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There’s More To Spending Patterns Of Affluent Moms Than Just Income

Marketing Daily had an interesting piece titled, Finding: Affluent Moms Shop Like Everyone Else.

A new study of affluent moms based on data from Ipsos Mendelsohn’s affluence surveys shows that affluent women with kids behave a lot more like the rest of us — although maybe on a larger scale — than do their peers without kids.

The numbers are also large: the firm says that of 15.6 million heads of households with incomes of at least $100,000 and ages 18 to 54, 60% have kids under 18.

The study, which comprises surveys of 4,500 women, reveals that affluent women with children report traveling ten percentage points less than those without; they are also less likely to own a second home or luxury car, or to travel abroad by air or visit a spa. For example, 20% of child-free wealthy women reported owning a luxury car versus 15% of those with kids. Seventy-two percent of women without kids took an airline trip in the past year versus 64% of those with kids.

Affluent women with kids, however, were more likely to visit museums, the ballet, movies and sports events. And far more likely — no surprise — to go to a theme park. They were also far more likely to own an SUV or minivan.

Donna Sabino, SVP of kids and family insights at Ipsos OTX MediaCT U.S., says this is the first time the affluence data from Ipsos has been parsed to break out affluent women with children under 18 versus those with no children.

“Initially, we were not sure there were going to be any differences,” she says. “I come out of advertising, where you think in terms of targets — say, 25-to-54 — more than psychological definers. You don’t think, for example, about how having a child under 18 impacts across product categories; stereotypically, you don’t think of an affluent woman shopping at Kmart or Walmart.”

But they do, and, per Sabino, the large size of the data set makes even small differences by percentage statistically significant. While 86% of respondents who are affluent women without kids said they shop at Target, 93% of those with kids say they shop there. There is similar six-percentage-point difference for Sears; a five-percentage-point spread for JC Penney; and a two-percentage-point spread for the Home Depot (81% for those without kids versus 83% for those with).

There is a sense in which this study is obvious and another sense in which we doubt it is true at all.

Clearly, life stage and life responsibilities lead to purchasing behaviors that are based on these factors, not solely on wealth. So many mothers who could afford more expensive cars will choose mini-vans because they want the utility of sliding doors and a third seat for car pooling or picking up friends after school or sports.

Also young children have social patterns, such as lots of birthday parties that lead to certain patterns of adult behavior. For example, young children often invite their whole class to birthday parties, and many schools require that parents do so if they want to use the school backpack as the mechanism for distributing the invitations. This means, however, that the children attend dozens and dozens of birthday parties often for people the parents barely know. No matter how rich someone is, it would be inappropriate to buy really expensive birthday presents for all but one’s closest friends. Indeed it would put pressure on people to reciprocate who couldn’t afford it.

It is also true that children want more widely distributed products than adults. Adults want things specifically because they are not widely available, such as a designer bag that is hard to get. Children typically want the latest Batman toy. Once you are buying exactly identical products, well… affluent people typically didn’t become affluent by being fools. If the exact same toy is for sale at Wal-Mart for half the price of a local toy store, many people will go to Wal-Mart — regardless of affluence. Indeed Wal-Mart has spent much time strategizing how it can get people who come to Wal-Mart for branded products such as Clorox or Monopoly to stay and buy fashion and fresh food.

So, yes, of course, mothers have similarities that transcend income to influence their purchasing patterns.

At the same time, we are also certain that the study overstates this effect because of the way it defines affluent — a household with income of $100,000 a year or more. This corresponds to the top 20% of households in the US, and so, of course, the study is not incorrect — these are high income people. However, everything is relative. Because the study does not adjust for geography or for family assets, this definition of affluence stretches to encompass a lot of people with widely varying situations.

Two medical interns might together make $100,000, but if they live in high-tax, high-rent Manhattan and each carry $350,000 in school loans and they have three children, their “affluence” is of a very different sort than a one-child family that owns its home outright in rural no-state-income-tax Texas, has no debt and makes its $100,000 income in dividends off its holding of $5,000.000 in an S&P 500 tracking mutual fund.

The study, of course, just sets $100,000 as the minimum family income to be “affluent,” so you are also mixing in people who have an income of $100,000 a year with those who have an income many times that. It is interesting that the President, when he was running for the office, felt the need to promise no tax increase to families earning below $250,000 a year, perhaps an indication of where a real separation starts to occur.

In any case, the study does serve to remind us that income is at best a rough metric to use in anticipating consumer behavior. Age, ethnicity, religion, marital status, parental status and many other factors play into it. This is why efforts to classify stores strictly by income as A, B, C, D, E etc., are only going half way there. The surge in ethnic retailers tells us that many mainstream retailers are just not doing the job.

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