Core brand values are essential to reach all ages of HNWIs but each generation requires a different approach. Chris Wisson, knowledge director at Altiant, explains why
In a constantly changing luxury landscape, it has never been more critical for brands to deploy their power to stay relevant and meaningful.
Fox Communications has collaborated with the luxury insight specialist, Altiant, to collect quantitative data that sheds new light on how the modern High Net Worth (HNW) community differs from generation to generation. The research has been conducted over the past six months and is based on USD millionaires, with each individual manually verified by Altiant, namely those with $1m or more (or equivalent) in Investable Assets (IA).
We hope the survey will help luxury brands create and develop their cultural capital for this hard-to-reach audience. The research focuses on the under- and over-45 age groups and highlights differences between regions and generations with the purpose of understanding sentiment and behaviour.
The survey explores the value of time, spending intentions and the shift in priority between luxury goods vs experiences. The research also highlights changing attitudes related to purchasing channels and risk tolerance regarding investment.
The value of time and social interests
When the group of respondents were asked whether they would prefer free time over money, those under 45 years old said that they are more likely to adopt a more lifestyle-led approach, and 70% of the under-45s chose the extra time rather than the money. For luxury brands, this can provide both opportunities and challenges. On the one hand, these individuals will be looking to optimise their free time and engage with brands in a more meaningful and sustained way. But this may also make them a little more fickle and liable to embracing lots of different brands, dampening potential loyalty.
Elsewhere in their free time, both age groups have similar interests, with cooking/baking and reading leading the way. However, some differences exist, with under-45s more likely to pursue out-of-home activities such as exclusive hospitality (e.g. VIP clubs) and photography. Those over 45 prefer to spend their free time on gardening, home renovations, volunteering and charity work.
Sustainability remains a decisive factor when buying into a brand, especially among the younger age groups. Almost half of the under-45 sample group always or frequently takes sustainability into account when considering a purchase, with the sharpest rise in percentage of those that consider this a vital trait being in China where it has risen to three quarters of the HNWI community. Only 7% claim never to take sustainability into account, which demonstrates how integral the subject has become in purchasing decisions.
Many wealth management brands are also highlighting their sustainable investment products, which should appeal to the 55% of HNWls planning to increase their sustainable investments over the coming year.
Social media and the rise of AI
Despite a reluctance to engage with influencers, social media is still popular with over-45 HNWls: 93% use at least one platform, and 61% do so every day (vs 99% and 74%, respectively, for under-45s). As digital natives, younger age groups are characterised by their online proficiency and presence. They are often open to sharing large parts of their lives online but are also spending their time on different social media platforms such as WeChat/Weixin and TikTok/Douyin. Perhaps unsurprisingly, the best-known platforms are more widely used among the over-45s, with Facebook and Instagram most popular for the older cohort, along with the WhatsApp messaging system.
One of the most high-profile tech developments in recent months has been the launch of Al softwares using the sort of technology seen in ChatGPT. While over-45s are a little more cautious when it comes to brands’ use of these technologies in advertising, 42% are already receptive to it and only 27% are opposed. The response among under-45s is even more favourable, with almost two-thirds being open to being advertised to in this way and an apparent unconcern that tech is now doing what humans used to, whether brand comms, product launches or marketing campaigns.
The research shows that in the future, reality and Al are likely to continue merging closer together as individuals welcome technology even further into their lives. As they become older, the generation that has grown up with concepts such as Web3 and the metaverse is likely to be far more comfortable spending time using and interacting with these tools.
Wealth management, luxury in investment items and risk tolerance
The younger generation is typically more familiar with the circular economy and embracing the resale value of assets such as watches, jewellery and handbags as investment pieces. 42% of the respondents under 45 say that they invest in jewellery/watches, compared to 21% of the over-45s. Highlighting credible and transparent sustainability initiatives such as resale potential can be an effective way for luxury brands to build cultural capital with more environmentally aware customers.
When it comes to more financially orientated investments, the younger cohort is a little more receptive to risk than the over-45s. Almost two-thirds (62%) describe their investment strategy as risk tolerant, with only 12% being opposed to risk. The gap is narrower among over-45s, with 51% saying they tolerate risk in their investments, while 21% try to avoid it.
In conclusion, the HNWI community is growing increasingly receptive to brands diversifying and exploring new avenues, provided they retain their core ethos and purpose. The luxury brands that survive will be those that cut through the online noise and generate cultural capital for their target customer, whatever their age.
Data for this report has been taken from several recent reports conducted by Altiant with affluent/HNW individuals. For more information about this report or any questions, please email firstname.lastname@example.org
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