Luxury brands aren't the only segment targeting the "1 percent," the uber-rich slice of the population that has been taking a lot of heat from the so-called 99 percenters. It is these wealthiest consumers, occupying rarefied air, who vote with their checkbooks, so their preferences are closely considered and carry a lot of clout.
So what is the high net worth consumer looking for? First and foremost, superior quality, according to "Luxury Branding and Marketing: A Global Comparison of Wealthy Consumers in Top Markets," a study just released by Luxury Institute. The survey analyzed wealthy consumers with a minimum annual income of $150,000 or the local currency equivalent in China, France, Germany, Italy, Japan, the United States, and the United Kingdom.
A broad majority (73 percent) of wealthy consumers think superior quality is the most important attribute that defines a luxury brand, followed by craftsmanship (65 percent) and design (54 percent). But increasingly, customer service is becoming a key consideration (47 percent). Customer service is even more important to Chinese consumers, who say that service has improved (63 percent).
On the negative side, however, twice as many wealth U.S. shoppers as last year (34 percent vs. 17 percent) believe that customer service and product quality have deteriorated in recent years. German, Japanese and U.K. consumers think craftsmanship has declined.
Luxury brands that rise to the top are well aware of the discriminating taste and customer service demands of their target audience. Coach, for example, is renowned for providing a positive experience and remaining relevant to the contemporary consumer, using such techniques as a website that allows customers to create their own animations. According to the Luxury Institute, Coach has achieved an unprecedented position with affluent women in the United States with its average 73 percent brand familiarity — the highest by far of any brand in the category.
Similarly, Ralph Lauren has been ahead of the curve when it comes to engaging wealthy consumers. Speaking at the annual NRF National Retail Federation conference this week, David Lauren, Ralph Lauren's EVP of advertising, commented that the overarching goal is to blend "merchandising and entertainment" to keep the iconic brand relevant. "Most people are used to seeing Ralph Lauren as a classic brand," David Lauren said. "We wanted to change that perception and get people comfortable with the idea that luxury items are also available online."
In fact, Ralph Lauren was one of the first major luxury brands to launch an e-commerce website eleven years ago. Today, the company uses everything from 3-D webpage takeovers and iPhone apps to a unique program that engages customers in designing, buying and sharing rugby shirts by beaming them to a store window screen. It's all designed to "unite the retail experience with the Web experience," said David Lauren. "We try to make the Internet feel more personal. We never want a flat screen to scare you away from feeling connected to a brand that's personal to you."
Clearly, it is those luxury brands that can successfully combine their long-standing reputation for quality and service with modern modes of interactive marketing that will make the greatest gains with the 1 percenters.
[Image via Luxury Institute]