” and the tragedy at Newtown severely affected spending during December.  While our forecast is up this year, we are starting the season with the government shutdown and the upcoming debt ceiling debate.  Thus, consumer buying intentions may well be curtailed.  We are monitoring the evolution of spending plans and expect to report accordingly.” 
Of the 1,790 respondents in the 2013 Holiday Forecast Study, 883 are in the 90% (that is, they live in households with under $100,000 in annual discretionary income) and 907 are in the Top 10% (households with annual discretionary income of $100,000 or more).  The Top 10% is further segmented into three groups:  the Upper Middle Class (340 consumers in households with annual discretionary income of between $100,000 and $149,000), the Core Affluent (348 consumers in households with annual discretionary income starting at $150,000 and annual household income under $450,000) and the One Percenters (219 consumers at the top of the income spectrum, earning $450,000 or more in annual household income). 
1.  While Harrison Group and American Express Publishing forecast a $66 billion gift-giving season in 2012, actual spending on gifts was estimated at around $55 billion.  The shortfall is largely attributable to a trifecta of events last December:  Superstorm Sandy, the debt ceiling debate and the Newtown, CT Sandy Hook School shooting.
Holiday Forecast
At the individual household level, those in the 90% expect to spend $532 on gifts (up 6.6% from last year’s forecast of $499), while the top 10% expect to spend $1,818 on gifts (up 7.7% from last year’s forecast of $1,688).  The differential among groups within the Top 10% is significant:  Upper Middle Class households plan to spend, on average, $1,014 (down 7.1% from last year’s forecast), Core Affluent households intend to spend $2,176 (up 10.9% from last year’s forecast) and One Percenters expect to spend $3,414 (down 3.3% from last year’s forecast).
Specific holiday spending trends include:
Total U.S. consumer spending on gifts this holiday season is estimated at $71.3 billion: 7.7% higher than last year’s forecast of $66.3 billion.
The 90% are expected to spend $50.6 billion, up 7.4% from last year’s forecast ($47.1 billion)
The Top 10% (also referred to as Affluent and Wealthy consumers) are expected to spend $20.7 billion, up 8% from 2012’s forecast ($19.1 billion)
The increases among consumers in the top 10% of the income spectrum are largely being driven by the Core Affluent group ($150,000 in discretionary income to under $450,000 in household income).  These consumers are expected to account for $12.1 billion in gift spending, up 32.7% from last year’s forecast.  This gain is driven both by an increase in the number of households in the category and by an increase in the dollar amount each household plans to spend.
Dr. Taylor observed, “While Holiday shopping will be conservative among the Top 10%, it appears that the 90% are opening their wallets as they return to more traditional holiday spending patterns after a dismal end to last year’s holiday season.  The group to really watch is the Core Affluent. They are growing in size, boosting their spend and getting more and more comfortable with luxury brands as they do so.”
Dr. Taylor cautioned that it is still early in the holiday season.  “We are kicking off the season with a government shutdown and another grueling debate over the debt ceiling coming up in October – so the message is one of caution.  Our advice is to take this holiday season one day and one customer at a time.” 
Trends in Gift-Giving
Holiday gift-giving trends will reflect not only the amount consumers want to spend, but also the role gift-giving plays in their lives and the mindset they bring to bear on the marketplace.  A full 81% of the Affluent and Wealthy agree that “gift-giving is a rewarding way for me to show people how much I care about them”; and 68% of Affluent and Wealthy consumers (up from 61% in 2012) say they are “looking to buy special gifts this holiday season that have lasting, enduring value.”  Moreover, many Affluent and Wealthy consumers are considering taking a special trip during the holidays (up to 35% in 2013 from 24% in 2012) and are interested in splurging on a special holiday gift for a spouse or significant other (35%).
Gift cards continue to top the list of gift-giving categories:  67% of Affluent and Wealthy respondents plan to buy them for others.  This includes gift cards to specific retailers (44%), gift certificates to restaurants (37%) and gift cards like an American Express or Visa gift card that can be used anywhere (23%).  Aside from gift cards, the top gift categories are expected to be:
Fashion apparel (49% of Affluent and Wealthy consumers plan on such purchases)
Toys (34%)
Books (34%)
Fashion accessories (26%)
Jewelry (25%)
Additionally, more Affluent and Wealthy consumers plan to buy fine fragrances or cosmetics as a holiday gift this year (up to 18% from 13% in 2012).
According to Cara David, Senior Vice President, Corporate Marketing and Integrated Media at American Express Publishing, “It is critical that marketers communicate with consumers in ways that reflect what consumers see as the most important part of the holiday:  time spent with loved ones.  In fact, three out of ten Affluent and Wealthy consumers tell us they want to increase the amount of time spent with friends; and the same percentage say they want to spend more time with immediate and extended families.  Last year, only about 15% voiced that desire.
