Archive for the ‘Sustainable Luxury’ Category

Today’s Millennials; Tomorrow’s Loyalists

Wednesday, June 21st, 2017

alc_wealth_window_millennials-300x198-1-300x198 copySavvy luxury marketers in search of growth are now targeting millennials – for both short-term gains and long-term relationships. While only a small percentage of millennials can be defined as “affluent,” a larger percentage purchase luxury items and experiences on a selective basis. It’s these consumers that luxury marketers want to attract today…and cultivate for tomorrow.

Beyond their transactional activity, it’s interesting to note that millennials exhibit different behavioral tendencies as well. They tend to be more innovative, entrepreneurial, and opportunistic than prior generations. From an investment perspective, millennials are 2.8X more likely to use or try hedge funds… 3.4X more likely to be serial entrepreneurs… and 5.6X more likely to have achieved significant gains by taking big risks.

Plenty has been written about millennials – and much of it suggests that they are a monolith – but the fact is, these aggregated insights are just that: aggregated insights. Luxury marketers interested in attracting millennials need to be even more precise and exacting to understand which millennials are potential prospects… how much they are likely to be worth today and tomorrow… and which ones are interested in more aggressive investment opportunities. At Wealth Window, we’ve built our audience data to do precisely that. We identify new, emerging wealth that others miss – and the millennials who are gravitating to luxury today.

The right millennial with the right circumstance is available right now. Don’t wait; find them with Wealth Window. Let’s connect.

The Future of Luxury

Thursday, May 25th, 2017

Every day, I talk to luxury marketers. Recently, we’ve been talking about luxury retail. Here’s what I’m hearing…

Retail continues to be transformed. Changing shopping patterns, emerging technologies, and evolving consumer tastes are impacting the way the affluent shop — and what they buy.

New technologies at retail are being tested and refined. Many of these technologies are data driven, including digital identification solutions, innovative mobile apps, and wardrobe assistance driven by machine learning.

Which of these technologies will be broadly adopted? We’ll have to wait and see. But it’s clear that HNW consumers have increased expectations about their interactions with luxury brands – and data is often facilitating these enhanced experiences.

At ALC, our luxury clients are now integrating important insights that go beyond basic demographics and transactional activity, to empower more personalized communications, integrated with new techniques.

In this fast-moving world, we can’t wait for tomorrow’s technology to drive our business today. But, we can leverage a wealth of data that’s available right now to deliver more relevant, personalized communications and experiences.

Finally, if you’re having success with a new technology or an innovative data strategy, please let me know. It would be a luxury to know even more about how to succeed in the future.

Attracting the Affluent Through Smart Offers and Targeting

Wednesday, May 17th, 2017

alc_wealth_window_luxury_credit_card-300x198As we all know, the battle to attract affluent consumers can be intense. Naturally, having great consumer insights is key to winning. Therefore, it’s valuable to understand what strategies credit card companies are using to acquire new customers, since card marketers have a very rich understanding of consumer behavior and spending habits.

So what’s happening these days in the credit card category?

While American Express has long been a dominant player, and continues to innovate, other financial institutions are realizing the value of affluent consumers and have developed prestigious cards with rich rewards to attract them.

In November, Chase made a concerted effort to attract affluent customers using powerful data strategies and highly-lucrative acquisition offers for the launch of their flagship card: The Chase Sapphire Reserve. The card offered an unprecedented 100,000-point sign-up bonus, plus many concierge-level benefits. It worked. Within months, 900,000 people applied for the card, despite an expensive $450 annual fee. (In fact, the acquisition appears to have been too rich: Chase has since reduced the sign-up bonus to 50,000 points.)

Not to be outdone, U.S. Bank recently released their own luxury card. It features a sign-up bonus of 50,000 points as well as many of the same travel-oriented benefits that made the Chase card so successful.

American Express, the longtime luxury leader, also responded to category activity by increasing the benefits of their Platinum Card.

So… what can we learn from credit card marketers?

The bar to attract affluent customers continues to increase. Luxury brands are willing to entice consumers with ever-increasing offers and enhanced services. However, given the increased costs of these services, brands must be really smart about their data targeting and offer strategies.

Hopefully, you are deploying new, smarter data strategies – aligned with consumer wants and expectations – to build your business. As always, we at Wealth Window, are here to help you pinpoint the exact customers, exhibiting the exact behavior you need, to craft messaging that will resonate effectively. My prediction, if you use Wealth Window, success is in the cards for you.

The Magic of Q1

Tuesday, January 10th, 2017

First, I hope you had a Merry BIG Christmas. I am overjoyed that so many of our Wealth Window clients reported a strong season!

As you begin 2017, I suggest you take advantage of what I call, “The Magic of Q1.”

Our experience shows that Q1 is a terrific time to test: a new strategy, a new audience, and a new channel. In fact, January and February are two of the best performing months for marketing. Additionally, if your new strategies prove successful in Q1, you can benefit all year. Conversely, if they underperform, you can cut your losses quickly.

When it comes to testing, we suggest a “Structured Spending” approach for many luxury brands: 70% of your dollars go to what has proven to work; 20% is invested behind strategies that show real promise; and 10% is allocated to dramatically different approaches that have the potential to deliver vast improvements.

Here are a couple of exciting ideas we’ve seen work for our clients:

 

Thankfully, as we enter 2017 things are looking bright. The market remains strong. Consumer optimism is high. And government policy should be advantageous for luxury brands.

Yet since markets and consumers can be fickle, you won’t want to lose any time testing innovative strategies in Q1. I’m happy to help in any way I can to ensure you experience a magical first quarter.

