On the 15th of September we chaired a Social Media Week panel on the theme of connecting with high net worth individuals. Having worked with a lot of luxury brands over the past years, we wanted to dispel a few myths about these consumers and explore what this rarefied community does, what they consume and how they consume it and how brands and their agencies need to navigate these behavioural eccentricities.
With help from Madeleine Ollivier and Winston Chesterfield at Wealth-X, here are some of the things we found.
Who are the HNWIs?
High net worth individuals are defined by their net worth once you’ve accounted for their shares, properties, collectibles and other assets. It’s not enough to have a high income to be a high net worth individual, and depending on whom you ask the tiers of net worth can be confusing.
High net worth individuals have a net worth between $1m and $30m, point at which they are considered ultra high net worth. The step below is now considered a ‘mass affluent’ group, but there are talks of redefining the $1m (or even £1m) threshold in some countries.
The number of UHNW individuals is growing across the world, both in net worth and population, according to Wealth X. There are now around 187,380 UHNW households, with a net worth of around $25.8 trillion. Unsurprisingly, most can be found in the USA, in China and in Europe.
Old money vs. new money
There is a growing distinction between inherited wealth vs. self made wealth, with sectors like technology driving the number of self made HNWIs globally and ‘new money’. In places like Europe it’s likely that wealth has already been running in the family for a number of generations if it hasn’t been squandered by the 3rd.
Regardless of how they got their money, younger HNWIs are more technologically savvy and global in their outlook. They’re not all as internationally mobile as media might make us think but their level of openness is much higher compared to their boomer counterparts.
As far as display of wealth is concerned, most HNWIs are very private individuals, suspicious of overt displays. This is especially true of new centres of wealth like the US West Coast where luxury consumption is skewed towards the experience (e.g. dining, wine, entertainment and travel), as opposed to the Middle East where a Vertu phone on display alongside another phone might not be such a strange sight.
How do HNWIs prefer to connect to one another and digital products or services?
The wealthier you are, the bigger the pressures on your time. Despite all the technology, connecting is often better face to face or even over the phone, especially bearing in mind that HNWIs are surrounded by staff or assistants who can filter through other means of communications such as email.
Technology is facilitating the luxury digital e-commerce experience - it’s enabling the ‘holy trinity’ of newness, convenience and speed. While some brands have been slow to adapt, it would not be unusual to see future partnerships between luxury brands and platforms that have mastered the art of logistics.
Social networks are a mixed bag, with LinkedIn and Instagram worthy of mentions as platforms that HNWIs frequent and find appropriate for brand communications as long as it’s appropriate to the channel. Contrary to what people think, there aren’t that many ‘exclusive’ social networks mere mortals don’t have access to, but we might see the birth of ‘peer to peer’ networks of HNWIs facilitated by technology.
Some key conclusions
- For visual luxury brands, there’s no better place to be than Instagram: it’s a place where certain HNWIs find it easier to share bits of their personal life or follow brands in ways that Facebook or Twitter aren’t.
- Connecting can be done in a personal manner if information is collected delicately. Forms are not the checkout part of an online shopping experience should feel as seamless as possible.
- Real connection requires an outstanding digital experience and flawless service (forget relying on them to come to stores). Social media can play a big role in creating a sense of anticipation ahead of an event or launch, adding to the overall feeling of surprise and delight.