Archive for the ‘Uncategorized’ Category

Luxury Brands Must Control Their Destiny

Wednesday, April 5th, 2017

alc_wealth_window_luxury_brands-300x198A few weeks ago, it was announced that Neiman Marcus may be acquired by Hudson’s Bay. As we all know, evolving consumer shopping behavior and other factors continue to drive change in the luxury retail sector.

While retailers remain critical to many luxury brands’ success, we’re finding that more brands are taking control of their destiny…

Naturally, retail is key in luxury. It always has been. It always will be. But in our changing world, the more you know about your customers and prospects, the better off you are! There’s an old saying, “Trust in God, but tie-up your camels.” I say, trust in your retail partners, but own your own data!

Seriously, if you’re interested in understanding the benefits and options in having a custom-built audience or licensing data – and giving yourself an insurance policy – I’m happy to help!

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.

Luxury Consumers Are More Plentiful and Powerful Than You Thought

Wednesday, September 9th, 2015

Luxury Consumers

Luxury Consumers Wield Purchasing Power

Luxury brands would be smart to invest heavily in marketing given the U.S. market’s current state and projections.

The luxury goods industry in America is flourishing, growing and evolving all at once. As marketers work to refine and optimize their brands for digital, they’ll find that their audience is actually much wider than historical data suggests. Likewise, the top tier of luxury consumers is continuing to reinforce their financial strength. Here’s what you need to know:

Affluent Consumers Have Company
MediaPost’s Engage:Affluent found that 20 million adults with annual household incomes of less than $75,000 bought one or more luxury goods last year. Add that to the 22 million categorically “affluent” adults with household incomes between $75,000 and $250,000, and it becomes clear that the pool of luxury-inclined consumers is more like an ocean. It’s also safe to assume that many non-affluent luxury purchasers have the potential to become the next power spenders.

Affluent Consumers Have Power
According to Ipsos, affluent shoppers spend 3.2 times more than the average household in many luxury categories.

Furthermore, the Engage:Affluent survey showed that 21 percent of non-affluent luxury purchasers bought only one luxury item in the past 12 months. 30 percent of affluent households with incomes between $75,000 and $250,000 bought six or more luxury items, and more still – 36 percent of households with incomes of $250,000 and higher – also bought six or more items. Meanwhile, only 14 percent of households with incomes under $75,000 reported buying six or more items, and their repeat purchasing peaked at just 3 items (28 percent).

The takeaway here is that while non-affluent consumers add to the market’s depth, the true spending power remains with the affluent. Nearly half of affluent buyers spent $3,000 or more on their most recent purchase, compared to the one in six mass-market purchasers who spent that amount. Overall, affluents represent roughly 50 percent of the nation’s income and 40 percent of all consumer spending, HubSpot notes.

The Consumer Base is Growing
In 2014, Reuters reported that the global number of luxury buyers had reached 330 million and was expected to swell to 500 million by 2020. The numbers came from a Bain & Co report that also confirmed the power of affluents, as the study found that more than half of global luxury spending came from the wealthiest age bracket, those 49 and older. While many of the 10 million new luxury consumers per year over the next four years will be attributed to rising wealth in other parts of the world, the U.S. will certainly carry its weight as those with luxury tastes and emerging wealth begin to realize increased spending power.

Luxury Brand Buyers Are At Your Fingertips
Luxury marketers and agencies can take advantage of these buying trends by directly targeting the ultra-affluent. With Wealth Window’s Power Spenders database, you can reach more than 21 million consumers with high discretionary spending on non-essential items. These individuals define the luxury lifestyle and spend freely on the brands they love. So, are you ready to connect with them? Click here to learn more.

Who is the Affluent Millennial? 3 Things We Know

Thursday, July 23rd, 2015

affluent millennials

The Millennial 1%: Young, Rich, and Redefining Luxury

There’s a wave of new money in the consumer marketplace, and it’s coming from a group you might not expect: millennials.

While much of Generation Y is plagued by historic student loan debt and jobless woes, more than 6.2 million millennials ages 18-34 have household incomes over $100,000, says millennial marketing expert Jeff Fromm.

