Consumer buying trends The Affluent
By Dana French -- Furniture Today, October 3, 2005
According to recent figures from the U.S. Census Bureau, 26% of all U.S. households have incomes of $75,000 or more. These 29.3 million affluent households, if they follow through with their buying plans, will spend nearly $33 billion on furniture this year.
That's the word from Furniture/Today's exclusive Consumer Buying Trends survey. The Buying Trends survey, conducted in January, shows 8.8 million affluent households had furniture on their shopping lists this year.
If all households were to buy as they plan, affluent households would account for one-half or more of spending for dining room, futons and sofa-sleepers, entertainment centers/armoires, desks and other home office furniture, master bedroom, youth and other adult bedroom, and stationary chairs.
Buyer characteristics
What characteristics do affluent households planning to buy furniture in 2005 share? Nearly 9 out of 10 live in a house that they own or are buying, and 88% are married. Nearly 60% are dual-income households, with both adults employed full-time. And, nearly half of the affluent are Baby Boomers, currently between the ages of 41 and 59.
Another one-third of the affluent planning to buy furniture this year are part of Generation X, currently between the ages of 30 and 40. At 44 million, Gen X is about three-fifths the size of the Baby Boomer generation. More educated than their Boomer elders, Gen X households are earning higher incomes at a younger age.
For the most part, members of Generation X postponed starting families, but they're now having children and are in full nesting mode. Three-fourths of the group is married and three-fifths of the married couples each have full-time jobs.
While only 4% of the affluent households planning to buy furniture in 2005 belong to Generation Y, it would be a mistake to discount the generation's significance. Gen Y is a group to watch and court. Born between 1976 and 1994, more than one-third are still under 18. Among the over-18 portion, about one-third is still in college. Their potential is enormous.
Top products
Affluent households are hot prospects for dining room, stationary chairs, youth/other adult bedroom, entertainment centers/armoires, occasional tables and master bedroom. One-third or more of households planning to buy these products have incomes of $75,000 or more.
Nearly one-half of households planning to purchase formal dining furniture this year earn $75,000 or more. The affluent have a plan-to-buy index of 168 for dining room furniture. That means households with incomes of $75,000 or more plan to buy formal dining room at a rate 1.7 times higher than their presence in the population. As expected, affluent households plan to spend more on dining room than those with lower household incomes, a median of $1,200. That's 2.2 times more than the median non-affluent households say they'll spend. If all affluent households that plan to buy actually buy and spend the amount they've budgeted, then the affluent will spend nearly $4.6 billion on formal dining this year.
About one-third of households planning to buy master bedroom furniture and stationary sofas in 2005 are affluent. Affluent households have budgeted three times more than non-affluent households for their master bedroom purchase — a median of $1,500 compared with a median of $500. Additionally, 42% of affluent households planning to buy master bedroom say they'll spend $2,000 or more. Only 12% of households with incomes of less than $75,000 say they'll spend that much. If all households with incomes of $75,000 or more follow through with their buying and spending plans, then affluent households will spend more than $5.5 billion on master bedroom purchases this year.
With stationary sofas, the affluent account for nearly one-third of potential buyers. Affluent households will spend about $4.6 billion on the category if all households that say they'll make a sofa purchase do so and spend the maximum amount they've budgeted.
Households making $75,000 or more have budgeted a median of $1,000 for a stationary sofa this year, 1.7 times higher than the $600 budgeted by non-affluent households. Nearly one-third of affluent buyers plan to spend $1,500 or more, compared with 9% of households with incomes of less than $75,000 a year.
| Affluent households in the U.S. | |
|---|---|
| % of all households that are affluent | |
| Source: U.S. Census Bureau, U.S. Department of Commerce, August 2004 | |
| All U.S. households | 26% |
| By region | |
| Northeast | 30% |
| Midwest | 26% |
| South | 23% |
| West | 29% |
| By race/ethnicity | |
| White | 29% |
| African-American | 14% |
| Asian-American | 36% |
| Hispanic | 15% |
| By age | |
| Under 25 | 8% |
| 25 to 34 | 23% |
| 35 to 44 | 34% |
| 45 to 54 | 38% |
| 55 to 64 | 31% |
| 65 to 74 | 15% |
| 75 or older | 6% |
| Products where the affluent will have the biggest impact on furniture buying | ||
|---|---|---|
| % of plan-to-buy households that are affluent | 2005 affluent sales potential * in $ billions | |
| *The 2005 sales potential calculated for each product category assumes all affluent households planning to buy actually make a purchase and spend the maximum amount planned. Actual sales figures for each product category in 2005 may be higher or lower. Source: Furniture/Today Consumer Buying Trends Survey, 2005 |
||
| Dining room | 48% | $4.6 |
| Stationary chairs | 44% | $0.6 |
| Youth/other adult bedroom | 37% | $1.7 |
| Entertainment centers/armoires | 35% | $2.7 |
| Occasional tables | 35% | $0.8 |
| Master bedroom | 34% | $5.6 |
| Stationary sofas | 32% | $4.6 |
| Desks/other home office | 31% | $1.9 |
| Motion sofas | 30% | $2.6 |
| Futons/sofa-sleepers | 27% | $0.7 |
| Kitchen/dinette table, chairs | 26% | $1.3 |
| Mattress/boxspring | 26% | $3.5 |
| Curios | 25% | $0.8 |
| Reclining chairs | 24% | $1.4 |
| Glider rockers | 22% | $0.4 |
| Demographic characteristics of affluent households planning to buy furniture in 2005 | |
|---|---|
| Source: Furniture/Today Consumer Buying Trends Survey, 2005 | |
| Generation | |
| Generation Y | 4% |
| Generation X | 34% |
| Younger Baby Boomer | 22% |
| Older Baby Boomer | 25% |
| Happy Days Generation | 13% |
| Senior Senior | 2% |
| Marital Status | |
| Now married | 88% |
| Never married | 8% |
| Divorced, widowed, separated | 4% |
| Home ownership | |
| Own or are buying | 87% |
| Rent | 10% |
| Other | 3% |
| Family dynamics | |
| Families with children | 43% |
| Dual-income households | 59% |
