Millennials and Generation Z are widely projected to account for more than 40% of all luxury good sales by 2025. Yet that sizeable piece of the pie may be largely subject to shifts in the economy. Whereas the ultra-high-net-worth individual (UHNWI) has the means to spend at will on luxury even in a down market—making them coveted above all other demographics. In the midst of 2020’s historic drop in retail, the UHNWI was largely responsible for keeping ships sailing for many luxury brands—large and small—based upon how well they marketed to these individuals. With a full economic recovery from the COVID pandemic projected to span several years, a dedicated focus on courting and retaining UHNWIs should become a primary focus, apart from winning the attention of the broader consumer groups whose spending is more so shaped by circumstance. A character profile that cuts across all segments of age, geography, gender, and background—the UHNWI is however not a mystery, and certainly not a unicorn. Substantial research has gone into tracking and defining their traits. And while they do spend an average of 3 hours a day on social media, their smartphones, tablets and laptops are hardly the only place they shop. Luxury brands must have fully integrated online and real-world channels to keep pace with a world increasing fluent in e-commerce and expecting to be wowed by time spent in-store. Allow us to outline a few key principles of reaching the UHNWI and maybe dispel a few misconceptions along the way.
CREATE AN EXPERIENCE
Luxury consumers are hungry for a heightened in-store experience. We’re seeing more and more luxury stores merging lifestyle elements with retail—from drinks and dining to art and music—creating blended environments that emphasize experience. Retailers should be asking: what experiential offering would truly immerse customers in our brand?
VAMP UP CUSTOMER OPTIONS
HNWIs expect individual attention and care. For luxury, physical spaces still provide that crucial opportunity to interact with a product—to examine, feel, and see the quality and value firsthand. Customers across all demographics may switch between visiting brick-and-mortar and digital spaces multiple times before making their purchase. Yet HNWIs expect greater range and flexibility in shopping and purchase options. Stay current with online features like in-store touchscreen displays that allow customization and instant ordering. Many successful brands are getting rid of the cash wrap desk in favor of tablets and personalized service.
LEVERAGE YOUR CHANNELS
Thinking that online exists to drive traffic in-store is outdated and a sure recipe for stagnation. In some way, an online touchpoint has influenced 40% of all luxury purchases, according to research by McKinsey. A true omni-channel strategy drives traffic from online to in-store, and from in-store to online. You want your channels to continuously enchant, mesmerize, and tantalize—compelling UHNWIs to continue shopping. Create a seamless loop.
To not lose the luxury essence of your brand, remember to resist being drawn into mass marketing and the loss of exclusivity. Customize experiences and communications wherever possible, and be exceedingly targeted in your digital spend. You don’t need to speak to everyone, just the select few. The exclusivity of your brand will inform the desires of the aspirational.
FIND THE BALANCE
There is a balance out there for every business between being too online-centric and too offline-centric. Find the right balance for your UHNWI customers by actively listening to their feedback and integrating lessons learned to fill gaps for them specifically. The goal is to create a more craveable experience, so they look forward to coming in store and can’t wait to open your next email.
FORM A UNIFIED BRAND PRESENCE
For UHNWIs to fully trust your brand across multiple channels, they must sense that what they’re connecting with is a solid presence. Brand elements like photography and brand voice must resonate with the value of the brand and be unwavering. The singularity of how you are known to these customers can be evolved and explored but should never be taken lightly or toyed around with.
MEET THEM WHERE THEY LIVE
It is essential be versed in exactly which platforms HNWIs are active on. One major misconception is that digital marketing is incompatible with luxury. Yet 98% of HNWIs access the internet daily and digital marketing to them provides better ROI than traditional media. Yet whether buying paid Social, placing a two-page spread in Vogue, or optimizing SEO—expect the HNWI to be specific in their interests, and be just as specific in where you target them. Determine the precise keywords they use. Create stories they care about. And place articles in publications to which they listen.