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Who Wants To Hook A Millionaire?
Editor in Chief
Affluent North Americans-those with investable assets of at least $1 million-use the Internet more than other consumer groups, according to the first report in the Technographics Affluent Lens from Forrester Research Inc. Millionaires do research and buy goods online, and with a focus on value and self-direction, they are more likely than other investors to maintain accounts with discount and Internet-only brokerages, says the firm.
"Retailers and manufacturers that target the affluent often adopt a defensive tone about the Internet," says Ekaterina O. Walsh, an analyst at Cambridge, Mass.-based Forrester; however, the research uncovered four misconceptions about affluent consumers: they don't like technology, don't go online, don't shop online and don't use the Internet to manage their finances.
Almost two-thirds of the affluent are "technology optimists," says Forrester, versus slightly more than half of the nonaffluent, dispelling the myth that millionaires don't like technology. The affluent own more technology products than other consumers, including fax machines, projection TVs, DVD players, digital cameras and writeable CD drives, with the average affluent household owning two PCs. They also use their PCs more often than other users, with two-thirds turning on their machines every day versus half of the nonaffluent.
Perceptions that the affluent are not online are false, says the report. Some 56% of today's wealthy households are wired versus 43% of the general population. Half of these millionaires have been going online for at least three years, the report indicates, with only one-third of nonaffluent consumers having as much experience. Beyond sending email and using search engines, reference guides and directories-usage patterns resembling other consumers-a "deeper interest in finance distinguishes the affluent from other surfers." Millionaires are 152% more likely to view stock quotes and 124% more likely to visit financial sites.
Not only are they avid surfers, the affluent are also 16% more likely than other Internet users to regularly research products online before buying. With the exception of entertainment items like music, videos and games, the affluent are more likely to buy in every product category online. Although millionaires also spend more online, they seek reasonable prices without sacrificing quality.
While millionaires are thought to demand too much service to manage their own online portfolios, they are 79% more likely to trade stocks online, 75% more likely to trade mutual funds online and 47% more likely to track their portfolios online. Some 31% use discount brokerages versus 17% of nonaffluent wired investors, and they keep more than one-third of their portfolios there, says Forrester.