The landscape of luxury markets is changing, and at an almost unprecedented speed. The profiles and preferences of the world’s ultra wealthy no longer fall neatly into the preconceptions and stereotypes of UHNWIs that so much luxury marketing was based on. SuperyachtNews.com explores this shift and asks what the superyacht industry can do to keep pace with the rapid change.
At Make Your Mark 2016 Ana Andjelic of Havas Luxhub, the global luxury consultancy firm, highlighted some of the major factors that must be considered in order for superyacht marketing to grow and flourish.
“Luxury is a massive and incredibly complex global market that is projected to be worth £1.2 trillion by 2020,” explained Andjelic. “The interesting part is that the forces behind this growth didn’t exist five or 10 years ago.”
Wealth gained through old money, natural resources and traditional industries is not going anywhere, at least for the foreseeable future. However, the challenge for the superyacht industry has, and will continue to be, the ability to attract new generations and demographics of owners.
“The new generation of UHNWIs have an entirely different set of values and behaviours to those of old,” Andjelic said. Much of today’s new wealth has been forged in the chips of Silicon Valley rather than the oil wells of Russia and the Middle East, creating a generation of ultra rich, socially and environmentally conscious millionaires and billionaires with new conceptions of luxury that value access over ownership.
Andjelic highlighted Mark Zuckerburg, co-founder and CEO of Facebook, as the archetypal new age UHNWI. With two modest homes — when compared to his cumulative wealth — and five cars, none of which are of luxury models, Zuckerburg lives a perceivably ‘normal’ life. However, when one considers the vast sums of money he contributes to various charities and experiences, his ‘normal’ life loses all semblance of regularity.
What this highlights, in a crude way, is the points expressed earlier in this article. The ability to access any experience at any time, trumps owning items or experiences for a number of contemporary billionaires.
The behaviours exemplified by these individuals fall neatly in line with the route through which they reached the dizzying heights of the ultra wealthy. Technology-based wealth expects products and experiences to update at the same speed as the devices it had a hand in creating. So how does an industry where the average build project takes between 18-36 months to complete keep up?
The battle to encourage new ownership is ongoing, and it is an issue that the superyacht industry is well versed in. But might this swing towards access rather than ownership signal a hay day for the charter market, and isn’t the charter market widely considered to be the most prosperous route to ownership?