The average affluent and wealthy family will spend slightly more than $20,000 per household on luxury items in the next 12 months. That’s according to a whitepaper, titled, “An Analytical Approach to Wealth Intelligence: How Luxury Marketers Can Grow Market Share Using Predictive Analytics and Modeling,” produced by WealthEngine, Inc., a provider of wealth intelligence and analytics.
Another statistic of note in the paper is that nearly two-thirds of all luxury spending will be consumed by the top 12 million families. For luxury marketers out there, you know that means that finding qualified prospects within this top tier is where your gold is at.
“With the variety of choices available and the changing dynamics of customer relationships, it’s important for marketers to distinguish themselves and demonstrate a deeper understanding of their customers and market segments,” said James Dean, Senior Vice President and Head of the Luxury Practice at WealthEngine.
In an interview with WealthEngine, Stephen Kraus, Senior Vice President and Chief Insights Officer at Ipsos MediaCT, summarized a trend in luxury saying, “The definition of luxury today is not the same as it was five years ago.”
“Five years ago, we used to think of anyone having more than $100,000 in annual income – the top 20-25% of the U.S. – as a luxury target,” Kraus continued. “Five years ago, that ‘mass affluent’ group was considered by luxury marketers to be the ‘aspirational luxury shopper,’ and was a key target. However the economic recession has shown that their spending was based more on how rich they felt, or how rich they anticipated becoming, not how rich they really were. With the changing economics, luxury marketers need to go upstream, redefining their target audience and focusing on ‘Ultra Affluents’ – such as the 2-3% with incomes of $250K+.”
The paper also uncovers how social media and the online marketplace have changed the game for luxury companies.
The paper, while undoubtedly self-promoting of WealthEngine’s services, does a good job at identifying trends in the luxury space, providing best practices, case studies and a methodology for leveraging analytic solutions to find prospects that look like top customers, and to find opportunities to upsell, cross-sell and drive share-of-wallet among existing customers. It outlines the role of analytics in building a marketing strategy, some of today’s trends and challenges for luxury marketers and how to determine the optimal analytic solution based on clear goals.
If you’re intrigued and this is relevant to you, head over to their site and grab a copy.