Is there a difference between affluent, wealthy and luxury consumers?
While experts from around the luxury market don’t agree on how to classify luxury buyers, there’s one thing they do agree on: Luxury buyers aren’t one homogenous segment. While some characteristics overlap, their motivations and process may vary, which puts the onus on marketers to consider their prospect’s journey and meet them where they are.
Typically, no financial benchmark is set for the luxury buyer group. That’s because buyers don’t need to be affluent or wealthy to buy luxury products and services — in fact, many aren’t. Average-income luxury buyers perceive their buying status when making a luxury purchase.
1. Trendsetters: These buyers are particularly attuned to trends and are often early adopters. Once they feel validated in a decision, they’ll tend to invest heavily.
How to reach them: These buyers are influenced by social media as well as their social circles. Interests include fashion, travel and cars. These early adopters may also help influence other prospects in their social circle, so consider leveraging them for referrals and events.
2. Winners: This buying segment tends to recognize milestones and mark major accomplishments with purchases. As buyers, their purchases are typically thoughtful and well-researched, with much time and consideration put in beforehand.
How to reach them: For this segment, it’s about building the vision of “the dream.” Convey how your solution marks the next milestone in their life’s journey. Maintaining an exceptional brand — and one that isn’t easily attained — is also key.
3. Connoisseurs: This buying segment is known for their expertise. Their purchases are deliberate, with a keen focus on quality, craftsmanship, construction value and history.
How to reach them: Here, the focus is on the product itself, showcasing the quality and value of your community and its amenities and services. Highlight any aspects of your community that honor the history of the area, construction materials that are higher quality than your competitors and the thought and expertise put into floor plans, amenities and so on.
Luxury real estate trends
For many communities, looking to luxury real estate trends also can help provide insights into their target prospects, many of whom are affluent buyers moving from a high-end home or considering a luxury home or apartment for their next move. According to The Report from Caldwell Banker, real estate, too, sees multiple segments emerging among affluent consumers: “Inconsistency made be the new normal for affluent consumers.”
The report predicts that some buyers will embrace more conscious spending and minimalist luxury for the remainder of 2023, while others are investing in experiences that provide personal enjoyment with a renewed prioritization of generational wealth, wellness, travel and leisure. Post-pandemic, their mindsets have changed — they realize life is short, and thus many affluent consumers are inspired to seize the day. All these trends provide inroads to focus on how your community’s lifestyle can meet their needs and personal goals in retirement.
Peak demand is for homes and communities that offer it all: location, move-in ready condition and a complement of amenities. Must-haves that top the list of desired amenities for buyers include:
- Indoor-outdoor space
- Well-appointed kitchens with the latest features
- Beautiful views
Succeeding with affluent buyers means understanding their motivations and positioning your community as one that meets their buying priorities.