Shopping and Service Trends
The Holiday Forecast Study also finds that holiday shopping online continues to grow in popularity, as mobile devices gain traction among consumers.  Twenty-three percent of the Affluent and Wealthy plan to do more online shopping this year (up from 18%, in 2012); and among tablet owners, 45% intend to shop on the device, an increase of 15% over a year ago (39% in 2012).  
According to Dr. Taylor, “As access to public Wi-Fi and mobile data services improves, the role of the salesperson to inform, guide and facilitate a transaction will have been essentially outsourced to the smartphone.   This year, half the men who own a smartphone say they use it while shopping, up from 41% in 2012.  Forty-seven percent of women who have a smartphone do so, too.”  
The year-to-date findings of the Survey of Affluence and Wealth in America (fielded among 2,860 consumers in the Top 10% of the U.S. economy) reveal that what the Affluent and Wealthy want in a shopping experience applies regardless of sales channel.  Specifically, Affluent respondents value a “no-hassle return policy” (44%), “excellent service” (40%), “consistently delivers the same experience” (28%), “embodies values that I appreciate” (23%) and “has sales staff I can trust” (30%).
These data reflect the percentage of Affluent and Wealthy consumers who would not give up these items, even if it meant receiving a discount. 
According to Ms. David, “Consumers expect to be able to make seamless transitions among shopping in-store, on-line and on-mobile.  They also expect holiday shopping to lift their spirits. To this point, 63% of Affluent and Wealthy women and 52% of men say that holiday shopping at stores puts them in the holiday mood.  Luxury brands should strive to weave together all channels during the holiday season in ways that reinforce consumers’ love of gift-giving and desire to enjoy the holidays with friends and family.  Colors, taglines, music and product spotlights are all possibilities for creating an exceptional holiday shopping experience that builds on a foundation of superior customer service across all shopping channels.”
Harrison Group:  Heather Dratler, 212-871-3020 ext. 110
American Express Publishing:  Jill Davison, 212-382-5679
About The Survey of Affluence and Wealth in America:
Now in its eighth seventh consecutive year, the Annual Survey of Affluence and Wealth in America, produced by American Express Publishing and Harrison Group, details the lives and lifestyles of Americans with at least $100,000 in annual discretionary income.  The sampling plan ensures adequate representation of loftier economic strata as well, including those described as “Wealthy” – with at least $500,000 in annual discretionary income.  Each year begins with a “primary wave” of data collection in January and February, followed by subsequent interviews throughout the year.  The 907 consumers in the Top 10% who were surveyed in September for the Holiday Forecast Study were consumers who also participated in the Q1 data collection of the main Survey.
The income groups in the research were defined by discretionary spending:  gross income reduced by factors representing property assets (mortgage, taxes).  Discretionary household income was used to ensure that the sample represented individuals with a high propensity to spend.  The study is nationally projectable within each discretionary income group.  Sampling error is estimated to be +/- 3%.  Multiple panels and starting points were employed to assure proper demographic and psychographic representations within each segment.  The survey itself addressed many aspects of respondent lifestyle, values, shopping habits, brand preferences, family characteristics, sources of success and wealth, attitudes toward money, lifestyles and media consumption. 
About American Express Publishing Corporation:
American Express Publishing Corporation produces authoritative lifestyle content that empowers affluent, primed consumers – and the businesses that serve them – to make informed decisions.  American Express Publishing tells customers where to fly, what to try and what to buy next.  Through the lens of five multimedia brands — Travel + Leisure, Food & Wine, Departures, Executive Travel and Black Ink – content is available in print, digital, and on-air, in branded books, through membership clubs, events and in 24 editions published in more than 70 countries and in nine languages.  American Express Publishing is a wholly owned subsidiary of Time Inc., one of the largest branded media companies in the world.  Follow us on Twitter @amexpublishing.
About Harrison Group, a YouGov Company:
Harrison Group, a YouGov company, is a leading market research and strategy consulting firm headquartered in Waterbury, Connecticut.  Along with expertise in the affluent and wealth space, Harrison Group specializes in the youth, media, financial management, consumer products and interactive entertainment markets.  The firm’s cornerstone is providing sophisticated market strategy, market analytics, and survey and forecasting services.  Harrison Group consists of a cohesive team of researchers, analysts, field experts, focus group facilitators, marketing experts, brand specialists and multivariate statisticians who specialize in the business of providing clear, definitive research results for many of the world’s leading companies.
YouGov plc (Symbol:  LSE: YOU.L, Stock Market: London Stock Exchange), is a global market leader in survey and market research, political polling, panel management, research operations and business consulting. In addition to their U.S. offices, YouGov operates in North America, Europe and the Middle East. For more information, please visit www.harrisongroupinc.com and http://corp.yougov.com