WATERBURY, CT, October 14, 2014 – Holiday spending is expected to be strong this year, according to the Survey of Affluence and Wealth, published by Time Inc. and YouGov, one of the nation’s premier market and survey research firms. Results of a national survey of holiday spending plans among America’s households – and a separate survey of affluent and wealthy households – suggests that the average U.S. family will spend $736 on gifts this year, an increase of $66 per household. This equates to a total U.S. holiday gift spend of $77.5 billion, an 8.7% increase over an estimated $71.3 billion1 in 2013.

 

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Results also show a significant increase in purchases by the nation’s most affluent consumers. Among the top 10%, average spending will increase 8%, to $1,920 per family. In line with this trend, Upper Middle Class families ($100,000-$150,000 discretionary incomes) plan to spend 32% more this holiday season than last; and One Percenter families ($450,000 HH incomes), an additional 29%. Holiday spending among core affluent families ($150,000-$450,000 HH incomes) are trending down around 10%, roughly in line with the spending increase among these families last year.

 

The study also found that the top ten percent of Americans will account for $21.6 billion of purchases – nearly one-third (30%) of all U.S. holiday gift-giving. Among American families not included in the top 10% (general population households that account for 90% of the U.S. population), spending is estimated to be up 12%, for an average of $594 per family.

 

According to Dr. Jim Taylor, Vice-Chairman of YouGov America, “This is the first really robust holiday season since the dark days of the recession. However, it is important to note that most Americans – especially affluent Americans – still believe we are in a recession. They remain concerned about the state of the American economy and community. While most affluent families concede significant improvement in their household finances, concerns remain that the overall economy is unstable and that problems of war, disease and civil unrest persist globally.”

 

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Beyond increased spending, holiday shopping patterns continue to evolve. Caryn Klein, Vice President of Time Inc. Research & Insights, commented, “Shopping continues to shift in favor of digital as the gap between online and in-store shopping is now the largest it’s been in the past four years.”

 

Forty-five percent of affluent holiday shoppers expect to do most or all of their shopping online while 35% intend to shop mostly in stores. The remaining 24% of affluent shoppers will mix it up, using both digital and brick-and-mortar establishments for their holiday gift-giving.

 

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Perhaps equally important is the dramatic rise of the smartphone as a shopping assistant.

 

“Fifty-five percent of holiday shoppers, especially women, expect to use their phones to compare prices, features, colors and overall product value and worth,” said Cara David, Managing Partner at YouGov. “Projected usage of smartphones for shopping has increased 33% as compared to 2013.”

 

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Once again, gift cards lead the Survey’s list of the top five holiday gifts for 2014. Fashion will continue to be a popular gift item, as will books, while watches are especially prized among men. This year will also see strong growth in sales of both food and fine jewelry, the latter category being generally viewed as an “earned asset.” It seems that 2014 will be the year of significant recovery for the jewelry industry, which suffered markedly during the recession.

 

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Another phenomenon that has grown substantially over the last five years is holiday shopping for oneself.

 

“We believe men and women feel the need to reward themselves for their hard work at keeping their lives together during the difficult recessionary years,” Dr. Taylor observed. “This trend is particularly strong among parents with children under the age of 18. Forty-five percent of these holiday shoppers expect to indulge themselves with a personal purchase. Shopping for family and friends will increase by 25% over 2012 and 17% as compared to last year.”

 

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Self-gifting among parents with youngsters comes in the form of jewelry, food and wine, cosmetics, smartphones and art. At a level almost equal to the percentage of families investing in art is the substantial increase in the number of these parents who expect to donate to a charity as a gift to themselves. More than doubling from 5% to 11%, the gift of charity now represents a wonderful way for parents to feel good about the accomplishments of their successful families and, at the same time, express their sense of obligation to their community. It seems that the reward for doing well with the kids this year is a genuine reward.

 

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In addition, the holiday season promises to be good for spouses and significant others. Even as shoppers reward themselves, they intend to splurge on their loved ones. Among affluent households with children under 18, more than one in five respondents (21%) intends to spoil a significant other, an increase of 60% over 2013.

 

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In addition, travel plays an important role in holiday planning. Forty-two percent of affluent families expect to travel this year – the most common destination being a relative’s home. In general, travel has been the fastest growing consumer category since the recession and this holiday season will be no exception. Families no longer regard travel as a discretionary category, but rather, as a necessity. Respondents stated that travel is the key to a fulfilled life, giving the family unencumbered “together” time.

 

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In sum, 2014 promises to be an exceptional holiday season. While spending is projected to be up, purchases will continue to underscore the meaning of the relationship between giver and receiver. Smartphones enable more careful purchasing, while online shopping provides added convenience for many shoppers. Travel is a big part of the 2014 holiday season.

 

Above all, however, the most important part of affluent holiday shopping is the spirit of the holidays. Successful families strive for fulfillment by de-emphasizing the importance of possessions and stressing the significance of families working together to manage risk and achieve happiness in an uncertain world.

 

1While per household spending is up 10%, total spending has increased only .7% because roughly two million households (1.3%) have dropped out of holiday spending altogether. In 2014, 91.3% of American families will participate in gift-giving.

 

 

 

About The Survey of Affluence and Wealth

 

Now in its ninth consecutive year, the annual Survey of Affluence and Wealth, produced by Time Inc. Affluent Media Group and YouGov, details the lives and lifestyles of Americans with at least $100,000 in annual discretionary income.

 

The 2014 Holiday Gift Forecast data was collected from 1,058 respondents with household incomes in the top 10% of the American income spectrum, including 459 Upper Middle Class respondents (income between $100,000-$150,000); 446 Core Affluent respondents ($150,000-$450,000) and 153 One-Percenters (as determined by the Internal Revenue Service; $450,000+). Additionally, 1,000 U.S. families in the general population were interviewed in order to benchmark against the affluent population, giving a meaningful read on the holiday spend for all American families. All data was collected online during the period of September 10-15, 2014. Except where noted, data reported here is concerned with gift-giving only and does not include holiday spending on décor, travel or holiday events.

 

Sampling error in the study is estimated to be +/- 3% (higher among subgroups). 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 Time Inc.

 

Time Inc. (NYSE: TIME) is one of the largest media companies in the world reaching more than 130 million consumers each month across multiple platforms through influential brands such as Time, People, Sports Illustrated, InStyle, Real Simple, Travel + Leisure, Food & Wine, Wallpaper and NME.

 

With 50 editions of Time Inc. magazines licensed in more than 30 countries ranging from Germany to Turkey to China, the Time Inc. global portfolio touches all corners of the world. Time Inc. connects audiences through shared experiences, celebrated events and franchises including the Fortune 500, Time 100, People’s Sexiest Man Alive, Sports Illustrated’s Sportsman of the Year, the Food & Wine Classic in Aspen and the Essence Festival.

 

About YouGov

 

YouGov is one of the world’s largest professional research and consulting organizations, pioneering the use of technology to collect higher quality, in-depth data for companies, governments and institutions so that they can better serve the people who sustain them. YouGov leverages its online sampling, research expertise and consulting experience to provide clients with sophisticated market strategy, market analytics, and survey and forecasting services.

 

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CONTACT:

 

YouGov Press Contact:

Lauren Banyar Reich, yougov@peppercomm.com, or 212-931-6187

 

For copywrited versions of the enclosed tables, please contact Kevin Sansone at kevin.sansone@yougov.com

 

For more information, please visit: www.surveyofaffluenceandwealth.com