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created over 3 years ago | Tagged: |
2martens
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Guess who says the following attributes are most influential in making "important purchases" today: value, price, overall quality, good design and functionality? A clue: 84% of this group texts from cellphones; 78% use social networking; 66% use the mobile web and 57% use mobile apps. It's not who you think it is. In fact, it's a group whose median age is 45, not 19.
According to "The New Face of Affluence," an in-depth study from Dwell Strategy and Research, San Francisco, these are the attributes that drive purchase decisions of the "New Affluents." Indeed, the median household income of the more than 1,000 survey respondents is nearly $200,000. They're the same people who have the economy and the environment top-of-mind when making these purchase decisions. Using 2009 Mendelsohn Affluent Survey psychographic data, and with the help of DJG Marketing, New York, Dwell identified a segment of nearly 9 million Americans who have household incomes of $100,000 or higher. They represent less than half of 1% of U.S. households, spend $303 billion annually on their favorite brands and have a whole new take on what it means to be wealthy.
According to the survey respondents, "luxury" brands, per se, are no longer important to them, or even relevant; neither is "overall social status," they say. This generation of nouveau riche is shunning "conspicuous consumption" in favor of brands that represent quality, aesthetics and authenticity. These attributes, along with uniqueness, integrity, design and performance, represent today's "prestige" for these high-end consumers. And their emerging values and brand motivations make these consumers a more diverse group than one might assume.
A brand does not have to be expensive to attract New Affluents. What they're now demanding from brands is a new and different kind of relationship. And, as supported by these findings, the days of controlled, top-down brand marketing are over, especially for this sector. These wealthy and would-be elites are actually looking for brand interaction -- a dialogue -- based on integrity, authenticity and performance. And not only are they equipped for interaction, they're demanding it.
So what brands do New Affluents find meaningful, authentic and relevant? Apple, Sony, BMW and Ralph Lauren, unsurprisingly. But Crate & Barrel, Ikea, Whole Foods and Levi's, too. Porsche, Lexus, Chanel and Viking. And Target, North Face, Volkswagen and The Gap. Missing from this segment's 75 favorites list are classic luxury brands like Cadillac, Gucci, Louis Vuitton, Armani and Versace.
In other words, cultivate a relationship, don't just sell a product. "Great brands create experiences, not products," say the majority of the study's respondents. It may be time for more brands to consider this sector as a source of revenue. If you're authentic, functional and design-centric, and you know how to cultivate a genuine relationship between the brand and these New Affluents, then it may be time to consider some targeted, interactive communication with them.
So, is luxury really dead? No. But it has been redefined by those in the category who have clearly rejected "social status" as a contributing factor to purchase decisions. They're buying fewer things of higher quality; they're shying away from disposables when they have a choice. They have replaced older values with contemporary new qualities such as the economy, sustainability, the environment and current cultural trends as top-of-mind issues affecting these decisions.
