Professional Documents
Culture Documents
The top 1% of US households own about 34% of privately held wealth, while the
top 0.01% (that is one-tenth of one percent) holds the most amazing
concentration of wealth, beginning with annual incomes over $4 million. This
document does not address the subject introduced by the New York Times ,
which perceived a class war between the rich and the super-rich. It does analyze
the lifestyles, behaviors and preferences that are common to both wealth groups.
Most importantly, it synthesizes the available research and shares current
marketing strategies (from other industries) that are successfully reaching this
elite affluent.
Capturing the attention and loyalty of the wealthy has never been as competitive
as it is today. If history is any indicator, this elusive, but growing consumer group
will continue to evolve and redefine the concept of “luxury”. To successfully
influence this elite consumer, it is essential to consider emerging marketing
strategies, as well as the most successful initiatives.
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Not for reproduction or duplication without written permission from DWA Communications, Inc.
Advertising
Research Synthesis
The medium and the message continue to merge, as advertisers look to new and
adventurous ways to capture consumer attention. Advertising gurus tell us to
rethink what constitutes media and to view everything as media.
Marketers are groping with the reality that advertising needs to stop being an
interruption of people’s lives; the best are becoming welcomed as interesting
parts of our day. Brands are using everything from eggs to cavemen to deliver
their entertaining messages. Print advertising, which fuels luxury magazines, is
falling into two categories, each on either end of polar extremes. At one extreme
are advertorials with intriguing stories and at the other extreme are ultra confident
brand messages that don’t even hint at how or where to find the product; their
message: those in the know…know.
Marketing Strategies
#1 Be Confident. Eliminate your detailed contact information and fussy
messages; replace them with a discreet direct phone number or web-site
address to accompany your strong visual message.
#2 Be unexpected. Cut through the clutter with a story that resonates with your
target consumer, and then deliver it in ways that only they will appreciate.
Of course, that means you need to understand their lifestyles, values and
desired experiences…and favorite “spots”.
Not for reproduction or duplication without written permission from DWA Communications, Inc.
Brand Portfolios
Research Synthesis
Luxury brands are ubiquitous, and many have found ways to cater to the masses
with brand extensions and/or entry-level branded products. The backlash to this
type of democratization of luxury (or the commoditization of luxury) has been a
move away from several brands by the most discriminating consumers.
The elite affluent have always sought products and services that are unique, rare
and timeless. Deciding what products to develop or offer is now a delicate dance
between understanding your client and offering something that they could never
articulate before they saw it. The products and fashions of Italy’s most admired
couture designer's reach far beyond market/consumer research (i.e. many
actually snub their noses at data), and choose to focus on designs that surprise
and seduce. The stakes are higher than ever, and retailers wishing to demand
attention through the clutter must be consistently ahead of the design curve.
Some of the most interesting brand portfolios have been built around lifestyles,
ranging from sports enthusiasts to adventurers to world travelers. Fashion
retailers that serve the elite affluent know how to correctly edit the
marketplace…meaning they have a well thought out point-of-view or rationale for
their product and brand selections.
Marketing Strategies
#1 Edit with a point-of-view. Consider putting your inventory together in ways
that mirror your client’s interests, rather than jewelry categories. Learn or
share thinking from financial portfolios (mature, young, fast growing, etc.).
More importantly, be able to articulate why/how you assembled your brand
portfolio, as you did. Remember, the story counts!
#2 Be the antithesis of mass luxury. To serve the elite, you must have the rare,
unique or pedigreed. Have what no one else possesses and cultivate the
aura of being on the cutting edge.
#3 Create the next big thing. Use your insight into your elite clientele to move
the market in new ways. Invest in product development and bring fresh
design into our industry…to capture a greater share of the luxury wallet.
Not for reproduction or duplication without written permission from DWA Communications, Inc.
