5 key luxury audiences: what are they and how to market to them?
At Giant Leap Digital we specialise in digital marketing for luxury brands. Much of our time is therefore spent working with our clients to understand consumer behaviour within this niche group and how we can enable their brand to resonate with a wealth audience.
However, before applying brand values and tone of voice to our campaigns, we tend to take a step back. To market to the luxury consumer, you must flip your brand approach on its head.
Rather than asking what products and services the brand can offer this market, consider what luxury consumers want and how you can make your products and services resonate with their needs. Marketing – especially digital marketing – should always be seen through the lens of the consumer.
Understanding this enables us to tailor our digital programmes much more carefully to the buying behaviours, aspirations, values, exclusivity, and emotional connections that consumers have with luxury brands.
So let’s take a look at the five key audiences in the luxury market and the nuances of each. There are further nuances within these groups as some are quite broad. But in order to categorise our luxury consumer we typically look at them in the following manner:
Affluent
This is the starting category within our ‘wealth’ groups. This audience will have a disposable income of over $100k – excluding primary home and pensions.
Their assets will typically be invested into cash, stocks, second homes, art, and cars etc. So, while this is a starting category in our wealth segments, they are already a demographic that have a handsome surplus income.
This group is typically made up of people who haven’t inherited money, but have made their own wealth; they have a strong educational background and have been successful in their chosen line of work.
But there are clear understandings about this group that can help us with how we should target them. While this group is affluent, they aspire to our next category of Wealthy. They want what the next group can already purchase – indeed this is true of all our categories as they keep one eye on the next goal in their lives.
Where this group can purchase luxury, this is normally done as a treat or as a status symbol: the designer handbag, luxury watch, or expensive (premium) car. They want people to understand that they have wealth and aren’t afraid to flaunt it.
However, they don’t live in the luxury world; they still shop on the high street and will mix regular retail brands with exclusive one-off purchases. This mantra can also be taken through their other buying behaviours – travel, cosmetics, holidays etc.
For example, we might see someone booking a five-star hotel yet travel by economy class. Or upgrading their flight seats to business but then cutting back on the location of the hotel.
This consumer is someone who likes to show prestige, but in reality, they are only dipping their toe in the luxury world.
Wealthy
This group has a disposable income of at least $500k – excluding primary home and pensions.
Again, this group wants people around them to know they have arrived. So they buy goods that show their wealth: a low-end luxury car (not premium), a bigger selection of jewellery, and more expensive watches etc.
This group is also self-made and typically come from tech, finance, media, and professional services (doctors, lawyers, pharmer etc).
They have a good educational background and can afford to not see luxury as a one-off purchase but typically build luxury into their daily lives. For example, they shop at Waitrose and infuse their home with the scent of Jo Malone or similar.
They live in wealthier areas of cities. Not the premium locations, but areas for the middle class that are safe and have good schools; desirable locations that help to show their wealth but also give them protection. Think Highbury, not Chelsea.
They care about status and want to show others around them that they can live a comfortable life.
High Net Worth Individuals (HNWI)
This group has a disposable income of between $1m-$30m – excluding primary home and pensions.
This group has similar characteristics to our Wealthy segment, but they have multiple homes and they live in more affluent postcodes. They also have support to run their homes, for example, a cleaner, chef, and gardener etc.
They want exclusivity, that is, access to products and services that our Wealthy segment can’t access. This might be through concierge services, personal assistants, or staff.
They care about showing their wealth to their friends by gaining access to items money can’t buy – the best seat in a sold-out restaurant, theatre tickets others can’t get, for example. They are members of private clubs and have influence in their own circles and broader sociality groups.
They live in luxury and can afford to buy most things in life apart from planes, superyachts, or a garage full of supercars etc.
This group tends to shrink in terms of professions – it’s at this level that we see most professionals removed, leaving only two sectors: tech and finance. Individuals in this group are largely comprised of company owners – typically self-made, with a much greater leaning towards men. But while men might be the income originators, they have a family and wife who help to spend the income.
This demographic is quite broad – the opportunities to someone with $1m disposable vs $30m are quite extreme, so there are nuances within this segment.
Ultra High Net Worth Individuals (UHNWI)
This group has a disposable income of $30m-$100m – excluding primary home and pensions. There is a small section that have inherited their wealth, but in the main, they are self-made men from finance or tech.
We start to see a broadening of hobbies at this stage, with this group having enough income to look into philanthropic endeavours. For this reason, you might notice university buildings, hospitals, or charities with the name of the UHNWI associated.
They can also afford the best life has to offer: yachts, private jets, supercars, art & collectables and multiple houses. They have staff or family offices to help facilitate their needs, with a key focus on making life as easy as possible for them.
At this level of wealth, we see a marked difference to the other segments in how they want to be seen. They want anonymity – quiet luxury.
They are more paranoid about their security and have personal bodyguards and high security around their homes. These people will be known for their wealth and want to blend into everyday life so others around them can’t see the scale of their fortune.
However, this group also wants exclusivity, but they want only their friends to know how successful they have been, in a very subtle way. They will wear unbranded clothes by the likes of Derek Rose, exuding quality and luxury in a comfortable and understated way. Those in their group will be able to tell the brands they are wearing as they also shop in the same exclusive retailers.
They travel by private jet – for both ease of travel and security, and they carefully choose their holiday locations to ensure they have the right anonymity as well as security for their family.
Billionaires
As the name suggests, this is our top category, with a disposable income of over $1 billion – yes, nine zeros!
Much like UHNWI, this group wants anonymity. They need security, they are international in their residences, often using them for tax purposes, as do the HNW and UHNW groups.
This group, however, has bigger toys: a superyacht, for example. Even an UHNWI would struggle to buy a $150 million yacht with a running cost of $20m/year.
The big difference in this sector is impact. This group has significant influence both economically and politically, with a level of wealth that can make a significant impact on programmes of work. For example, eradicating diseases, building new clean nuclear reactors for energy, or building space rockets for Mars.
These aren’t small endeavours and are usually reserved for nation states to invest in. But billionaires can make decisions, unlike nation states, as they don’t need public approval, to be elected, or have accountability for the project’s success. This means they have influence and can make a significant impact on politics.
While this group is small, it holds significant wealth – the top 10 billionaires hold 10% of all billionaire wealth.
Summarised approach to marketing to luxury audiences
While it’s crucial to understand the nuances of the various wealth segments, there are similarities that connect the way we approach digital marketing for luxury brands.
Creative
Creative must be polished. It needs to reflect the aspirations of the luxury consumer and speak their language. So while the tone of voice might change as we move through the wealth brackets, all luxury consumers look for brands that reflect their exacting standards from a visual perspective.
Messaging
These groups aren’t looking for discounts, but rather quality, pedigree, exclusivity, and brand stories to help build deeper connections. They don’t want to buy a product; they want to invest in a lifestyle.
Targeting
From our experience in the luxury sector, and our own research, we know where these audiences reside, their key life moments, and their needs. We know they are often time poor and that staff or the family office might be influential in their purchasing decisions. This gives us a very focused approach to how we can effectively target these audiences.
‘CTA’s and your CRM Programme’
For all our digital activity we want to build a value exchange. So even if we are pushing a campaign or branding that’s not designed to drive sales, we can think about how we want to expand our CRM programme. Therefore, each investment in activity should have a digital heart to it where we can collect information on our audience in order to develop more tailored programmes and start to build a lifetime connection with them.
If you would like to find out more about our digital approach and how we can meet the needs of your luxury brand then please do get in touch.