Only 6% of wealthy consumers said they expect to spend more on handbags, while a mere 4% said they will be spending more on watches and jewelry, the survey found.
Wealthy consumers are expected to cut back on spending on non-essential items during the second half of the year; seeking products and experiences that hold more value instead, according to a survey released Wednesday by the Luxury Institute.
Of the more than 500 "pentamillionaires" -- those with a net worth of $5 million or more -- surveyed, more than 80% say luxury goods, such as jewelry, watches, and handbags, have declined in significance.
"Even among the wealthiest customers, luxury goods and services are considered less important in today's economy," said Luxury Institute CEO Milton Pedraza in a statement.
Only 6% of wealthy consumers said they expect to spend more on handbags through the end of the year, while a mere 4% said they will be spending more on watches and jewelry, the survey found. Meanwhile, 33% plan to spend more on travel and 20% said they would spend more on dining out.
"People are less interested in watches and more interested in building lasting memories," said Pedraza.
Most of the consumers surveyed said they buy luxury goods not to show off, but because they hold value and serve as a reward for personal success. Yet, more than 60% agreed that the prices of luxury brands are too high relative to the product's value and over half said that they are turned off by products with visible and prominent brand logos.
According to Pedraza, the trend of "less is more" not only applies to handbags; it also applies to basic household items and clothing, such as khakis, socks, and children's clothes that will soon be outgrown. He said the wealthy have fewer qualms about shopping at discount or big-box stores, retailers that are not normally associated with well-heeled shoppers.
"They buy items at Staples and T.J. Maxx, they buy in bulk at Costco" said Pedraza. "They go to mainstream retailers to save money."
Survey respondents said their non-luxury spending has increased by almost half, and more than 40% of those surveyed believe that luxury brands are becoming a commodity -- that the product doesn't deliver additional value for the money, and can be easily replaced.
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