According to the 2014 Ipsos Affluent Survey USA, millennials now account for nearly a quarter of affluent U.S. households and counting. These are young, successful and savvy professionals who – as they enter their collective stage of wealth accumulation – are changing the way marketers and brands communicate their messages. While they only comprise less than 10 percent of their demographic, affluent millennials carry significant social and financial influence among their generation, which represents roughly one-third of the entire U.S. population.

Who exactly is the affluent millennial? What are their preferences and tendencies? How are they reached? Here are three things we know:

1. They’re Moving Fast
According to Fromm, 50 percent of affluent millennials are married, and six percent are engaged. Affluent millennials are also more likely than their non-affluent counterparts to be expecting a child within the next year.

Emerging from the challenges of the recession with confidence in their financial standing, affluent millennials are not afraid to make life decisions. They’re starting families, buying homes, making investments, running businesses and launching new ventures – all in their 20s and 30s.

2. They’re Redefining Luxury
Affluent millennials are rewriting the definition of luxury. In 2012, luxury advertising executive Duke Greenhill addressed their pull in a popular Mashable article titled, “How Brands Can Prepare for Affluent Millennials.”

Greenhill made three key points in the shift from the luxury baby boomer segment to that of Generation Y:

  1. Millennials appreciate craftsmanship and design.
  2. Their quest for status and achievement is ongoing.
  3. They see luxury value with a pack mentality that Greenhill describes as “inclusive exclusivity.”

Wealthy millennials are less driven by blind brand loyalty and more attracted to experiences, stories and adventures. More importantly, they’re expected to dominate the luxury marketplace within the next few years.

3. They’re Dictating the Marketing World
It’s no secret that millennials love social media. They invented it, and it’s their preferred method of communication between brand and consumer. 88 percent of affluent millennials visit at least one social network per week, with Facebook being the most prevalent. This explains why mobile advertising drove 73 percent of Facebook’s revenue in Q1 of 2015.

Social media is just the start, though. Fromm’s assertion that affluent millennials “feel more confident in their decisions and don’t require as much hands-on assistance from brands” aligns with the inbound marketing boom we’re seeing today. According to the Content Marketing Institute, 72 percent of B2C marketers were producing more content in 2014 than they were the previous year. To a similar tune, Curata found that 71 percent of surveyed B2C marketers said they would increase their investment in content marketing “without a doubt.”

In place of the traditional aggressive sales mindset, Fromm says the focus for marketers has shifted to a hands-off approach. This is particularly true in the financial arena, where he notes Charles Schwab and American Express as successful purveyors of content that affluent, inspired millennials find useful and engaging.

The Key Question for Marketers: Will You Reach Them?
The affluent millennial may seem like a needle in a haystack – an average looking 20-something at a hip bar in a big city. But with Wealth Window, you can gain direct access to this powerful group. Better yet, together we can generate sub-segments based on various attributes including net worth, home value, luxury travel, power spending and more.

The question now shifts from means to action. Are you ready to truly reach affluent millennials with your strategy and messaging? Contact me to learn how.

Nonprofits Are Benefitting from the Wealthy’s Desire to Give Back

Monday, July 6th, 2015

A vast majority of high net worth individuals donates to nonprofit fundraisers.

High Net Worth Donors give because they believe nonprofits can make a difference.

As many charitable organizations return to levels of gifting not seen since pre-recession fundraising, a refreshingly optimistic new survey is shedding light on where that money is coming from and why.

The 2015 U.S. Trust Insights on Wealth and Worth Survey, conducted by Bank of America’s Private Wealth Management arm, identifies “what the wealthy consider to be important elements of a life well lived.” Among them is a strong desire to give back. In fact 78% of the survey respondents who hold investable assets of more than $3,000,000 participate in traditional philanthropic activities for many good reasons such as:

 

You see, the 1% do have a heart!

An earlier report, The 2014 U.S. Trust Study of High Net Worth Philanthropy, found that 98.4% of high net worth households gave to charity, a 3% increase over the previous year. 84.4% of those gave with the intention to advance social or charitable goals. The report notes that high net worth donors are motivated to give because “ they feel moved about how their gift can make a difference.” The vast majority believes that nonprofit organizations have the ability to solve societal problems.

