If it’s time for the World Economic Forum in Davos, it’s time for another damning report by Oxfam about the One Percent, but before you say you’re too busy to care – and yes there are valid points such as tax avoidance – you may well be part of the greedy rich.
Oxfam notes that entry into the One Percent, based on data it evaluated from Credit Suisse, means having total assets of just $760,000. So if your apartment, house, car, bank accounts, jewelry, comic book collection and whatever valuables you have add up to that amount, congratulations, you are in the One Percent.
You may say, you don’t feel like you’re in the One Percent, and my response is, that’s my point. After all, you can’t even buy a studio apartment in Manhattan for three quarters of a million bucks.
And by the way, to be in the top 10 percent worldwide takes a net worth of just $68,800. Please note, that’s not a household income, that’s net worth!
However, if you are selling luxury goods here are a couple things to think about. Credit Suisse says, the assets of the top One Percent are now greater than the remaining 99 percent, so clearly that means that the One Percent is in fact a good starting point in terms of targeting consumers who can afford what you are selling on an ongoing basis. If you are marketing in the U.S., the entry point for Household Income to the One Percent is just under $500,000.
But while making a half million dollars may provide a comfortable lifestyle with nice vacations and some luxury purchases now and then, it is not Super Rich, which is generally put at a Net Worth of at least $30 million and a household income in the multiple millions of dollars.
Coincidentally, coinciding with the Oxfam report, SIHH, a major watch show opened today in Geneva. Sellers of Swiss high-end watches may see a decline in sales after two middling years, according to a piece in The New York Times by Victoria Gomelsky. She outlines how a perfect storm of declining oil prices are hitting the economies luxury consumers in Russia, the Middle East and Africa, while the crackdown on gift giving in China and the Apple watch are all conspiring to provide headwinds.
With no silver bullet in sight, as China, Russia, Brazil and Nigeria provided in the booming 2009-2012 period when the U.S. economy tanked, what should marketers be thinking about in terms of boosting sagging sales?
As part of a recent project I’ve been working on, I was able to ask about media consumption with UHNWs who own private jets. The most interesting point I found is what they read mainly revolved around two distinct areas: B2B Media for the industries where they make their money. I had previously never heard of Apparel, Auto Dealer News, Auto Dealer Today, Breeder, Citrus News, Citrus Industry, National Fitness, Turbine and Club Solutions. The second was areas of passion, with titles such as Car & Driver, Hunting, Hunting & Fishing, Sailing, Whitetail and Practical Horseman. Yes, there were watch magazines in the mix.
My research was for a travel project, and the other thing that surprised me was the general lack of knowledge about some major luxury hotel news which was the talk of the industry, but was not even on the radar of the Super Rich. The again, 85 percent said they don’t read any travel magazines or e-newsletters. I suppose they are busy running their businesses. So my other takeaway, is UHNW consumers are probably not as familiar with what you are selling as you may think, despite all the A List places you’ve gotten coverage.
There is a fairly large opportunity to strategically reach the Super Rich via media, however, the answers may not be obvious and unfortunately, most of the research used by media buyers to figure out where to allocate ad dollars doesn’t cover where the real action is, which is the top half of the One Percent. And by the way, if you were wondering how much it costs to replace a cracked windshield on a Gulfstream private jet, that would run you about $800,000, including labor.