With more billionaires than ever across the globe, how do luxury brands capture and maintain the interest of ultra-high-net-worth individuals (UHNWIs)?
The Wealth Report disclosed there are more than 520,000 UHNWIs in the world today. This number is expected to rise by roughly 27% in the next five years to 663,000. Additionally, the demographic make-up of UHNWI audiences is getting more diverse, with an increase in the proportion of gen Z, millennials and women. Indeed, research conducted by Relevance shows there are now around 29,300 UHNW women in the world – or roughly 10% of UHNWI – a 52% growth from 2016.
Wealth-X estimates UHNWIs spend $300bn on luxury goods, a highly lucrative market for those that can successfully engage this audience. Since UHNWIs can afford virtually anything, luxury brands need a truly tantalizing strategy to capture their interest. It is not enough to be a luxury brand anymore. Rather, a highly-bespoke brand strategy, both online and offline, needs to be crafted in accordance with this discerning audience. Plus, luxury brands shouldn’t just target UHNWIs but keep in mind the influencers that guide purchasing decisions, such UHNWIs’ staff and trusted confidants such as stylists and personal assistants.
For over a decade, Relevance has been working within the luxury sector, creating digital marketing campaigns based on data-led industry insights designed to capture the hearts and minds of UHNWIs. Here are five ways a luxury brand can appeal to UHNWIs:
1. Custom products
UHNWIs don’t want off-the-shelf products. They seek exclusivity, with products tailored to their exact liking. Consequently, luxury brands need to take an ‘anything is possible’ approach.
Take for example Rolls-Royce’s ultra-exclusive bespoke Boat Tail, a four-seat GT cabriolet with removable canopy roof that spearheads the British marque’s Coachbuilding service. Only three models of this hand-built masterpiece have been produced, each custom-designed according to the customer’s needs. So intimate is the process that Alex Innes, Rolls-Royce’s head of Coachbuild Design, describes the creation of these ultra-exclusive cars as a “unique collaboration” between the car builder and their client. To capture UHNWIs’ interest, the company’s unique Coachbuilding service is available to just a select few.
Within the fashion sphere, Fendi is just one of many luxury brands that offer customized and one-of-a-kind products. Their Colibri customization service enables customers to select the features of their flagship shoes, such as heels or ankle straps.
Yachting industry leaders have understood there is no greater status symbol than a custom-designed superyacht. The likes of Feadship, Lürssen and Nobisrkug, renowned for building sailing yacht A, can spin customers’ most outlandish ideas into stunning vessels.
2. Unique personalized experiences
UHNWIs do not just seek custom products, they crave unique immersive experiences from start to finish. The luxury market evolved alongside the rise of a service economy to cater to a new generation of UHNWIs that prefers distinctive brand experiences over material consumerism. Unique brand experiences span from in-store personal services, such as private shopping events or immersive online experiences, to carefully curated special events that offer UHNWIs an opportunity to network with like-minded individuals.
For example, Bentley fosters an ongoing connection with the brand through their annual Monterey Car Week. This event provides a ‘full dance card’ of programming, with a few select individuals gaining the opportunity to view exclusive models.
LVMH created a buzz when it launched its Journées Particulières (‘Special Days’) in 2011. The event opened the doors to 56 Maisons across the world to a mass audience. The events are designed to capture the interest of potential new UHNWI customers and celebrate the group’s revered artisanal savoir-faire of their iconic houses across the globe.
3. Perfectly-aligned brand ethos, values and purpose
Luxury brands are placing increasing value on their purpose to appeal to UHNWIs. This is especially important to attract a younger, more socially-aware audience and the growing number of UHNW women, more likely to be philanthropy-focused. Many luxury brands today are keen to highlight sustainability, transparency, inclusivity and humanitarian efforts.
PrivateFly pledged to reduce the entire climate impact of their private jets, rather than just their carbon impact, to give clients the opportunity to support long-term sustainability efforts.
Fashion label Olivela is a great example of a humanitarian luxury brand. Their brand ethos is centered around philanthropy and giving back, with 20% of proceeds going to charitable causes worldwide. Clients can personally choose from a list of partners to support, spanning health services, climate action and women’s empowerment.