Curated Consumption
Research Synthesis
Analogous to fine wine and art, greatness is rarely perceived without enlightened
advocates who can dramatically interpret and articulate the mastery and
relevancy of the created work. Your brand ambassadors have an opportunity for
greater influence, once they redefine the service they provide. America’s wealthy
are famously intolerant of inept sales assistance, while richly rewarding
exceptional guidance from highly trained professionals with exemplary
demeanor; but Curators reign with the elite.
Marketing Strategies
#1 Jewels PLUS. Being the ultimate, trusted curator of jewels is a given…look to
be their curator for more. Intelligent, poised curators are in high demand and
greatly respected.
#3 Get in the habit. According to Malcolm Gladwell in Blink, you can learn more
in a short visit to a client’s personal space than through any other interaction.
You can’t curate for them if you don’t understand their personal taste and
motivations … so get in the habit of visiting their offices/homes.
Not for reproduction or duplication without written permission from DWA Communications, Inc.
CRM Meets CEM
Research Synthesis
Some marketers insist that CRM (Customer Relationship Management) is very
different than CEM (Customer Experience Management), while others hold that
CEM is just CRM dressed up to sound new. A fair explanation is that CEM is the
natural evolution of CRM.
The simplest way to define CRM is as database management system to help you
segment your customer base and determine how to best communicate with
each segment. It replaced the informal and still popular 80/20 informal business
approach with a more sophisticated and profitable system. Three steps are
essential in building a successful CRM system: collecting initial data, updating
and maintaining the client information, and mining the data to design better
outreach communications.
There are a myriad of software programs available and some are better than
many. The key learning is to understand that every contact you have with a client
should lead to a more intimate knowledge of the individual…and you should act
differently based on that knowledge.
Marketing Strategies
#1 Document it somewhere. Be relentless and ensure that every phone call,
every in-store moment, every social interaction and every spotting in the
society section is documented somewhere. Then, help your staff learn
how to go beyond who, what, when and why data that never changes
…and learn how to capture the softer, insider client information that lives
in moments.
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Experiential Marketing
Research Synthesis
Event marketing has evolved into experiential marketing…and it is more than
jargon, word play or spin. Single themed events and parties no longer achieve
marketers’ objectives with elite affluents. Couture Jewelers lead our industry in
the number and quality events offered to luxury consumers…often partnering
with other prestigious brands. BUT it is the worlds of fashion, spirits, and travel
that are leading the way in experiential marketing. The “new events” moved away
from “themes” … to stories that hold the affluents attention for a longer and more
interesting time.
Marketing Strategies
#1 Chapter & Verse. Breathe life into you next event. Your invitation will trigger
the interest, but you now need to plan the first chapter of your event to further
tease and entice. Chapter two should unveil the story with elements of
surprise; but it is the final chapter that should crescendo and achieve your
original objective.
#2 Think Series. Plan your event schedule for your next season with an
interesting and enticing way to link them together. You need a story …that
creatively communicates your brand essence and also intrigues your affluent
clients.
Not for reproduction or duplication without written permission from DWA Communications, Inc.
In-Store Experience
Research Synthesis
Attention to detail is often the point of differentiation between the excellent and
the ultimate. An experiment by the New York Times found that “without fail, the
ritzier the establishment is trying to be, the colder the air conditioning is kept.”
The notion is that status is super cool. According to the Home Comfort Institute,
when clients enter your premises, everything counts; air temperature, humidity
level, heat radiation effects, air quality, air circulation or movement, sound levels,
ambient scents, numerous aspects of lighting and the look of staff all affect the
customer’s perceptions.
The Elite continue to purchase products and services that provide extreme
experiences and one-time-thrills (e.g.http://www.dinnerinthesky.com), but they
also seek ultimate experiences that they can experience more easily (e.g. dinner
served in a greenhouse situated in a large city: De Kas). Story-selling/providing is
the key. In other words, the new ultimate experiences have a little less to do with
the environment and a lot more to do with how the environment is used to create
the experience. The client must perceive the experience as a story worth retelling
…to their friends who are also elite affluents. The savviest of brand
ambassadors are also creating amazing stories (re: products) that create a
personal link to their clients
Marketing Strategies
#1 Begin with the end in mind. In order to give your customers something to talk
about, at least once a week, have your team suggest an answer to questions
like: What will our clients want to tell friends about this week’s experience with
you…or the store? How will it be different than last week?
