Rich people’s guilt

According to this article, people earning $500,000 or more make up only 10% of households, but account for over half of retail sales and 70% of retailers’ profits. But they have stopped buying. Why? They feel guilty spending on luxury goods during the economic downturn. Ironically, our economy needs them to start spending again for it to improve. From the linked article:

More than half of affluent consumers say they feel “guilty” making luxury purchases in this economy, a survey of the most-moneyed Americans finds. Fewer this year also say they like to be labeled as “wealthy.” . . .

While there’s been plenty of talk about the wealthy hiding their high-end shopping bags, the findings are believed to be the first to quantify guilt’s role in the decline of spending. Of more than 1,500 respondents, 54% agreed they “feel guilty purchasing luxury goods in the current economic climate.” Just 29% said they like to be recognized as being “wealthy,” down from 35% a year earlier.

The survey, in its third year, never addressed guilt because Jim Taylor, vice chairman of the Harrison Group, says it “didn’t become an issue until this year.”

Taylor says high-end retailers and brands must convince wealthy consumers there’s an added value in their products.

With consumption now often “equated to shallowness,” retail branding expert Ken Nisch says products must “marry function and fashion,” such as Apple’s iPhone.

Andrew Sacks, president of Agency Sacks, which specializes in advertising and marketing to the affluent, says marketers need to give luxury shoppers the words “they can use at a dinner party to justify their purchase.”

So do you think the wealthy should feel guilty about spending money?