Archive for July, 2016

The Global Landscape of HNWI is Changing

Friday, July 29th, 2016

Capgemini’s World Wealth Report 2016 was released a few weeks ago, and it contained a wealth of extremely interesting findings that point to a changing global landscape when it comes to high-net-worth individuals.

The report highlights many intriguing figures and observations about global wealth, including the eye-popping projection that high-net-worth individuals’ assets will likely top $100 trillion by 2025 – less than a decade away.

Net Wealth on the Rise in Asia Pacific Region

The report from Capgemini covers 71 countries and features financial data obtained from surveys conducted with over 5,200 high-net-worth individuals from 23 countries, as well as 800 wealth managers across 15 different markets.

Among some of the most surprising findings is the meteoric rise in wealth of the Asia Pacific region, which has the greatest collective wealth of any global region, thanks in particular to China and Japan. While most of the world witnessed a slow-down in the growth of their high-net-worth wealth, the Asia Pacific region saw their net growth top 4 percent in the past year.

This accelerated growth in net wealth is not an aberration – in fact, it’s anything but. Capgemini projects that that by 2025, the Asia Pacific region will total 11.7 million high-net-worth individuals, which will greatly outpace North America’s projected total of 7.6 million.

How HNWI Allocate Their WealthTargeting really rich consumer prospects for luxury brand marketing.

The Capgemini report also details how high-net-worth individuals are allocating their assets globally. According to their findings, HNWI have around a third of their total assets liquid in the form of cash or in bank accounts, while another third is invested with a wealth manager and the remaining third is split between real estate, business ventures, and other liquid assets.

A particularly interesting finding to note is the shifting preferences of younger high-net-worth individuals, in regards to how they handle their assets. Millennials and under-40 investors have tended towards banks and cash for allocating their wealth, opting for more liquidity in their assets and showing an aversion to wealth managers.

This presents an interesting dichotomy in how different generations view asset allocation, and it forces financial institutions to adapt to the needs of tomorrow’s wealthy as the percentage of younger high-net-worth individuals continues to rise across the globe.

In addition, Capgemini found that 31 percent of high-net-worth individuals use their wealth to contribute to social causes, and that half of all the world’s wealthy plan on increasing their contributions to social impact causes over the next few years.

Luxury Buyers are More Discerning than Ever

With a globalizing luxury market and volatile economy becoming more of the norm, high-net-worth individuals are much more careful with their money and how they spend it. The need to make smart investment decisions, coupled with an increasing number of options available for consumers, has led to more discerning and demanding luxury buyers. As digital channels enable consumers to explore more investment options and conduct their own research, luxury brands will have to adapt to a rapidly changing market in order to appeal to the evolving needs of consumers.

Time for the Luxury Market to Capitalize on Evolving Global Wealth

As the global wealth landscape continues to evolve, the luxury market must evolve along with it. From wealth managers to investment firms and luxury brands, the ever-changing needs of the world’s wealthiest are becoming more and more diverse – just as diverse as the demographics that comprise the global population of high-net-worth individuals. Despite such a constantly shifting landscape and an increasing number of digital channels through which to communicate, Wealth Window can help you gain direct access to a powerful audience of high-net-worth individuals and generate sub-segments based on various attributes including net worth, home value, luxury travel, power spending and more.

Are you ready to reach high-net-worth individuals with your strategy and messaging? Contact me to learn how.

How Luxury Brands Can Crack the Code on Audience Segmentation

Friday, July 15th, 2016

For luxury brand marketers, the time has never been better to invest heavily in digital. If the goal is to put your brand and your message in front of as many eyeballs as possible, and if most eyeballs spend a large portion of each day glued to some type of digital screen…well, you can see where this is headed.

In fact, 71 percent of luxury brands increased their digital marketing budgets last year. To add to that, over half of all luxury companies expect to spend at least 30 percent of their marketing budget on digital in the coming year.

But despite all of this money being put into the digital sphere, the returns just don’t seem to be adding up. As it turns out, the biggest thing that luxury brands have missed in their digital media frenzy, is that getting in front of the most eyeballs is less important than getting in front of the right eyeballs.

Herein lies the problem for many luxury marketers: the typical affluent consumer doesn’t quite look the same as he or she used to. In fact, there may no longer even be such a thing as a “typical” affluent consumer.

wealth is a moving target

Reaching affluent consumers is a moving target.

Today, the techie with a studio apartment in Silicon Valley buying tickets to Comic Con can be a luxury consumer in the same way that a CEO with a penthouse on Madison Avenue buying tickets to Cannes is a luxury consumer.

Audience segmentation is difficult when your audience is continuously evolving, and trying to navigate this nuanced and fluid environment is indeed a problem for luxury marketers in the digital sphere – but it’s not a problem that data can’t solve.

With the right data, luxury brands can target the right audiences – instead of opting for the old “spray n’ pray” method. Smart, innovative data, like what Wealth Window has to offer, makes it possible to engage and influence new audience segments that are out of reach for many luxury marketers.

In a pre-digital world, luxury brands could get away with mass marketing to the most affluent consumers and ignoring the rest of the field – but not anymore. New pockets of wealth are emerging among previously untapped demographics like millennials, women, and minorities. Different audiences are interacting and talking about luxury across many different digital media platforms. The focus needs to shift to accommodate not only today’s luxury consumers, but tomorrow’s as well.

Instead of broad, reach-focused media buys, luxury brands should be focused on data-driven behavioral audience segmentation. Instead of focusing on brand awareness, luxury marketers should be creating and nurturing more intimate relationships with smaller segments of like-minded consumers who will, in turn, influence each other.

The bottom line is that luxury brands are currently struggling with an audience identity crisis when it comes to digital marketing – but it doesn’t have to be that way. Segmentation can help luxury brands crack the code on who their best audiences are, and how to speak to them in the most impactful way – and data is the key to doing just that.   

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