What do the Super Rich spend their money on? When we interviewed over 600 Ultra High Net Worth (UHNW) private jet and fraction jet share owners for “The Sky’s the Limit: Marketing to the New Jet Set” Home Improvements was number one.
Of course, when one considers those surveyed average three homes, spending just over a half million dollars a year can go quickly.
Spending nearly a quarter million dollars on fine jewelry was a combination of six figure purchases and ongoing buying at accessible price points. You know, pop into Neiman Marcus, pick up a couple new outfits and then accessorize with a new $2,000 bracelet and $4,000 earrings. When one considers the cost of flying privately is somewhere between $5,000 and $20,000 per hour, all of the other spending equates to you or I popping down to Starbucks and splurging on a large premium coffee.
We also looked at frequency of purchasing and found while 90 percent of those jet owners we spoke with buy designer fashion on an annual basis followed by 89 percent for fine jewelry, only 10 percent said they had chartered a yacht in the previous year.
- Home Improvements — $542,000 (75 percent)
- Yacht Charters — $404,000 (10 percent)
- Fine Jewelry — $248,000 (89 percent)
- Automobiles — $226,000 (15 percent)
- Meetings and Events at Hotels or Resorts — $224,000 (73 percent)
- Villa/Chalet Rentals –$168,000 (28 percent)
- Leisure Stays at Hotels/Resorts — $157,000 (65 percent)
- Watches – $147,000 (32 percent)
- Cruises – $138,000 (21 percent)
- Fashion and Accessories — $117,000 (90 percent)
Other notable spending includes $107,000 on spas, $98,000 on experiential travel and $29,000 on wines and spirits.
For luxury marketers, there is no question the Super Rich are a prime target. Research by Wealth-X shows 212,000 UHNW families spent $234 billion on luxury products and services last year.
Within each category, we created three buying profiles: Trendsetters, Connoisseurs and Winners. Frequency and critically amount spent varies significantly in each category for the various profiles. Using watches as an example, Trendsetters accounted for 47 percent of purchasers but only spent $81,000. Winners made 20 percent of watch purchases by those we researched spending $176,000. Connoisseurs accounted for the remaining 33 percent and spent $223,000, not hard when one considers that collectible watches run high into six and even seven figures. Of course, even among Connoisseurs, there are different levels of “watch collectors” some with great knowledge of what makes it tick, others who are aesthetic buyers.
More to come.