Harnessing Customer Data to Unlock the Luxury Market
U.S. luxury sales have grown in recent years due to strong demand from domestic luxury consumers and foreign tourists, according to a Euromonitor International report. In 2014, luxury sales increased because of robust demand from domestic consumers and foreign tourists visiting the United States. In fact, the global luxury market had 330 million consumers in 2014 and is expected to grow to 440 million with a total spend of $1.2 trillion by 2024. This luxury market is a quilt of diverse customers who can be segmented in a number of ways.
There are wealth levels, which consist of ultra-affluent, affluent, emerging affluent and potentially affluent customers. Then there's a specific type of luxury shopper: aspirational, moments of wealth, dressed for the part and true luxe. Lastly, these customers can be defined by overlapping groups: high net worth individuals, affluent women, high earners not rich yet and affluent millennials. Each segment varies widely in behavior, desires, tastes, values, requirements, income, wealth, responsiveness and other attributes.
Luxury is a very broad market and the manner in which specific industries market and sell their luxury products, experiences and services varies widely. Some luxury businesses are prestige brands that sell luxury goods and services at the highest ends of their respective markets. Conversely, five-star restaurants and certain four-star airlines cater to a wider spectrum of customers. In fact, many also offer entry-level products to attract emerging and potentially affluent customers. Other companies take a different approach and target a small line of their overall business to the lucrative luxury market, while their brands aren't primarily associated with luxury goods. Hyundai’s Genesis and Equus sedans are perfect examples as they offer luxury products aimed at Audi, Mercedes, BMW, Lexus and Cadillac customers, even though the bulk of Hyundai’s vehicles are targeted to the everyday motorist.