How will Donald and Melania Trump Impact Luxury Brands?

Wednesday, November 16th, 2016

Photo Courtesy of People Magazine

Photo Courtesy of People Magazine

History suggests that America’s first families often have significant influence over the purchasing behavior of Americans and people around the world. This was certainly the case when John and Jackie Kennedy brought their sophisticated and affluent style to the White House, replacing the rather conservative, 50’s era style of the Eisenhower’s. (Tuxedos anyone?) Ronald and Nancy Reagan brought Hollywood glamour to Washington—an obvious departure from the homey style of the Carters. (Oscar de la Renta and Bill Blass certainly benefitted.)

And now, Donald and Melania Trump are bringing their lifestyles of the rich and famous to the White House, and, let’s face it, the Trumps have never been shy about the media. This begs the question: How will their affluent, opulent way of life influence luxury brands and spending on upscale goods and services?

Here are some questions that are on my mind – and probably yours as well:

 

These are just a few of the questions that will be answered over the next few months, and during the Trump presidency. But one thing seems certain, the rich will get richer, and smart marketers should be thinking about how to leverage this unique opportunity.

If you think there’s a trend you can capitalize on, let’s talk. I’d love to hear your thoughts.

Millennials are Changing the Rules of Affluent Marketing

Monday, October 31st, 2016

affluent milliennialsMillennials are a unique generation of consumers and they’re forcing marketers to forget pretty much everything they know when it comes to affluent marketing.

MediaPost’s Engage: Affluent blog recently featured an interesting post that highlighted the difficulties that many marketers are facing, as they scramble to rethink their marketing plans to adapt to the preferences of millennials.

What they’re finding is that the normal marketing strategies that have worked for generations – particularly in steadfast industries like insurance – are just no longer effective when it comes to millennials.

Now, marketers are being forced to develop new plans to reach this notoriously fickle bunch because Millennials are quickly supplanting older generations in the marketplace.

Millennials are more than willing to spend on luxury goods and services – however, what sets them apart from previous generations is that they’re much more selective when it comes to making purchase decisions and aren’t swayed by the reliable marketing tactics of old. Add to that the fact that Millennials themselves are a diverse and widely varied demographic, and you have a recipe for disruption.

The blog post points to a few interesting examples to emphasize this point. For example, affluent Millennials’ propensity towards indulgence rather than saving is causing headaches for the finance industry, while their reluctance to buy gas-powered cars is throwing a wrench (pun definitely intended) into the automotive industry’s marketing plans.

So what’s the best way to plan for those unpredictable Millennials? Well, you can start by forgetting about the one-size-fits-all approach to marketing, and instead implementing segmentation. Audience segmentation will allow you to tailor your message to better appeal to pockets of younger affluent consumers who have different wants and needs.

Since we’re on the topic of how to reach the elusive millennial audience, Wealth Window is an invaluable resource when it comes to targeting young affluent consumers. Wealth Window uses proprietary methodology that goes beyond the traditional census data, geo-targeting and demographics to track and identify affluent Millennials, providing unique access to this increasingly in-demand (and hard-to-target) audience.

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.   

Green is the New Color of Luxury

Tuesday, September 30th, 2014

Affluent, eco-conscious consumers are driving the greening of luxury brands.

Affluent eco-conscious consumers are driving the greening of luxury brands.

Well not literally, but luxury brands are becoming more sustainable, spearheaded by such visionaries as Bernard Arnault, CEO of LVMH (Louis Vuitton & Moët Hennessy). He states that, “Environmental protection is not merely an issue of generosity or philanthropy. It is critical to our future.” LVMH is guided by a global charter that defines environmental protection criteria and goals. Its Environmental Affairs Department works to ensure the best ecological practices at all levels of production.

There is plenty of evidence that sustainability is a rising priority among purveyors of luxury goods…

  1. According to Fashionbi, most luxury companies locate their production houses at premium locations – i.e. “Made in Italy,” “Made in France” – thereby avoiding a larger carbon footprint associated with manufacturing all over the world.
  2. Gucci has attained the SA8000 Social Accountability Standard, which includes reduction of its environmental footprint. The company’s plant has attained ISO 14001 Environmental Certification.
  3. Greenpeace named The Valentino Group #1 in terms of Dedication to the Environment.
  4. The Copenhagen Fashion Summit is the world’s largest event in sustainability in fashion.
  5. Piaget states on its website that the company “has decided to take action to reduce our impact on the environment by using raw materials that have been extracted and processed according to the strictest standards and by implementing strong business ethics.

 

Of course a strong driver of increased environmental responsibility is the demand among luxury buyers that their brands are backed by sustainable companies.

The Luxury Institute finds that younger, more-affluent consumers increasingly seek information about corporate social responsibility. “Young consumers believe that caring about the environment is how you create a meaningful life,” notes Milton Pedraza, the firm’s CEO.

Affluent travelers are taking “eco-luxury” excursions guided by fast-growing eco-tourism companies such as National Geographic Expeditions. The Four Seasons Resort in Maui even provides eco-friendly limousine service featuring the all-electric Tesla sedan.

Luxury consumers are becoming more cautious in their choices and look not only for quality, but also to a product’s materials, how it is made and the company behind it. As more brands embrace sustainability and speak to their green initiatives, customers will become more demanding in their preferences for environmental accountability.

Oftentimes “green” products may carry a higher price tag, but as you can see, there is a market for the greening of luxury. In fact, Wealth Window has identified over 15 million “Green Affluents,” who expect their favorite luxury brands to serve as industry leaders in their sustainability practices.  These affluentials are making a positive impact on the environment by voting with their wallets.

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