New research by Cambridge, Massachusetts-based Forrester Research shows that American millionaires use the Internet more than their less affluent neighbors and are more likely to purchase just about anything online.
The study, “The Millionaire Online,” debunks the widely-held perception among high-end retailers and manufacturers that affluent Americans are reluctant to embrace technology. In fact, according to the study, U.S. millionaires research and buy everything from airline tickets to groceries online and are more likely than other investors to trade online through discount or Internet-only brokerages.
According to Forrester analyst Ekaterina O. Walsh, “Retailers and manufacturers that target the affluent often adopt a defensive tone about the Internet. Our research uncovered four oft-cited misconceptions about affluent consumers — that they don’t like technology, don’t go online, don’t shop online, and don’t use the Net to manage their finances.”
Ahead of the General Population
Forrester’s research showed that 56 percent of wealthy households are online, compared to 43 percent of the general population. Additionally, half of these millionaires have been going online for at least three years, while only one-third of non-affluent consumers have logged that much time online.
Although overall usage patterns — including sending e-mail and using search engines, reference guides, and directories — resemble that of other consumers, millionaires are distinguished by their stronger interest in finance. Millionaires are 152 percent more likely to view stock quotes and 124 percent more likely to visit financial sites.
Not only are the affluent more likely to be online, they are also more likely to be technology optimists who own and use a variety of technology products.
The survey showed that almost two-thirds of the affluent are technology optimists, compared to slightly more than half of the non-affluent. The rich own more fax machines, projection TVs, DVD players, digital cameras, and writeable CD drives. The average affluent household owns two PCs and two-thirds use these machines everyday. Only half of the non-affluent used their PCs on a daily basis.
Shopping and Trading Online
Millionaires not only spend more time online, they are also 16 percent more likely than other Net users to regularly research products online before buying. Millionaires are more likely to buy almost every product category online than their less affluent neighbors. The exceptions are such entertainment items as music, videos, and games, which the non-affluent are equally likely to buy online.
Like the less-well off, millionaires buying online look for reasonable prices without a corresponding sacrifice in quality.
Shattering the myth that millionaires demand too much service to manage their own online portfolio, the rich are 79 percent more likely to trade stocks online, 75 percent more likely to trade mutual funds online, and 47 percent more likely to track their portfolios online. Thirty-one percent use discount brokerages — versus 17 percent of non-affluent wired investors — and they keep more than one-third of their portfolios there.
“The affluent are a much sought-after market for a whole host of companies, from luxury retailers to private banks to charities,” said Walsh. “With 56 percent of them online, our new research focusing solely on this consumer segment will enable companies to win them over.”
About the Survey
To gather data for this report, Forrester surveyed more than 2,000 affluent households which were defined as households wiith investable assets of $1 million (US$) or more, not including the value of their primary home.