Of course this is not lost on directors of fundraising at all types of nonprofits from cultural to environmental to political to health and humanitarian. Acquiring a few mission-driven, high net worth donors can add up faster than gaining many low dollar donors signing up for a free umbrella in return.

The operative words here are “high net worth donors.” There are thousands of donor and income lists available on the market, but where does a nonprofit go for an audience of high net worth individuals identified as proven donors?

Why Wealth Window Major Donors of course. Right in synch with the rise in the number of affluent individuals in America, I can report higher numbers of wealthy donors on the file — nearly 7 million in total. That number was just 6 million a year ago. I can also help you navigate to the types of donors best suited to support your organization by types of causes they join. I also recommend that you test our “Power Donors” by how many thousands of dollars they give: $2,500-$4,999; $5,000-$9,999; and $10,000-$14,999.

HNWIs Demand for Luxury SUVs On the Rise

Tuesday, June 16th, 2015

Market luxury automobiles and SUVs to high net worth individuals HNWI.

High Net Worth Individuals are driving sales of Luxury SUVs.

Suddenly the wealthy are trading in their sports cars for more practical luxury SUV models. CNBC reports that super-luxurious SUV sales are up 44% this year.

Lamborghini hopes to muscle in on market share in 2018 with the introduction what many are calling the “Rambo Lambo.” This luxury SUV will join the likes of the Porsche Cayenne, Cadillac Escalade, and Land Rover’s Range Rover. There will also soon be new models from Tesla, Bentley, Jaguar, and a rumored Rolls-Royce.

Trucks in Tuxes

Fortune magazine is calling it a “Seismic shift in the luxury car market.” New Range Rovers are on a 6-month waitlist, the number of Escalades has doubled, and sales of a flashier Lincoln Navigator with LED running lights are up 84%. Hyundai, yes the maker of the $15K Ascent, is even mulling a luxury Genesis SUV.

In all, luxury SUVs constitute 46% of the high-end auto market, while sales of luxury sedans and sports cars are slipping. It can’t just be that cheap gas is driving this trend. Those who can afford to sit in the captain’s chair of a sweet $80,000 ride can afford to pay a few more bucks at the pump. So what’s putting these pricey SUV’s in the fast lane?

My Opinion? Three words: High Net Worth 

As more people enter the ranks of High Net Worth Individuals (HNWIs), they are opting to drive big, roomy, luxurious SUVs. While there may be some cannibalization of smaller models among the luxury SUV brands, overall sales are rising.

Notice I did not say “high income.” A nice salary is not enough to comfortably put you behind the wheel of these large automobiles. A sizable, diversified investment portfolio can, which is what an HNWI has.

How do I know there is a growing number of HNWIs? We just updated Wealth Window and I see more than 19 million multi-millionaires on the file. This time last year we reported 15 million. I also see nearly 700,000 luxury automobile owners on the file. Luxury auto dealers, and all luxury retailers for that matter, might want to steer these HNWIs into the showroom. Let me know if you would like to test-drive the list.

Now Trending Among Affluent Foodies: Culinary Tourism

Tuesday, May 26th, 2015

Market culinary travel destinations to affluent high net worth travelers.

Affluent foodies are flocking to culinary travel destinations.

According to the 2015 Virtuoso Luxe Report, Culinary travel is one of the top 10 travel trends of the year. Take the Silverado Resort and Spa’s Royal Oak in Napa Valley for example. Here culinary travelers can enjoy a seven-course, farm-to-table feast at Thomas Keller Restaurant Group’s pop-up restaurant Ad Lib for just $295 with wine pairing. Make your reservation soon — it pops down in October!

Meanwhile there’s a revolution in the cruise industry’s dining culture. Geoffrey Zakarian, a Food Network Iron Chef and the chef at Lamb’s Club in New York, has restaurants on two Norwegian Cruise Line ships. Royal Caribbean’s Quantum of the Seas is a floating home for Michael’s Genuine Pub of famed Miami chef Michael Schwartz. Up on the next deck is Jamie’s Italian restaurant, of British celebrity chef and star of “The Naked Chef,” Jamie Oliver. Crystal Cruises operates a restaurant in partnership with celebrity fusion chef, cuisine Nobu Matsuhisha.