#3 Sell Stories. The next item that you design should have the story documented
before the crafting begins; also press your designers for stories.
#4 Test your Perceptions. Hire a consultant or ask someone (i.e. NOT a close
friend) to evaluate your atmospherics.
Not for reproduction or duplication without written permission from DWA Communications, Inc.
Internet/Online Oxygen
Research Synthesis
The Internet has become one of the top media choices for luxury marketers,
rivaling public relations. Wealthy consumers spend on average more than 10
hours a week online. Fully 25% of affluents spend more than 20 hours,
according to Agency Sacks. This means that the Internet is an essential tool for
growth and development, regardless of your brand positioning.
Less than 15 years ago the first web sites appeared. Now, over one billion
consumers have online access and most consider access a necessity … like
oxygen. Now that access is available via cell phone and Wi-Fi, and connectivity
in the U.S. has reached over 68% of the population.
The future is Web 2.0 (which allows people to collaborate and share information),
interactive connections, social networking sites, and virtual worlds like “Second
Life.” Marketers have already begun putting their product and brand in front of
consumers in a variety of formats. Online marketing is essential, online sales are
booming. While many jewelers continue to use their web sites for consumer
information, the percentage of retail sales online is growing exponentially.
According to the Wall Street Journal, Nordstrom has found average-sale
increases largely attributable to their strong growth in Internet sales.
Marketing Strategies
#1 Distribute VIP passwords. Provide limited access areas for VIP messaging
and insider information or services they can’t get elsewhere—a cultural
calendar, exclusive downloads, or personalized recommendations in areas
beyond jewelry. You need something worthwhile to bookmark as a “Favorite”.
#2 Consider your website another store. This means that means that you need
to dedicate management attention and resources similar to what you would
allocate to a bricks-and-mortar location; luxury e-commerce is booming.
#3 “Luxify” your online presence. Your brand image has to be maintained, not
an easy feat, as few web designers possess the creative design sensibilities
required. Invest resources to have your site professionally evaluated …
or re-designed.
#4 Put something on You Tube. Your clients’ personal assistants, their AMEX
concierges, et al … are all watching and looking.
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Transparency
"Old economy fog is clearing: no longer can incompetence, below-par performance,
ignored global standards, anti-social & anti-eco behavior, or opaque pricing be obscured.
In its place has come a transparent, fully informed marketplace, where producers have
no excuse left to under perform.” -2007 Trend Report
Research Synthesis
The Internet is fueling a groundswell of consumer knowledge/information, and
now there is increasing focus on consumer feedback. Many high-net-worth
individuals don’t research or pay for things directly, they depend on an assistant,
a business manager, or perhaps a personal concierge. The Internet is the major
tool these people use to ferret out the information their bosses desire.
Shopping bots that seek out the lowest prices on the Internet were just the
beginning. Now, consumers can find out how your customers feel about you,
instantly. The next trend is pundits and gurus who declare and maintain listings
of “the best of the best.” There will be objective (or not so objective) discussion
of your position of excellence, on the web for whoever chooses to look. The web
is fostering insider knowledge for everyone; there is no longer anywhere to hide.
Marketing Strategies
#1 Disclose, disclose, disclose. Don’t be afraid to tell it like it is. Realize that
consumers are, or can easily be, aware of issues related to your products and
offerings. Have confidence that your consumers want and expect full
disclosure and do it effectively.
#2 Use third-party endorsements. Get yourself aligned with the gurus who can
add credibility to your offering: gem labs, websites, and known connoisseurs.
#3 Watch your “social bottom line” Be sure your brand is aligned with values
that include social, environmental and global concerns. Also, remember that
these consumers have favored charities, as should you.
