While most Americans will be celebrating modestly this holiday season, affluent customers, specifically the top 10% of earners, are expected to spend over 20% more than last year. According to a recent study by Harrison Group and American Express, 39% of the top 1% are planning to spend big on gifts this year, although perhaps not in the way you’d expect.
Yes, couples will be buying each other gifts to remember, but NRF research says that, historically, affluent couples don’t always buy what their partner wants. So this year, many affluent women (and some men) are planning to buy extravagant gifts for themselves. The women plan to buy jewelry, fashion and accessories – high quality, lasting gifts that they can enjoy for years. Men are treating themselves to less enduring indulgences, like gourmet foods, booze and gift cards.
So how can luxury retailers best position themselves to take advantage of this trend among the ultra-wealthy? How can they best reach shoppers who plan to treat themselves this season?
It may take a bit of planning. Recent Nielsen research regarding “Mass Affluents” – those with income producing assets between $250,000 and $1 million - shows that these shoppers can be more of a challenge to reach. According to Nielsen, this group lives very differently from the average American, with a preference for high culture that brings to mind Lovey and Thurston Howell III. They belong to country clubs, enjoy sailing, attend operas and listen to classical music – yet they don’t consider themselves wealthy. Mass Affluents tend to be Boomers, aged 55 and up, but contrary to conclusions one may draw based on their age, they are web and mobile savvy. It’s likely that many of the affluents buying themselves triple-malt scotch and Chanel bags this December will fall into this niche.
To reach this wealthy group (who don’t consider themselves wealthy), it’s helpful to know that they consume media voraciously, both in print and online. The smartest way to reach them is through the publications they love, online and offline. While Nielsen does recognize that they are slightly less likely than the average American to access the internet via a mobile device, their adoption of smartphones and tablets is high, so optimize for mobile, as well. (Many other trends point to higher mobile numbers across markets this year: 12% of online visits to a retailer’s site came from a mobile device last season, and that was a 5% increase over 2010. Christmas Day 2012 saw an increase in mobile shopping of 173% over the previous year, according to Google Post Holiday 2011 Takeaways.
Mass affluents are massive fans of high-quality reads like Veranda, Condé Nast Travel and Wine Spectator. Reach them through these and other similar sites and publications. Appeal to them with beautiful narrative ads that speak to their aspirations and match the context of their favorite reads. (Since this group doesn’t recognize itself as wealthy, aspirational messaging will serve well here.)
It’s no secret that I’m a fan of native advertising, which leverages both the content of the ad and the context of the publication and page to create elegant experiences for the consumer. That’s a combination that will pay off here. A gorgeous video ad featuring an heirloom watch that blends seamlessly into the page on Condé Nast Travel will appeal to an in-market shopper, as will an ad for Glenfiddich on a page in Golf Digest. These brand experiences, when done well and timed right, will resonate and draw in the shopper.
For the Mass Affluent who feels he or she deserves a gift this year, the ad has to resonate. Whether they recognize their wealth or not, they do believe they’ve earned something extra-special for themselves. Show them that you believe it, too. Give them a brand experience that makes them feel like they’re worth it.