Luxury brands may need to rethink the way in which they market to affluent consumers, because affluent consumers are certainly rethinking the way in which they purchase products. According to Unity Marketing’s Luxury Consumption Index, consumer confidence has dropped sharply in 2014.
As a matter of fact, it is at its lowest level since late 2008. Instead of pursuing material possessions, it appears that a large portion of the top 20% of income earners are putting most of their financial gains toward saving and investing. While this has often been the mantra of financially successful people, Unity Marketing’s survey projects that the frequency that saving is chosen over spending will increase as we move deeper into the current year.
So what does this mean for marketers? It means they will have to adjust if they have hopes of attracting a steady stream of affluent consumers to their stores (or sites).
Shopping Is Less Recreational
There was a time when shoppers would aimlessly stroll around a store waiting to see if anything caught their fancy. While consumers still enjoy a Friday night at the mall (although even that is waning), many now enter retail locations or visit brand websites with a specific purpose in mind – the wealthy are no exception to this trend. This makes separate points of contact of the utmost importance to a brand. Because the chance of a consumer noticing your brand on a store shelf is less likely here in 2014, every interaction that they have with your brand prior to making the decision to purchase becomes more imperative. As a brand, make sure you are creating a dialogue with your target demographic well in advance.
Good Presentation, Not Material Value, Equals Good Reputation
While it’s not a tangible product, a significant number of the wealthy population employs the services of a financial advisor. According to the Oechsli Institute, clients often select advisors based on word of mouth and firm reputation, rarely considering materialistic factors such as the quality of the presentation materials or type of car the advisor drives. Brands should operate under these same principles. Providing attentive and helpful customer service, plus a reliable product, will often hold significant weight in the mind of a consumer.
In addition, keeping tabs on online conversation pertaining to your brand is a good way to gauge what people are saying about you and if you need to improve anything.
Experience Is Still Important
Despite uneasy economic times, one thing that affluent consumers have not skimped on is experiences. Fine dining sales and luxury travel were both up in the first quarter of 2014. For luxury brands looking to gain an edge, creating a memorable brand experience is a good bet. “Experience” can be viewed in a very liberal sense, as well. Whether it is a contest, charity event, or making your store a destination (as luxury brands such as Apple and Tiffany’s have done), making your brand worth the trip for wealthy consumers justifies the time and effort.
While the psyche of the affluent consumer may be shifting a bit, there is no reason why luxury brands can’t adapt to the changing times. By observing trends and making simple, yet meaningful tweaks to a marketing strategy, brands can continue to stay top of mind.