Industry experts project affluent spending habits based on election results

President Barack Obama and running-mate Joe Biden on the campaign trail

 

Do you think that Barack Obama’s re-election will have a major effect on affluent consumers’ day-to-day spending? Long-term spending?
I do not think the re-election of Obama will have a direct effect on the affluent consumer’s day-to-day spending in the near term.

If it causes a major downturn in the stock market, this will have a slightly negative impact on the spending of the affluent, especially for holiday gifts.

As for the general public, they are not likely to change their spending because of his re-election. The larger influence on spending will be the actions taken, or not taken, to avoid the “fiscal cliff”, i.e. the increase in taxes and the major reductions in government spending due to take effect in January.

Ron Kurtz, president of American Affluence Research Center

I don’t think that there will be a major change in day-to-day spending.

We may have a Democratic president and Senate, but we have a Republican House of Representatives and Supreme Court. There are checks and balances in this country, and that will never change.

Someone once told me that the religion of America is capitalism. What most people don’t realize is that the Democratic and Republican candidates really aren’t that different.

Luxury is cyclical – it over-performs in booms and under-performs in downturns. Overall, I think that the overall projection of the economy for the luxury industry is positive.

This is the best and most adaptive economy in the world, and it doesn’t really have any effect on real estate or the stock market.

Milton Pedraza, CEO of the Luxury Institute

I think it all depends on the “fiscal cliff” and also on whether Congress can work together.

At the end of the day, there are very few external events that effect affluent consumer spend.  The Great Recession was one of those, and I don’t believe the election is in that category.

As I said, the big, big uh-oh is the fiscal cliff.  If we don’t find a way out of that, the U.S. will be thrown into another round of chaos.

Paula Rosenblum, managing partner of RSR


Many people generalize that affluents skew towards the Republican side. Do you agree, and do you think that the party’s loss will have a major effect on luxury spending?
The general consensus is more negative than imagined. The majority of the affluent are still working and a large percent are business owners.

Consumer confidence has to return before we see a robust economy.  That won’t happen anytime soon.

The affluent are still affluent.  But the lack of confidence in our government, and the renewed initiative to spread their wealth can’t be positive for any of us.

Research tells us that approximately 50 percent of the affluent are Republican and approximately 30 percent are Democrats.  It’s not the tax issue, but research tells us that the affluent are overwhelmingly open to paying more in taxes for the good of government.  The issue is the government’s inability to manage itself or its debt.  No one desires to throw good money after bad.

Chris Ramey, president of Affluent Insights, Miami

 

Should high-end marketers make any moves to encourage consumers to spend in the upcoming months?
High-end marketers have limited tools to counter the influence on spending of the mood created by economic and stock market conditions.

They are not likely to be able to [encourage] consumers to spend or to even provide meaningful incentives to encourage spending. They should focus on the top 1 percentile of the affluent, who seem to be relatively immune from economic conditions and the best prospects for luxury products.

Ron Kurtz, president of American Affluence Research Center

This is the time for discerning luxury. Income as not as disposable because now we have to dispose of it to fill a deficit.

Luxury has to be an emotional aspect, it has to be a self-reward for people to start buying again. Luxury now, more than ever, has to change. It has to endure and the surprise-and-delight aspect needs to come back.

True luxury means that it is true to the consumer, and you tell people about it not just to show off but to show mutual emotional reserve and awe.

Mathew Evins, chairman at Evins Communications

About Rachel Lamb

Rachel is the manager of brand and social content at EVINS. Email her at rachel.lamb@evins.com and follow her on Twitter at @RM_Lamb.

07. November 2012 by Rachel Lamb
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