The economic clout of the affluent is staggering. As of 2015, the Top 1% possess half of the world’s wealth. That number is up from 44% in 2009. The Top 10% own 88% of the world’s wealth, up from 83% in 2009.

Golf and wealth are closely linked… as income increases, so do golf participation rates. The participation rate for individuals in the $150,000+ income bracket is about double those in the $50K-$75K range, and about five times greater than the participation rate of those in the $30K or less group. The median annual household income for all Americans was approximately $52K in 2015, compared to golfers whose average household income was about $96K.

YouGov, a full service market research firm, produces an annual study of affluent consumers around the world. This year’s study included 2,515 financially successful individuals, including 864 affluent past year golfers, in the United States who have a minimum household income of $150,000, a group reflective of the top 11% of all U.S. households. YouGov estimates that this group will drive $2 trillion in discretionary spending in 2016.

In the golf industry, roughly one in five golfers fall into YouGov’s affluent (HHI > $150K) category. This group will account for a third of spending on greens fees and an even higher share of golf club purchases this year.

Outlined below are six spending trends among this group, which will help you get better acquainted with a population that accounts for such a large portion of golf purchasing.

YOUGOV’S SIX TRENDS EFFECTING AFFLUENT GOLFERS

TREND 1: Slowdown in purchase decision making. This trend is particularly evident in the summer of 2016. Affluent consumers are deeply concerned over the outcome of the Presidential election, which appears to be contributing to a slowdown in spending and purchase decision-making.

The affluent consumer mindset for many big-ticket purchases is to “wait and see” what happens. While they don’t panic much anymore, they are more mindful than ever of their personal economies. They have built a moat of protection from outside influences in the form of cash (YouGov estimates around $7.5 trillion, a per-household average of more than $500,000 in cash), so they wait.

TREND 2: Golf is not immune to consumer cutbacks. When there is a need to pull in the reins in spending, club memberships, sports, and recreation are among the first items to be curtailed in the affluent household budget. They are seen as areas that can be scaled back or cut out completely if a significant adverse financial event were to strike their household.

In response to this risk, shore up relationships with your best customers and have a “Plan B” ready should consumer spending sentiment turn sour. There is no direct evidence of an impending recession, however affluent and wealthy consumers are cautious, and are showing signs of buttoning the wallets.

TREND 3: The desire to be victorious. Throughout history, luxury has been reserved for the social, political and economic elite. As aspects of an affluent lifestyle become increasingly available to non-affluent people, so too does the pursuit of luxury living. Luxury purchases represent, among other things, the owner’s victory over the challenges they have faced. The increasingly victorious golfer is one who can afford to focus on the answer to the question “what do I need to win?” For golfers, being “victorious” can mean having the latest and best equipment, playing trophy courses, or joining the most prestigious private clubs.

TREND 4: The ability to discern. Luxury is a part of a lifelong journey, and as successful people often do, they learn from their experiences. As luxury participation increases, so too does the ability to tell the difference between very good and excellent. Details begin to stand out as hallmarks of artistic metric and high quality materials. The ability to discern is based on interest in the category and is the product of knowledge, experience, and taste. The new motivation for the prospective affluent customer is based on the perception of worth. Worth is the culmination of a brand: the details of distinction that set it apart, the value of the product, quality materials, craftsmanship in construction and empathetic service.

TREND 5: Luxury is increasingly independent. More and more, affluent consumers prefer brands that work independently from the mainstream. The trend is popular because of a commonly held belief that independent companies rely on their ability to provide better service, better training for staff, and deeper connections to the product that big-brand companies don’t always provide. The increasing popularity of these independent providers is proof that consumers prefer companies that take the time to organize choices, to maximize the number of desirable choices, and minimize the time invested choosing between them. Think “everything for someone” instead of “something for everyone.”

TREND 6: Informed purchases with a personal experience. We are in a time of informed consumer purchasing and with it increasing pressure on retail channels. Affluent consumers learned during the recession that if they were diligent in their purchasing (i.e., researching products, prices, and brands online) that they could find what they wanted was available at a substantial savings.

The internet is the perfect research tool, but it is not the perfect purchasing method. In fact, “in-person” browsing and purchasing remains the preferred channel by the majority of affluent consumers. This affinity to in-store purchase presents its own challenges: they expect salespeople who are happy to be there and passionate about the category (read: knowledgeable about products), a fun shopping environment, and they prioritize retailers who make it easy to do business. 

THE BOTTOM LINE
The game of golf is in a state of mixed signals. Affluent golfers remain bullish on their personal economy, feeling good about the purchase decisions that they make after lots of research, and are willing to spend significantly in the category. However, to some, another recession is a possibility, and the resulting impact on the golf industry could be widespread.

Consumers approach shopping with a defensive mindset. They will conduct the necessary due diligence to mitigate risks in purchasing products, engaging with service providers, and making substantial investments (e.g., club membership). For a brand to win with affluent consumers they must satisfy both rational and emotional needs. Products must stand out as arguably superior to its competition and the brand must “take the high ground” in the category to have a place in the hearts of consumers.

ABOUT YOUGOV AFFLUENT PERSPECTIVE
Affluent Perspective is a semi-syndicated study, produced annually. The survey features economic trends, consumer sentiment, and individual brand performance relative to competitors. Clients benefit from having an early read on spending trends, their place in consumers competitive set, and from YouGov’s more than 10-years of experience as a strategic resource in advising premium and luxury brands.

The main wave of the 2016 Study represents 14.1MM U.S. households in 2,515 interviews. The sample is divided into three distinct tiers: Base Affluent (5.7% of U.S. HH), Middle Affluent (3.7% of U.S. HH), and Upper Affluent (1.9% of U.S. HH), detailed in the table below. YouGov is able to make comparisons with the general population through a companion study among 900 respondents in the general population with incomes below $150,000. The Global Study includes 2,743 affluent consumers in 11 additional countries, including Canada, Mexico, the UK, France, Germany, Japan, China, South Korea, Singapore, Australia and the UAE.