Affluent travel destinations are also turning to culinary experiences to entice affluent foodies. At the Ritz-Carlton on Seven Mile Beach, famed chef Daniel Boulud, of NYC’s famed Daniel, dazzles crowds at the Cayman Cookout, an annual event that brings in top celebrities like Marcus Samuelsson, Jose Andres, and Anthony Bourdain to spice things up for a well-heeled audience of jet-setters.

Serious epicures can also delight in hands-on extraordinary food-focused experiences in far-flung places. Guests at Peru’s Inkaterra Machu Picchu Pueblo Hotel learn about the local tea by picking, grinding and bagging leaves themselves. Istanbul offers insider tours to the city’s famed bazaars and classic Turkish meal cooking lessons back at the hotel. In Kenya, luxury tent campers pick fresh produce from organic gardens and assist in creating an alfresco lunch, surrounded by the Masai Mara game reserve.

“Unique food and drink are the perfect attractions, especially for second and tertiary destinations that now must market more proactively in the globally competitive market,” states Erik Wolf, President and CEO of the International Culinary Tourism Association.

Now if only there was a way to reach high-net-worth travelers with a passion for gourmet dining. Oh but there is! Wealth Window can put that package together for you.

Younger Affluents Want to Retire Early and Make Money Too

Monday, May 11th, 2015

The young and affluent are retiring earlier than their Boomer parents.

High net worth Americans, or those with more than $1 million in investable assets, plan to retire by age 56. Average holdings for these retirees tend to be $3.2 million, but the younger the millionaire, the lower the target retirement age.

A recent study by BMO Private Bank finds that one in five Americans with more than $1 million in investable assets plans to retire before 40. While most want to spend their retirement traveling, over half intend to keep earning income by working part time, starting a new career, or launching their own business.

In fact some 33% of retirees with $1 million to $5 million in assets continue working, not because they have to, but because they want to. Half have shifted into a different line of work to pursue a passion, experience new things, or enjoy greater flexibility.

Jack Ablin, CIO of BMO chalks this phenomenon up to the Millennial mindset. They share different priorities than their Boomer parents. They’re less tied to a single career path and more easily maneuver through various income-producing positions throughout their working life. That leaves them more focused on their quality of life than on an individual job.

What can marketers do with this information?

Millionaires in their forties or early fifties have retirement or some kind of lifestyle change on the mind. Young, wealthy retirees (or potential retirees) may be your best mail order candidates. Many are still earning income, while their portfolio growth may outpace their spending. They’re looking to use their financial freedom to feed their intellect and find new activities, which is why checking the mail and finding new opportunities could be one of their favorite parts of the day.

A few ideas jump right out at me…

 

The young, wealthy retirement community presents a lucrative audience expansion opportunity for many types of marketers. Of course the key is identifying young high net-worth individuals, not just high-income earners. In order to retire, there must be a nest egg of at least $1 million, which many young “retirees” plan to grow.

The Definition of “Accredited Investor” Will Remain the Same

Friday, April 10th, 2015

SEC committee advises that “accredited Investor” definition should remain at $200-$300K HHI & $1M net worth.

SEC committee advises that “accredited investor” definition should remain at $200-$300M HHI & $1MM net worth.

Good news for startups and budding enterprises seeking investment from angel investors…

The SEC recently heard from its Advisory Committee on Small and Emerging Companies regarding Recommendations in the Case to Change the Definition of Accredited Investor.” There was talk about raising the bar to $500M HHI and net worth to $2.5MM, which would have decreased the number of individuals that marketers and growing companies could target for investment capital.

Here’s the main takeaway: The committee found little or no evidence to suggest that the existing definition of accredited investor has led to widespread fraud or other harm to investors.” Quite the contrary, they found “substantial evidence to suggest that the current system works and is critical to the support of smaller public companies and emerging companies.”

The SEC will continue to collect data on the subject, but suggests that the focus should be more directed to enforcement efforts and increased investor education rather than raising the threshold of income and net worth. In fact they felt that raising the bar would have a disproportionate effect upon women and minority entrepreneurs.

