Archive for the ‘Wealthy Boomers’ Category

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.

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.   

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.

The Rising Tide of Mass Affluence Among Women

Wednesday, February 4th, 2015

Women are experiencing a rise in female mass affluence and are prime prospects for luxury marketers and financial service providers.

America is seeing a rising tide of affluent women becoming captains of their own ships.

Now that women control half of the private wealth in the country,* it’s time for financial service providers, luxury real estate marketers, non-profits seeking high dollar gifts, and every other purveyor of upscale goods and services to focus on them.

Over 41% of Americans with incomes exceeding $500,000 are women. By 2020, women will account for $22 trillion in spending as wealth continues to shift from men to women. There are numerous reasons for this trend. Here are the top 3 that I can see:

 
Constituting half of the U.S. workforce, women are empowered to take charge, “lean in,” and demand more pay. In fact, two out of five working married affluent women age 40-69 report that they earn the same or more than their husbands. Yet when it comes to investing, they lack confidence. An overwhelming majority say that it is important women have confidence in their ability to invest, but only 8% say they are. Clearly this presents a huge opportunity for financial advisors to specifically reach out to affluent female investors.

There’s a large and growing leadership of elite female role models soaring to new heights in formerly male-dominated business sectors. Here are just a few that quickly come to mind:

 
And that’s just the tip of the iceberg. A society where women can rise to the highest levels of net worth makes it possible for women in general to attain mass affluence. This rising class of self-made professional women is making a huge impact on the economy. It’s a force to be reckoned with and I suggest that a good start is to speak to affluent women as primary decision makers in a voice that will resonate with them.

* Source: The Power of the Purse: How Smart Businesses Are Adapting to the World’s Most Important Consumer – Women

Wealthy Millennials and Boomers Are Two Completely Different Animals

Monday, March 31st, 2014

marketing to wealthy millennias and boomers

Are you marketing to a lion (Boomer) or a panther (Millennial)?

It used to be that there was old money and new money and the methods of marketing to both was relatively similar. The nouveau riche aspired to be just like the upper class. They wanted to look like them. Act like them. Be them. Everyone of means lusted after the same status symbols of wealth.

Not so today. Affluent Boomers, or today’s wealthy establishment continue to seek and display the trappings of their wealth. Today’s new rich? Not so much. Just take a look at their role models—the hoodie-clad Mark Zuckerbergh vs. famous faces of mature money, say, the buttoned-up Bill Gates.

The conspicuously consumptive Boomer millionaire is vastly different than the more modestly prosperous Millennial. They are two very different animals—like a lion (The Boomer) vs. a panther (The Millennial). The King of the Jungle struts around in full mane to appear larger and put on a display of intimidation. The panther on the other hand is the stealthy Ghost of the Forest.

Are you marketing to a lion or a panther?

If it’s the lion you seek, traditional methods of direct mail continue to work extremely well. Give it a big juicy catalog rich in photographs of luxurious products, 5-star amenities, and other ways to show off their obvious wealth.

But if it’s the panther you’re after, you need to be a little more stealth yourself. This creature is accustomed to quietly consuming personalized content relevant to their interests. You see, Millennials expect the companies they do business with to be smarter about their marketing. Marketers need to recognize the changing tastes of the younger rich and communicate accordingly. This group is more about the brand experience than putting their brands on display.

To be sure, multichannel marketing is a given in our current media jungle. But the allocation of budget in the media mix must be adjusted accordingly. Heavy up on print, supported by email and digital when tracking down rich Boomers. Go a bit easier on print and stronger in the digital and email realm when setting your sights on Millennials. Timing can be tested too. Serve digital and email messaging to Boomers by day and to Millennials by night.

Successful luxury marketers are quickly taking note of these differences in both creative approach and in the media mix. Boomer money craves status and Millennial money seeks experience. This needs to show not only in where you deploy your communications, but also in how you speak to these wildly different audiences of affluence.

Therefore, the age of your high-income luxury audience plays as big of a role in the success of capturing market share as does net worth. You can still sell the steak of your luxury brand to both generations, but it’s all in how it sizzles for each is what will make the difference.

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