If anyone has a question that wealth is concentrated at the top, the 2014 Capgemini RBC Wealth Management World Wealth Report gives a nice breakout for marketers who are looking for deep pocked consumers. It re-enforces that even among the rich, the richest are getting richer.
The RBC study tracks “investible wealth” so excluding principal residences. It divides the wealth bands into $1 million to $5 million, $5 million to $30 million and $30 million +. All together these Ultra High Net Worth (UHNWs), High Net Worths (HNWs) and Millionaire Next Doors (MNDs) control over $52 trillion in wealth. As a measuring stick, U.S. debt is about $17 trillion.
Most interesting is the top 0.9 percent sliver of this already rich sample controls about 35 percent the combined wealth. Wealth with this group is also growing the fastest. Add in the HNWs or Mid-Tier Millionaires and it is nearly 60 percent.
From the viewpoint of luxury marketers, there are some interesting takeaways:
- While the bottom 90 percent (the Millionaires Next Door) represents over 12 million households that are globally dispersed making them a very diverse and expensive target to hit, the top two groups total only about 1.4 million households. From a media point of view this is a relatively tight target and includes UHNWs as well at 128,000 households.
- Using Elite Traveler’s global audience of some 630,000 UHNW/HNW readers per issue (we only measure readers with a $400,000 + Household Income thus excluding non-HNW readership) as an example, it is apparent that via print media it is possible to have massive reach if the circulation is appropriately targeted (90 percent of the magazine’s distribution is to private jets).
- The Elite Traveler example reaches nearly 50 percent of the market! As a comparison a massive reach television broadcast such as The Super Bowl reaches 47 percent of U.S. households. Using the Capgemini/RBC definition of HNW/UHNW Elite Traveler reaches 45 percent of UHNW/HNW households (630,000 divided by 1.4 million). From a marketing perspective, this is significant.
With Boston Consulting Group’s recent research showing magazines as the top influencer for luxury purchases, the above example shows the right global media can have significant reach to deep-pocketed consumers that luxury brands need more than ever.