Are retailers prepared to do business with America's 'new rich'?
Dual-purpose cash counters and check scanners may be a sound back office investment for local retailers targeting the new affluent consumer demographic in the U.S.
The Associated Press recently cited data from a survey conducted by the AP-NORC Center for Public Affairs that said wealthy Americans don't necessarily behave like they have in previous years. In fact, they don't exactly look the same, either. The report found a growing number of households across a vast age group fall into the top 2 percent of earners in the U.S. at least once in their lives. While their status in this income category is often temporary, a large portion of the population consistently generates at least $100,000 each year.
However, that doesn't mean these consumers are spending freely. Perhaps one of the biggest differences between this so-called "new rich" demographic and the top 1 percent of earners is that the former are more likely to have a variety of long-term financial commitments that affect their overall spending behaviors. For example, Yahoo Finance cited a report from the National Center for Educational Statistics that found college tuition prices have skyrocketed in the last several decades, leaving many of today's wealthy households in substantial amounts of student loan debt. Along with the rising costs of health care and housing, it's not as if the top 2 percent of the earners in the U.S. are anxious to make daily purchases with credit cards.
Checks likely to dominate amid growing aversion to debt
Indeed, the AP said the biggest characteristic of the new rich is that they are much more economically fragile than the 1 percent. This financial instability may ultimately encourage these consumers to utilize checks on a daily basis, rather than running the risk of creating more debt by failing to make credit card payments every month. As a result, retailers who depend on this specific consumer demographic may want to consider investing in check processing machines to avoid wasting valuable time completing backroom financial tasks. Depositing checks can be a frustratingly time consuming process for managers and employees. Automated technology can make the process move much faster. In the long run, store employees will be able to devote more of their shifts to other important tasks such as customer service, marketing and sales.
December 11, 2013