Despite common misconceptions, most of the affluent in North America — those with investable assets of at least $1 million — use the Internet more than other consumer groups. According to the first Report in the Technographics® Affluent Lens from Forrester Research, Inc. (Nasdaq: FORR), millionaires research and buy everything from books and jewelry to airline tickets and groceries online. With a focus on value and self-direction, they are more likely than other investors to maintain accounts with discount and Internet-only brokerages.
“Retailers and manufacturers that target the affluent often adopt a defensive tone about the Internet,” said Ekaterina O. Walsh, Ph.D., analyst at Forrester. “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.”
Almost two-thirds of the affluent are technology optimists — versus slightly more than half of the nonaffluent — dispelling the myth that millionaires don’t like technology. The affluent own more technology products than other consumers, including fax machines, projection TVs, DVD players, digital cameras, and writeable CD drives, with the average affluent household owning two PCs. They also use their PCs more often than other users, with two-thirds turning on their machines every day versus half of the nonaffluent.
Perceptions that the affluent are not online are false — 56% of today’s wealthy households are wired versus 43% of the general population. Half of these millionaires have been going online for at least three years, with only one-third of nonaffluent consumers having as much experience. Beyond sending email and using search engines, reference guides, and directories — usage patterns resembling other consumers’ — a deeper interest in finance distinguishes the affluent from other surfers. Millionaires are 152% more likely to view stock quotes and 124% more likely to visit financial sites.
Not only are they avid surfers, the affluent are also 16% more likely than other Net users to regularly research products online before buying. With the exception of entertainment items like music, videos, and games, the affluent are more likely to buy in every product category online. Although millionaires also spend more online, they seek reasonable prices without sacrificing quality.
While millionaires are thought to demand too much service to manage their own online portfolios, in reality they are 79% more likely to trade stocks online, 75% more likely to trade mutual funds online, and 47% more likely to track their portfolios online. Thirty-one percent use discount brokerages — versus 17% of nonaffluent 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,” added Walsh. “With 56% of them online, our new research focusing solely on this consumer segment will enable companies to win them over.”
For the Report “The Millionaire Online,” Forrester surveyed more than 2,000 affluent households — those with investable assets of $1 million or more, not including the value of their primary home. Forrester’s Technographics Data & Analysis is the industry’s most comprehensive quantitative research program analyzing how today’s technology impacts consumer attitudes and behavior.