I recently attended a presentation for the Luxury Marketing Council of Los Angeles www.luxla.com by Lewis Schiff, the author of The Middle-Class Millionaire: The Rise of the New Rich and How they are Changing America. The book addresses the segment of our economy with assets between $1 million and $10 million (including primary residence) and their spending habits, historically and anticipated. First, a few tidbits for you:
- .001% of US population are considered “giga-rich” and have
combined assets of $1.5 Trillion
- .01% of US population are considered “mega-rich” and have
- combined assets of $12 Trillion
- 10% of US population are considered “super-rich” and have
combined assets of $20 trillion
This means that roughly 10% of the population is controlling 40% of the spending!!!!!
The middle-class millionaire is tremendously pressed for time and needs to utilize the services of professionals. They also take referrals for new products and services, thus illuminating the need for social networking—they trust their social network to make recommendations to them. With this in mind, here is a glimpse of what you can expect.
| Additional spending in 2008 |
|
| Very likely to buy a new primary residence |
11.2% |
|
Very likely to purchase a second residence |
14.6% |
|
Very likely to make significant home improvements ($20,000 or more) |
20.9% |
| |
|
|
When the economy improves |
|
|
Very likely to buy a new primary residence |
41.7% |
|
Very likely to purchase a second residence |
26.7% |
|
Very likely to make significant home improvements ($20,000 or more) |
34.5% |
| |
|
SOURCE: Prince & Associates, Inc.
Because home improvements fall under “values-based” spending, these are areas that reflect the core family-oriented middle-class values of the working wealthy. As such, they are the last areas to be touched by recession-minded spending. This segment is more likely to make these expenditures before something discretionary, sauch as a new car or expensive piece of jewelry.
So, stay focused on your marketing efforts and stay out there in an optimistic way. The interior design industry is going to be just fine!
Lloyd
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