It’s a statistical fact that wealthy shoppers rave about the pampering they receive at upscale retailers like Neiman Marcus, Lord & Taylor and Barneys. But here’s a question to ponder: How often do wealthy shoppers actually shop in those stores?
Turns out, not a whole lot—or so a new survey from Millionaire Corner suggests. The wealth management news site recently polled 1,200 investors, asking them where they drop coin. Among respondents with a net worth of $5 million or higher, the top retail destinations were Home Depot, Lowe’s and Target—with 61, 44 and 41 percent reporting, respectively, that they like to shop there. Nearly half the well-heeled respondents also said they liked to shop at Costco, and a full third admitted to setting foot in Walmart.
Yep, Walmart—where $386 buys a pleather living room set—and Costco, home of the $59 gold tone chronograph watch. Why would people with summer homes and tech stock portfolios bother with such places?
Maybe the better question is: Why not?
“Ordinary folks make a huge mistake when they feel that millionaires and other wealthy individuals do not shop at stores with good prices,” said Millionaire Corner president Cathy McBreen, who adds that frugality and hard work are common reasons that rich people give for why they’re rich in the first place. “That means,” McBreen said, “they are just like everyone else.”
Well, maybe not just like everyone else. Nevertheless, when it comes to shopping, the similarities between the fabled 1 percent and the rest of us are rather striking. That includes online shopping, too. McBreen’s research revealed that 47 percent of the wealthy routinely use Groupon.
So if moneyed Americans are busy plying the aisles of big-box discounters, where does that leave luxury retailers whose very raison d’être is serving the prosperous?
Apparently, it leaves them pretty empty. Millionaire Corner’s survey found that Lord & Taylor (part of Hudson’s Bay Company, which also owns Saks) was a regular destination for just 3 percent of multimillionaire respondents. Neiman Marcus, with 8 percent, didn’t fare much better.
Surprisingly or not, Millionaire Corner isn’t the first researcher to uncover results like these. When the Luxury Institute published its annual Luxury Consumer Experience results last year, it reported that while affluent shoppers “love the Lord & Taylor experience,” only 14 percent of them actually set foot in Lord & Taylor within the preceding year. Most of those shoppers—66 percent, to be exact—were busy at Target.
McBreen added that one reason the affluent aren’t throwing money around in high-end stores is because they’re not throwing money around, period. “When asked how much they spend on clothing annually, most of them will indicate that they spend less than $2,500 annually,” she relates. “How much can you buy at Neiman Marcus for that amount? ”
Just for the record, right now at Neiman Marcus, $2,490 will buy you exactly one Yves Saint Laurent Y-Ligne Cabas handbag in blue calfskin. By contrast, that same amount at Walmart will pay for 228 pairs of Jordache jeans.
Act now, while supplies last.