In 2012, The American Affluence Research Center (AARC) surveyed 522 affluent men and women. The average household income of those surveyed was $304,000. Average net worth was $3.1 million, and the average value of their primary residence was $1.8 million. The survey revealed that the most desired quality of any luxury purchase was exclusivity. Those surveyed indicated they expected to remain loyal to brands offering exclusive luxury.
Tiffany & Co. agreed with AARC’s survey results. The company’s marketing plans revolve around the concept of exclusivity. In fact, that’s what Tiffany & Co. sell, privileged exclusivity. Only instead of calling it exclusivity, they call it “statement jewelry.” As part of the experience of buying a precious stone, in 2006 Tiffany started offering to take clients to a diamond mine. After watching the diamond being cut out of volcanic rock, the client chaperones the stone home, where the client actually helps decide how the diamond will be cut. The cutting or shaping of the stone takes place in Canada or Belgium. From there, the client travels with the diamond to Tiffany’s headquarters in New York City, where experts create a one-off design for the stone. Depending on the size of the stone, it could be used in a necklace, tiara, pendant, etc.
The affluent customer’s entire experience at Tiffany revolves around the feeling of exclusivity. It is the thrust of Tiffany’s marketing. And the same concept can be adopted by any company marketing luxury products to their customers.
One area where the feeling of exclusivity is being utilized is in marketing to the new rich in emerging markets. PR-Insider reported that according to the Merrill Lynch-Capgemini 12th Annual World Wealth Report, assets of High Net Worth Individuals (HNWIs) rose in 2009 to $40.7 trillion. A trillion, by the way, has 9 zeros. The average HNWI wealth index exceeded $4 million in 2009. At the present time, the High Net Worth population numbers 10.1 million people. Brazil, India, and China experienced the largest growth of HNWIs.
In China, according to the 2012 Hunun Wealth Report (HWR), in 2010, there were 960,000 people whose personal wealth exceeded US$1 million. HWR profiled these wealthy individuals. The average age of millionaires is 39, while the average age of those with $10 million or more is 43, and the average age of those with personal wealth exceeding $100 million is 49. These wealthy individuals desire international luxury brands, especially those from Western European countries. In order of preference, they buy luxury watches and luxury cars. Their primary criterion is exclusivity.
HWR states that luxury brands wishing to appeal to this emerging market must have a precise marketing strategy. The usual approach of pricing and advertising will not be as effective as in the U.S.
Forbes reported that these new rich subscribe to the motto “If you’ve got, flaunt it. Or else you ain’t really got it.” This means that marketing to the new rich has to include the idea and the feeling of exclusivity. Why? Because the new rich purchase luxury products so they can associate themselves with the image of exclusiveness. In other words, the real reasons the new rich buy luxury brands are psychological: recognition, approval, status, admiration, and the feeling of being exclusive. This has resulted in creative marketing techniques to reach targeted customers.