Gucci’s decisions to embrace genderless fashion and champion a sustainable supply chain has enabled the luxury brand to tap into a younger, socially-aware audience. Gucci’s Off The Grid collection, launched in 2020, was designed with organic, recycled and sustainably-sourced materials and intended to appeal to shoppers who are mindful of their environmental impact.
Finally, LVMH-owned French beauty brand Guerlain partnered with Unesco to create the Women for Bees initiative to protect bees and promote female-led biodiversity programs. This the first initiative of the broader collaboration between LVMH and Unesco.
4. A strong luxury brand culture and story
It is no secret that historic brands with a strong culture, legacy and story greatly appeal to UHNWIs. When it comes to luxury brand marketing, products and experiences need to be integrated as part of a broader story. Indeed, premium brands’ stories must sit at the very heart of the label and drive every aspect of the business. To engage with UHNWIs, a brand’s story must be truthful and place a brand’s craftsmanship, heritage, values and ethos as the main plot.
Take Burberry, which uses social media platforms to expertly tell the history of the brand through impactful visuals and longer-layout videos such as short films that retrace Burberry’s unique legacy and British heritage.
LVMH’s ‘Behind the Scenes’ newsletter revolves around three central themes of storytelling: ‘Portraits of People’, ‘Iconic Creations’ and ‘Exceptional Places’. These motifs offer luxury shoppers a deep-dive into the places, people and things behind the success of the world’s largest luxury goods conglomerate.
However, the emphasis on heritage does not mean that there is no room for contemporary labels to capture the hearts of UHNWIs through a strong brand story. Luxury fashion brand Brunello Cucinelli dedicates an entire website to eloquently stating its brand story, values and ethos. This includes the founder’s personal take on consumerism, visions for spiritual attitudes towards nature and humanism. Not only is it great storytelling, but it perfectly aligns with younger UHNWIs’ desire for brands with a social purpose.
5. Flawless digital experience
Almost all UHNWIs begin their search for luxury goods online, and many now complete entire transactions without ever setting foot in a store. The outbreak of Covid-19 has enhanced this trend, pushing luxury brands to rethink their digital marketing strategies and create new immersive bespoke omnichannel experiences. At Relevance, we have identified 26 touchpoints that UHNWIs experience when purchasing a yacht. Only four of these touchpoints are offline, demonstrating the power of the digital journey.
Burberry has emerged as a digital pioneer that quickly adapted to the Covid-19 pandemic, boasting a sophisticated online presence that taps into the desires and shopping habits of UHNWIs. Burberry’s website offers virtual shopping experiences, online conversations with sales associates, collection tours, virtual events and exclusive digital content on the Burberry World webpage. The luxury brand was quick to embrace next-generation technologies such as augmented reality (AR) with a Google iOS app that enabled customers to view products in 3D.
Similarly, Gucci harnessed the power of AR technology with their Shoppable AR app available on Snapchat. This feature offered a virtual filter that enabled users to try on trainers, and a ‘shop now’ button to expedite purchases.
Podcasts are another tool that digital-savvy luxury brands have adopted. Podcasts allow brands to communicate directly with their audience through hyper-tailored content. Brands can establish their narrative and tell longer, more intimate stories, allowing audiences to connect on a personal level.
Chanel was one of the first luxury brands to adopt podcasts in 2017, with a host of luxury brands quickly following suit. Jo Malone’s new six-part podcast ‘A Conservation in Time’ connects the luxury fragrance brand with its audience through honest conversations surrounding mental health, wellbeing, poetry and identity.
To execute successful digital marketing, brands need to understand the digital platforms UHNWIs are active on. At Relevance, we use in-depth audience insights to identify a brand’s target audience and their digital habits. Every campaign needs to be strategically thought out and carefully tailored to each individual channel. Those on Instagram, for example, will require a different content approach to those posted on Medium.
There is no question that the way in which UHNWIs are engaging with luxury brands is changing. Brands that can continue to pivot and tailor their brand and marketing campaigns to reflect the needs, values and buying habits of UHNWIs will undoubtedly thrive in the ever-growing luxury arena. Contact us to discuss how Relevance can make your luxury brand irresistible to UHNWIs through hyper-targeted digital marketing strategies.