Reaching the global tribe of the super-rich
High-net-worth consumers are digitally fixated, experience-loving and more likely to regard themselves as part of the affluent global set than a citizen of their home country, suggesting marketers need to take an international approach to their communications.
“The affluent consumer has gone from being a citizen of their country to a citizen of the affluent world,” asserts Clayton Ruebensaal, vice-president of global marketing at the Ritz-Carlton Hotel Company.
He believes members of this “global tribe” now have more in common with each other than the general consumer population of their home city, meaning marketers need to reassess the way they communicate and have a consistent approach across borders.
The global luxury market is on track to hit €223bn (£174bn) this year, a 7% increase on 2013 according to Bain & Company’s annual global luxury study. Spend from tourists drives most markets except China, Japan and South America, so it is more important to look at who is buying than where they are buying, the research suggests.
“With such cross-pollination of luxury spending, it no longer makes sense to think only in terms of geographies”
Claudia D’Arpizio, Bain
“With such cross-pollination of luxury spending it no longer makes sense to think only in terms of geographies,” says Bain partner Claudia D’Arpizio. “The focus is shifting to consumers, with local trends and tastes representing only part of the picture.”
This new mindset has important implications for luxury brands as it requires them to think global. “The concept of fashion seasons, a key pillar of this industry, [is] becoming obsolete,” she adds.
What affluent consumers want is changing too, with experiences becoming more important than possessions for 53% of high-net-worth (HNW) individuals in the UK – those with assets of more than £315,000 – according to the GfK Roper Reports Worldwide. This compares with 47% for those who do not fall into the HNW category. The trend is even more pronounced in high-growth Asia.
“It’s about first nights, first to market, private views and holidays off the beaten track,” says Joseph Stanton, director and general manager of market opportunities and innovation at GfK.
Delivering a “breathtaking” experience is what the Shard – one of the UK’s newest attractions – is built on, and its status is particularly relevant when targeting a high-end audience, according to Anna Domingo, marketing director for The View at the Shard.
She says: “We’re only 20 months old so the first thing we had to communicate was that we exist, but now our marketing is moving towards telling people about all the experiences they can share.”
In addition to the view consumers can enjoy the champagne bar, a silent disco and sky-high yoga as well as exclusive events such as a performance from the Royal Shakespeare Company. The first campaign to feature this in its messaging launches in December.
According to Knight Frank’s 2014 Wealth Report, London is home to the largest population of ultra-high net worth (UHNW) individuals – those with more than $30m (£19m) in net assets excluding their principal residence, so it is certainly a market worth tapping into for venues such as The Shard.
But Ritz-Carlton’s Ruebensaal thinks “the whole world has over-focused on the idea of experiences” so instead, the five-star hotel chain is looking to “own the higher ground above it” which, he says, is the memories.
“Everyone sells the drill but all people really want is the hole”
Clayton Ruebensaal, Ritz-Carlton
Ruebensaal likens the relationship between experience and memory to that between the drill and the hole. “Everyone sells the drill but all people really want is the hole,” he says. “Yes, I need the experience but what I really want is the memory.”
To achieve this the brand aims to provide all customers with service tailored to their specific needs. “That’s the expectation at the highest end of travel,” he says. “If you’re not doing that you’ll find yourself dipping down into four-and-a-half-star territory, which is far less profitable,” he says. “We need to focus on humans and what makes people individually special so we can do something that leaves a mark – you can’t do that in a cut-and-paste fashion.”
Ritz-Carlton spends almost $1m researching the affluent market each year and Ruebensaal reckons the audience consumes digital media “second only to teenage girls”.
“They are much more likely to have a smartphone and 27% more likely to buy goods and services online compared with mid-scale consumers,” he adds.
Claire Higgins, head of digital at high-end department store Selfridges, agrees digital is important for luxury consumers but suggest a personalised in-store experience is also crucial.
“Luxury consumers are more active on mobile than other consumers,” Higgins says. “But they are also more demanding and will do a lot of research before coming into store.”
To join up the two experiences Selfridges has developed a click-and-collect service exclusively for its Wonder Room concept in London, which houses luxury brands including Cartier.
“It means customers can order online but pick up from the boutique so they get the personalised one-on-one service too,” says Higgins.
Earlier this year Selfridges hosted The Beauty Project, a series of talks, debates and immersive beauty experiences to extend the in-store experience while engaging people online. As part of the project it worked with mobile agency LoopMe on the Hello Beautiful campaign, which allowed it to add consumer feedback to ads.
It has often been said that we live in a small world, and with digital media now connecting people, it is only going to get smaller. For affluent consumers that means brands having a seamless strategy that communicates in the same language, no matter where in the world they may be.