There is a frequently quoted, perhaps even mythical, exchange between American authors F. Scott Fitzgerald and Ernest Hemingway, observing the lives of America’s richest residents during the raging and roaring 1920s. Fitzgerald, a famous observer of the wealthy set, wrote in a short story that “the rich are very different from you and me.” Hemingway, always puzzled by Fitzgerald’s fascination with the rich, snidely responded, “Yes, they have more money.”
This exchange happened in 1925 not only at the height of the most prosperous era in U.S. history but also on the precipice of the biggest economic collapse ever known. It was a time of great change. Now, almost 100 years later, amidst this generation’s recovery from our own economic collapse and another period of pivotal change, we are still consumed with the behavior of the rich. However, they are now affectionately (and sometimes disdainfully) known as “the 1%,” and our tracking of them is perhaps more as an economic indicator rather than out of mere fascination.
What we are seeing today, other than the fact that, yes, the rich have more money than the rest of us, is that they are still spending, but more wisely and selectively. Nonetheless, there are patterns of high-end consumer behavior to consider as your company makes strategic adjustments to better appeal to this recession-proof audience.
1. Above all else, QUALITY matters: Quality of product, quality of service, and quality of experience – if it is not quality, it will not qualify for consideration. The most successful luxury brands know that quality must apply not only to the product but also to the purchase experience in the store or online, the user experience at home, and the brand experience after the sale. The Luxury Marketing Outlook 2012 reminds marketers that just as they focus on convincing consumers that luxury goods are worth the price, they will also “need to put the same effort into ensuring that their commerce platforms represent the same level of high-end quality as their products.”
Luxury consumers who are happy at all touch points with a brand are not only more likely to be brand loyal in their next purchase, but they’re also more likely to refer a brand to their wealthy friends. According to the American Express annual “Survey of Affluence and Wealth in America,” 69% of wealthy consumers say their friends’ opinions are valued and are by far the most popular source of trusted information. Brands that have perfected this continuum of brand experience include the usual luxury suspects like BMW, Lexus and Burberry, but also less obvious luxury favorites like Apple and Target. These brands get that it’s not a product you buy, but a brand you “join,” and quality of experience is your point of entry.
This full spectrum of quality experience is particularly key in the travel segment, where this consumer will pay premium prices for a fulfilling escape. Our friends at Blackberry Farm in Walland, Tennessee, have understood this from the inception of their unique mountain resort. Once considered one of the best regional luxury Smoky Mountain retreats, Blackberry Farm worked with Ramey to leverage their uncompromising approach to guest accommodations to be recognized as one of the best small luxury hotels in the country. Most recently in 2012, Conde Nast Traveler and Travel and Leisure recognized Blackberry Farm as among the best hotel properties in the world.
2. MINE is like no other: The 1%ers are also willing to pay for bespoke in whatever form they might find it. Custom-made, artisan and one-of-a-kind products and services resonate with this consumer. This heightened desire for “unique” comes at a time when over half of luxury consumers agree that craftsmanship is steadily decreasing in luxury products (2011 Luxury Institute Wealth Survey).
Ramey client Viking Range has capitalized on this desire for one-of-a-kind by introducing a “custom” line of ranges in which consumers can design their own behemoth kitchen workhorse ranges down to color, knob finish and burner configuration. Ramey launched a digital campaign promoting this product line by targeting the high-end consumer in the kitchen-design-inspiration mode with online ads allowing the consumer to design their own custom range without leaving the web page.
3. For those who have more, LESS is more: The conspicuous (some would say even gross) consumption of the 80s and 90s has been replaced by a more selective process in which affluent consumers seek quality over quantity, and substance as opposed to showy style.
The purses emblazoned with large logos, which served as small, strategically placed outdoor signage for some of the top fashion brands, have now been replaced with sleeker lines and an approach more akin to the “if you have to ask… ” attitude. Today’s purses may cost twice as much as the showier version of a decade ago, but the logo representation will be more reflective of an artisan approach – subtly etched on the interior or at the base, out of sight and out of “show.”
We recently took a trip with our client John-Richard to evaluate how luxury furniture brands distinguish themselves on the designer showroom floor, and discovered surprisingly little on-floor signage or logo representation. The distinction came when the designer or sales representative could stop and tell a story about a product. The customer wants to know the background of the brand and that it is special in its own way. Also, designers want to be the hero to the substance-seeking client and tend to prefer brands that help them do so.
So, almost 100 years later, the Fitzgerald/Hemingway discussion and analysis of the rich continues. Wouldn’t they be fascinated with all of the intelligence and endless data we have on the 1% today? But, unlike those simpler times, today’s marketers spend far less time contemplating the existence of the rich and far more time perfecting the many ways in which they might to appeal to them.
Kathy Potts is VP/Director of Account Management at The Ramey Agency