High-end home brands can benefit greatly by better understanding consumers.
One of the common themes at Upward Home is this: affluent consumers are not a homogeneous group who can be marketed to in the same way. Rather, they are remarkably diverse – in terms of their buying and usage patterns, media consumption, and their path-to-purchase.
Affluent consumers “do not think and behave alike, and averages do not tell the whole story,” says Bob Shullman of the Shullman Research Center. That’s why marketers often find that segmenting affluent consumers is an effective way of targeting their most profitable prospects, since the attitudes of affluents can vary dramatically by age, gender, net worth, and by tenure of wealth, among other factors.
Dr. Jim Taylor of the Harrison Group segments affluent consumers by the length of time people have been wealthy – grouping them into apprentices, journeymen, and masters. “It’s one of the most powerful predictors of not only how they spend money, but how they view themselves and live their lives,” says Taylor.
Ipsos Mendelsohn segments affluent consumers into different psychographic groups – traditionalists, individualists, globalists, style setters – to help marketers better understand how consumers see themselves.
In a recent report, The New Face of Luxury, data-driven marketing group Epsilon offers yet another interesting way to segment affluents – based on shoppers who buy luxury retail goods across the top ten merchandise categories, including high-ticket home décor and gifts.
The report describes four kinds of shoppers who buy luxury retail goods:
Aspirational Shopper: The Aspirational Shopper desires to own pieces from a brand, but does not have the means to do so on a regular level. This customer shops mostly from outlets or online members-only discount boutiques, or purchases low-ticket designer brand items such as cosmetics.
Moments of Wealth: The Moments of Wealth shopper may save for a specific piece from a particular luxury brand, but does not purchase from the brand frequently. This shopper tends to make one-off purchases over a long span of time.
Dressed for the Part: This shopper purchases luxury items to give off the appearance of being someone who lives a luxury lifestyle, but the Dressed for the Part shopper does not have the financial resources to be a true luxury buyer. This fashionista shopper devotes most of her spend to fashion, accessories, or a car rather than an expensive home.
True Luxe: The True Luxe shopper has the means to purchase luxury items at will without concern for finances. This shopper purchases from luxury retailers frequently throughout the year.
Think about your brand’s existing and prospective customer base through this lens. Do you have hard data on which segment (or segments) offer the most promise and potential? Absent any hard data, do you have an intuitive educated guess?
Regardless of which segmentation method is best suited for your brand, I believe that you can benefit greatly from some thoughtful work better understanding your customers – so that your marketing efforts can reach their fullest potential.
If you’d like to learn more about the study, The New Face of Luxury, click here.