Personalised products by Louis Vuitton
Elizabeth Canon of Fashion’s Collective explains how big data can help luxury brands craft intelligent experiences to appeal to UHNW individuals
During the past year, the world’s population of Ultra High New Worth Individuals (UHNWI) has reached an all-time high of nearly 200,000 people with a total combined wealth close to $28 trillion USD. Contrary to some of the latest media headlines, this growth was largely due to North America and Europe.
In fact, the emerging markets are reporting an economic slowdown that has contributed to a decline in UHNWI in China and Brazil. However, it is predicted that Asia will generate more UHNWI and wealth compared to both the US and Europe over the next 5 years (mainly due to population growth).
With this growth comes the need for luxury brands to learn more about this segment in real, actionable ways. Yet, historically, this segment of UHNWI has been tough to find and communicate with. The solution for the future lies not in guessing when, where and how these individuals behave and interact, but instead in leveraging in big data to identify, relate and capture them as customers.
“ The future lies in leveraging big data to identify, relate & capture UHNWI’s as customers ”
One of the most informational talks at Luxury Society and Bloomberg’s Keynote event in NYC featured David Friedman, President of Wealth-X, a firm that provides wealth intelligence and research to luxury brands.
In this segment, David challenged the audience by stating that the wrong question to ask is “How do I get to UHNWI?”. First and foremost, we need to be asking, “Who are these UHNWI?”; and it’s not just about demographics, income, net worth, or amount spent, it’s about understanding these customers as people.
Whereas Facebook may own the social graph, and LinkedIn may own the professional graph, understanding UHNWI is more and more about creating a philanthropic and affinity graph.
For those that can easily afford the material things they desire, brands must focus on creating experiences in order to be compelling. But only by understanding what people enjoy and value on a deeper level can brands create the right meaningful, personal experiences for UHNWI individuals.
“ It’s not just about demographics, income, net worth, or spend, it’s about understanding individuals ”
For brands and businesses, the first tactical step in targeting this segment is identifying the individuals in their existing database that are UHNWI.
This is not obvious as one might expect as UHNWI do not always or automatically have a higher than average order value for each brand they have ever shopped with. Instead, identifying these people is done by taking the existing hard data on UHNWI and overlaying it to the existing internal brand database.
For example, Wealth-X has individually identified 199,235 people around the world as ultra high net worth. Many of these people may already exist in a brand’s internal database without the brand even being aware.
The next step is to determine the affinity and philanthropic interests of these individuals, which is done through data tagging and generates a concrete assessment of what this customer is interested in, which can be leveraged to create bespoke marketing campaigns.
“ Step 1: identify individuals in a brand’s existing customer database that are UHNWI ”
Is your customer interested in contemporary art? Skiing? Indie music? If you know, you can craft intelligent and customized experiences that will appeal to their personal interests.
One example given was a luxury jet company, who sponsored an event with approximately 500 attendees. The first question asked was “How many of these attendees are UHNWI?” Taking existing in-house hard data from Wealth-X and comparing it to the attendee list, the brand identified 50 UHNWI.
Next came the affinity assessment, which lead the jet company to craft an initiative that was tailored to the specific interests of this segment. Based on the interests and affinity of these 50 people, the jet company decided to create an intimate event where guests could meet the team responsible for capturing and killing Osama Bin Laden.
The result? From the 50 UHNWI invited, 40 attended and 8 flight demos were requested post-event, a figure that typically represents the amount of flight demos in an 8-9 month time period for the jet company.
In the past, the legacy of many luxury brands has directed marketing and communications, yet the impact of big data is that luxury brands can now place their UHNW customer at the centre not just of the sales experience, but also of the entire brand experience.
To further investigate wealth and affluence on Luxury Society, we invite your to explore the related features as follows: