The luxury industry’s sentiment about its relationship to UHNWIs is a valuable indicator of the state of the potential superyacht new build, brokerage and charter market, as it illuminates a broad picture of how the ultra-wealthy are interacting with a wide range of exclusive and expensive products and services.
Wealth-X’s third quarterly report is based on responses to a survey sent in September to over 1,000 luxury brands from sectors including clothing, shoes, watches and jewellery, furnishings, electronics, spirits and wines, art and collectibles, hospitality, aircraft, yachts and cars.
In a positive uptick from surveys earlier in the year, none of the respondents expected to see a decline in their market share in the coming quarter, while nearly two thirds expected to see revenue growth of at least 10 per cent.
Wealth-X’s report provides insights into the state of the UHNWI market in broad, general terms, but its questions about data and information use are perhaps even more valuable indicators of how the wider markets are working to optimise their products and services.
Respondents within the big luxury item category, which includes aircraft, yachts and vehicles agreed that data is instrumental to their business of engaging and retaining UHNWIs.
Further insights include how bespoke marketing, by virtue of its understanding of clients as individuals, has become a preferred strategy because of its proven return on investment.
“Although companies across industries are now able to compile massive quantities of data, many do not have effective strategies and systems to organise, analyse and use the data they collect,” the report’s authors state.
As is very much the case with superyacht brokerage, luxury businesses rely heavily on customer retention and referrals to grow revenues and market share; however the report insists that as of 2014, the role of data when engaging with UHNWIs is relatively unknown.
Eighty-two per cent of respondents agreed or strongly agreed with the statement, ‘data was instrumental in engaging and retaining UHNW clients.’
But the report highlights areas of further investigation: Why is data so instrumental? What kind of data is instrumental? How can companies utilise UHNW data to boost business?
One of the most interesting observations the report's authors made concerned how little UHNWI customer data seems to be actually analysed and used to help inform product development or customer service.
But given that much of the luxury industry relies on customer information cards rather than face-to-face engagement—as is more common in yachting—it’s perhaps not that surprising that the luxury industry struggles with optimising the use of available data.
But the report perhaps provides an opportunity for those of us in the superyacht sector to consider just exactly how much data and information is available to those of us who actively engage with owners and clients, and ask whether or not we are making the most of that information.
Superyacht new build and second-hand brokers have traditionally been motivated to keep crucial data and information to themselves, as information can translate directly into commissions.
But certain brokerage firms, like Burgess for example, encourage an open flow of information, intelligence and leads between brokers in an effort to deconstruct the private-garden mentality that can stifle a culture of open data.
Wealth-X’s report provides a good initial sense of the thinking of the luxury market, but its observations on that industry’s attempts with and challenges surrounding data and its best use are highly indicative of the processes happening across all sectors of consumer manufacturing and sales.
Image courtesy Singapore Yacht Show