Not for reproduction or duplication without written permission from DWA Communications, Inc.
Uber Premium
Research Synthesis
The term “Uber Premium” was coined by Tyler Brule, a columnist for the
Financial Times and creator of the ultra-style conscious magazine Wallpaper.
The term refers to ultra-exclusive goods, services and experiences available to
those at the highest echelons of wealth. These products and experiences are
recognizable by price, timing or access; and they dramatically separate elite
affluent consumers from the mainstream luxury market …that attracts the mass.
In 2002, the first “Millionaire Fair” was held in Amsterdam and while it has
reportedly retained its position as the best and/or most attractive to the elite,
there are a growing number of Millionaire Shows. Yet, there is no need to wait
for one of those annual events; Moscow has a store that only offers items with
$1million plus price tags.
Remember, it is not only price that defines Uber-Premium. The latest mantra is
“luxury is status is access” which takes opportunity and privilege to new heights.
Whether customizing Nike sneakers at their invitation only design lab or paying
$40K for membership in Casa Casuarina, Versace’s former South Beach
mansion…restricted access is the most popular definer of the Uber-Premium.
Marketing Strategies
#1 Learn from prestigious wineries or galleries. Sell Futures. Consider your
client’s heightened interest and anticipation, when they are awaiting one of
your custom designed pieces. If you can systemize that experience and sell
futures connected to an exclusive invitation…you can expand your uber-
premium business.
#3 Shuffle your VIP cards. Segregate your next exclusive event into 2 or 3
…and ensure that each is very different, but also worthy of buzz for different
reasons. You know you did it right when you hear a rumor that a VIP was
curious why they were invited to “A” instead of “B”.
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Woman Rule
Research Synthesis
Women represent 50% of the population and 80% of consumer purchasing
decisions. They also now own nearly 30% of all businesses, control more than
$7 trillion dollars… and by 2010, women will control more than $13 trillion in
private wealth. Women’s growing income has led many marketers to market
directly to them, even in non-traditional categories like cars, boats, and home
renovation. Banks and financial-service companies, including Citibank, Merrill
Lynch, and Charles Schwab have created entire departments that market
investment products exclusively to women. Indeed, it would be a mistake to
ignore this fast-growing segment of wealthy individuals.
Still, numerous industry studies confirm that women do not feel comfortable
shopping in jewelry stores; and younger women (possible elites of the future) do
not feel welcome. Savvy marketers in various fields have surveyed women and
found that women and men react differently to the same environments. This has
led some retailers and auto dealerships to completely revamp their physical and
emotional spaces, creating areas and experiences that are finely tuned to female
sensibilities. While it may not be possible to create totally different environments
for your clients, the research strongly suggests that “one size fits all” sales and
marketing is a mistake.
Elite affluent women don’t need to wait for someone to give them a gift; they are
quite capable of purchasing what they wish. This can be daunting, as these
same women often adore receiving jewelry gifts. Understanding her seeming
contradictions is what makes for successful sales.
Marketing Strategies
#1 Where is the hand lotion? If jewelers wanted to cater to women, there would
be full-length mirrors in stores. Women purchase accessories to compliment a
total look. Also, where are the newest high-end or exclusive hand lotions?
Boomer women (the elite) always want to know about the lotions and cream
choices of celebrities …and they certainly would appreciate a sample before
trying-on or considering jewelry.
#2 Take her to lunch. Elite women expect to be pampered, but not in the same
ways as men…or the masses. Have a women’s advisory board; meet over a
gourmet luncheon. Women are motivated by connections and relationships…
and shared discovery. Your team needs to explore new ways of fostering
these all-important connections.
Not for reproduction or duplication without written permission from DWA Communications, Inc.
ACKNOWLEDGEMENT
Agency Sacks, Harrison Group, Vogue, Elite Traveler with Prince & Associates
are partners in this initiative and have generously included their latest research
reports in this portfolio.
Not for reproduction or duplication without written permission from DWA Communications, Inc.