In 2017, Wealth-X reported that one out of every 56 people in Monaco has assets totaling at least $30 million.
Now we learn that, according to the Wealth Report 2019, the global Ultra High Net Worth population will grow by 22% over the next five years, meaning some 43,000 individuals will be worth more than $30 million by 2023.
This growth is being driven by a new generation of UHNWIs, primarily Generation Z and Millennials, whose digital narratives are dramatically transforming the luxury market, leaving big-name labels scrambling to remain relevant.
Traditional digital tools are no longer enough to reach the world’s wealthiest consumers and the winners over the next decade will be luxury brands that are sufficiently nimble enough to adapt in order to keep up with the latest digital trends and the changing ways in which UHNWIs purchase luxury goods and experiences.
There are essentially five ways the world’s most covetable brands are meeting the challenge.
First, as those with deep, deep pockets prefer the comfort of online shopping from the touch of their phone, luxury brands are looking at ways to create the ultimate virtual shopping experience, from digitally trying on apparel and makeup to enjoying a “walk” around a luxury villa on the other side of the world.
To engage UHNWI customers, brands like Porsche are using Go Instore for immersive live video commerce while Sephora, Gucci, and St Tropez House utilize AR/VR technology, which is set to revolutionize luxury e-commerce, making transactions easier and more effortless than ever before even for the highest ticket items.
A second trick for luxury labels is to build meaningful connections with customers. To create an exclusive sense of belonging, captivating social media feeds featuring live videos on Instagram and user-generated content are used. For example, @hermes on Instagram posts make clever use of sound, imagery, and video enlightening the senses of its 10 million follower
Thirdly, the ever-popular video, which is portable, immersive, and measurable, encourages users to go on a journey ending with their digital purchase. From behind-the-scenes sneak peeks to dynamic interviews with industry leaders, a well-executed video can offer an incredible return on investment especially when promoted through YouTube and IGTV.
Podcasts took the world by storm in the early 90s and they have enjoyed a recent surge in popularity, growing by 14% in 2018. The fact that all people need to do is listen makes podcasts highly portable, enabling consumers to engage with a brand wherever and whenever. Gucci, Chanel, and high-end retailers like Saks are embracing this fourth digital trend.
Lastly, omnichannel marketing brings all these modern marketing touch points together offering consumers a completely seamless experience. From a simple Google search to completing a transaction, the most forward-thinking luxury brands are now embracing sophisticated digital tools that enable the entire experience to take place online.