Recognizing the importance of small and emerging companies as drivers of the economy and their reliance on raising capital from accredited investors, the SEC is taking a “do no harm” approach so as not to shrink the existing pool of accredited investors (and the pool of capital they bring to the table).

Currently, accredited investors must earn an annual income of at least $200,000 alone or $300,000 combined with one’s spouse, or a net worth of at least $1 million (excluding the value and mortgage debt of his or her primary residence).

While swindlers like Madoff may unfairly damage the reputation of investment opportunity pitches in general, in the angel investing community fraud is virtually unknown and next to impossible to perpetrate says Christopher Scott McCannell of the Angel Capital Association. “Entrepreneurs make their pitch to angel investors who research companies, analyze economic potential and invest capital after due diligence.”

This brings me back to the idea of enforcement. I’m not sure what that looks like on the government side, but I suggest that marketers seeking accredited investors do their own due diligence. They must make certain that their data providers verify that all individuals are in fact bona fide accredited investors.

A reputable accredited investor data provider should:

  1. Vet the data that they collect and append from each source.
  2. Double and even triple verify the information across multiple sources.
  3. Perform outside audits that confirm the accuracy of the data.

 

In a sense, financial marketers seeking individuals with the means to fund startups and help entrepreneurs must look for “accredited data providers.” Ask questions about the data and who may currently be using it. Are there any case studies that can be produced? Ask for references.

If the government specifically states that “enforcement” is the road to take to eliminate the potential for fraud in the accredited investor sector, then you will want to a data provider with a sterling reputation. On top of being in compliance with rules surrounding the marketing of financial services to accredited investors, you will be working with the type of quality data that can yield the ROI that financial marketers watch ever so closely.

The Digitizing of Political Campaigns

Wednesday, March 11th, 2015

Affluent online political donors by party affiliation available for digital display advertising.

Political campaigns need to target wealthy online donors by party affiliation to maximize contributions and social media interaction.

At first I couldn’t believe my eyes: “Spending on Digital Ads is Up Almost 2,000 Percent for the 2014 Election.” Nothing I know of goes up a thousand percent each year.

As a provider of both online and offline marketing data, I discovered more about this digital advertising juggernaut:

I also learned that voters who follow political figures on social media rank among the higher value constituents a politician can serve. According to the Pew Research Center, they participate in campaign activities at high rates—volunteering, donating money, and encouraging others to add their support. The web is becoming the new frontline in the battle for supporters. As Dan Pfeiffer, the president’s senior adviser, said, “To not have an aggressive social media strategy in 2015 would be the equivalent of not having an aggressive TV strategy in the 1950s. We have to go to where the conversations are already happening.”

Politicians and their organizational backers are aggressively vying for voters to “Like” them on Facebook, watch their YouTube videos, and follow them on Twitter and Instagram — Instagram being the latest social media territory for politicians to leverage.

For example, there are several Instagram accounts associated with Rand Paul, a 2016 senatorial candidate and potential presidential candidate. His personal account, “senatorrandpaul”, shows 81 posts and nearly 8,500 followers as of this writing. His PAC-operated account, “randpaul2016,” shows 124 posts and nearly 3,000 followers. I am guessing that many of these followers are also contributors to the political campaigns and PACs. (How else are you going to attract thousands of followers with just a few dozen posts?)

Politics has always been about getting the message out and controlling the daily news cycle. Now it’s also about round-the-clock messaging to followers with digital snapshots, 100-character tweets, and viral videos. Today’s online electorate has influenced media planners to place increasing emphasis on digital media budgets, which are eclipsing traditional advertising outlets at a pace never before seen.

Organizations operating social media accounts for their candidates and causes are big spenders in political digital advertising. They need online followers and the best way to capture them is online. As the 2016 general election heats up, the web is already blowing up with political display ads and videos.

The battle to control the hourly news cycle for this upcoming election is going to get costly. Politicians and organizations need to capture big-time donors to fund their social media strategies and the best way to do that is by reaching wealthy, politically-motivated donors 24/7 wherever they go online. I suggest this can be accomplished by attracting wealthy donors by party affiliation to donor landing pages with digital display ads and retargeting them should they leave without taking action.

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