How do the rich self-identify?
In the discourse of wealth, self-perception is as varied as the criteria defining affluence. It’s not so easy to point at a person and define them as ‘rich’. High Net Worth Individuals (HNWIs) typically are defined by their ability to invest upwards of a million dollars or to be pedantic to the numbers £820,000-ish – home equity notwithstanding. Which is more common in the big smoke of London than one might assume.
Here’s some stats for you to digest:
Indeed, the statistical probability suggests that among the passengers of a bustling London bus, one might find themselves in close quarters with a millionaire. Though the likelihood of such individuals utilising public transport is a matter for debate, or even stepping onto the tube in that case.
Salary brackets offer further granularity with salaries surpassing £185,000, vaulting you into the envied and often castigated echelon of the top 1%. Notably, the Duke of Westminster and his accountant might both belong to this category, however their self-assessment of wealth likely diverges significantly.
‘‘1% of shoppers buy more than 20 items a year and account for a quarter of luxury brand sales.’’
Perceptions & identity of wealth
Perceptions of wealth amongst the affluent can be modest. Many do not consider themselves rich, which poses an intriguing conundrum for luxury marketers.
If they do not self-identify as ‘rich’, traditional symbols of opulence, such as multi-tiered yachts, may not resonate with the majority of HNWIs, who increasingly prefer understated luxury and value enriching experiences over tangible possessions. In this vein, youth-driven movements towards ‘quiet luxury’ suggest a marketing pivot towards authenticity and relatability in lieu of ostentatious displays. Those in the know should be able to recognise the objects dotted around the scene as being expensive, aspirational and defining, even though they are logo-free. These people may have the Birkin bag, but let’s be clear this is just an accessory to the experience or event, not the focus.
Luxury marketing dilemma
With a shift in consumers’ behaviour and the term ‘New money’ sloshing around, how wealth has been attained has changed. Here come the self-made tech companies, e-commerce brands and fintech. The appearance and self-perception of the new HNWI may not be what you might typically think. Exit = ‘Old money’.
Along with the demise of old money go the old aspirations. Grand country mansions are replaced by Manhattan warehouse/penthouses, tangible displays of wealth swapped for private enrichment, ‘the lifestyle’ rejected in favour of a series of life-enhancing experiences.
The post-pandemic surge in spending is showing signs of subsiding, indicating a return to the traditional cyclical nature of the luxury sector. LVMH is suffering a shift in the luxury business itself. While posting continuing sales growth and all-time highs since the pandemic spurge, there is evidently a slow down to their sales growth. (FT.com)
To this end, luxury brands may find it more effective to refrain from gilded cliches in their social media strategies. Instead they might favour content that, while aspirational, such as an enviable encounter with a celebrity, is within the realm of attainable experiences for their clientele.
Furthermore, the ‘poorer’ rich, those whose acquisitions are the result of prudent saving rather than inexhaustible resources, may demonstrate a stronger brand allegiance and more authentic engagement. For them, these purchases are seen as investments rather than mere transactions.
Cutting back on spending is happening, if not always for purely financial reasons. More are considering what sort of companies they are supporting with their purchases, looking for a reason, beyond the product, to give or withhold their money. Do the brand’s values align with theirs? Do they have sustainability plans? If not, there are plenty of alternative brands that do. Again, being rich is just one aspect of these people’s mindsets, discover the others.
Focus on the I, not the HNW
In the stratification of wealth, HNWIs are not a monolith. Their identities extend beyond their varied bank statements, get to know the person beyond the acronym. The onus is on luxury brands to recognise the nuance and individuality of their consumers. A narrative that is both extraordinary and grounded is key to engagement; an over-reliance on wealth stereotypes risks alienating the very audience they seek to attract. Let ‘attainable aspiration’ be your guiding principle.
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