What You Need To Know About Wealthy Home Owners Today
Every year, Dwell Insights Group publishes their annual study on the affluent consumer as it relates to the home and shelter industries. This year’s “Designing for Today’s Affluent Consumer” study showed drastic shifts in this consumer group’s behavior due to one key factor: perceived economic improvement. Fifty-four percent of affluent consumers feel the U.S. economy has improved and will continue to do so over the next one to two years.
The affluent consumers’ optimistic outlook has led to a resurgence of business in the interior design and shelter industry. Homeowners are building, designing and redesigning the environments in which they live and work. Dwell president and CEO Michela O’Connor Abrams discussed the behavioral pattern and lifestyle shifts in this interview.
How should marketers define affluent consumers today?
Affluent consumers are individuals with a household income level over $222,000 per year. Their average age is 48, and 85% of them have advanced degrees. This equals 8.8 million households in the U.S., with a combined spending power of $700 billion. Modern affluent consumers are design centric, tech savvy and self-directed. They are also opinionated, hold firm to their values and are unconcerned with social standards. Most importantly, they are environmentally conscious and seek quality over quantity.
What are the key factors driving the growth in affluent consumer spending?
The key factors driving their spending are based upon one thing: great design. In our survey, companies like Apple, Audi, Patagonia, Tesla, Whole Foods, Design Within Reach, West Elm, Ralph Lauren, Nike and LG all hold high affinity with affluent consumers because of intuitively designed products or services. When we dug deeper, we found this meant that they wanted:
- Products that offer great aesthetics.
- Products that are sustainable, both in the way they were manufactured and in the way they work in their lives.
- Products that are functional.
- Products built with intuitive technology that can be seamlessly linked to one another in order to live their lives.
Overall, affluent consumers are willing to pay more for well designed things that last longer and make their lives run more efficiently.
How do purchase patterns of the newly affluent vary from those before them?
Affluent consumers really understand technology, and that makes the market more complex and diverse. For affluent consumers, technology is second nature. They look for smart walls, panelized systems and better ways to use resources within their homes like water and electricity. Home technology is really about adopting things that help run things more intelligently.
How are affluent consumers shunning conventional notions of wealth?
The new affluent have no regard for luxury for luxury’s sake. Our study found that 73% of them view traditional definitions of luxury as a veneer. They are looking for fewer, but finer things. It’s not luxury, it’s a gravitas around the finest things. It’s curated.
How do the affluent develop their home environments to balance both work and life?
91% of the 7,000 people included in our survey believe that their environments strongly impact their physical and mental well-being. For the affluent, home and work environments are one in the same. They ask themselves, “If I’m working this hard, how do I make this space about who I am instead of what someone tells me I should be?” So they’re imbuing their home with all the technologies necessary to be free from a workplace convention, thus making themselves marketable outside of the geographic areas in which they’ve chosen to live. What you’ll also find is that they’re really rethinking space. Affluent consumers don’t have mcmansions; instead, they may have several smaller spaces in several cities that speak to them.