The 'we' economy
Daniel Ziriakus explores how COVID-19 has hastened changes to luxury consumption…
The COVID-19 pandemic has created a hitherto unprecedented opportunity for businesses and individuals alike to take stock and reevaluate priorities. SuperyachtNews speaks with Daniel Ziriakus, president and COO of Northrop & Johnson, about how the COVID-19 pandemic has sped up changes in luxury consumption that were already beginning to take form.
“As an industry, and indeed the luxury market more generally, we are in the midst of an enormous shift in consumption habits,” starts Ziriakus. “It had started before COVID-19, but once the pandemic hit the change started to happen even more quickly. We are changing from a ‘me’ economy into a ‘we’ economy.”
In the years leading up to the 2008 financial crisis, there was a period of ostentatiousness that saw a glut of wealthy consumers eager to showcase their wealth. The cars, watches and superyachts played a central role in how factions of the ultra-wealthy chose to be perceived, and it is this phenomenon that Ziriakus refers to as the ‘me’ economy – “look at me and my wealth”. Perhaps unsurprisingly, this focus shifted after 2008, as conspicuous wealth consumption was widely considered to be an unpopular move.
“When the markets began to rally once again, especially since 2016, the ‘me’ economy and image-based luxury consumption began to pick up,” continues Ziriakus. “The idea of luxury being a status symbol came shooting back to the forefront, but this time, it was supported by various social media channels. However, over the last year, we have once again seen a shift away from the ‘me’ economy. I can certainly see from our clients that there is a far greater focus on family and loved ones, helping one another, creating positive environments and giving back. Once COVID-19 hit, a lot of other clients took time to pause and rethink, and now more than ever, ego has taken a backseat and they are focussing on shared experiences and long-lasting memories – the ‘we’ economy.”
Ziriakus is aware that for some, the allure of cars, watches and jewellery will remain, given a number of people have a genuine enthusiasm and passion for them. However, increasingly, he believes that UHNWIs are more concerned about exclusive shared experiences.
“COVID has propelled people into the ‘we’ economy as they revaluate what truly matters to them. Furthermore, global travel limitations have encouraged new clients to enquire about charters and superyacht experiences,” explains Ziriakus.
As yachting has made headlines for being regarded as one of the safest and most hygienic ways for UNHWIs to holiday during a pandemic, the market itself has begun to work harder in order to develop experiences that meet buyer expectations. It could be argued that yachting, to a certain extent, has been able to lean on models that have satisfied clients since its very inception, such as visiting traditional yachting hotspots and enjoying the Med-marina lifestyle.
“The charters that we are booking right now require excellent on-board programmes. But, we also work with a lifestyle agent called Embark Beyond, which is a very high-end travel concierge,” says Ziriakus. “They are able to work behind our brokers in order to enhance the superyacht experience. In a world that is currently full of limitations and social distancing, we are going even further to facilitate unique experiences that buy into the ‘we’ economy, such as flying from the superyacht directly to a private concert at a villa in Tuscany.”
Where the tried and tested charter models are no longer possible, there is an onus on the superyacht market to work harder to create bespoke experiences that entice UHNWIs to continue engaging with the market and, while COVID-19 may be temporary, the lessons learned throughout this period should result in a charter market that is more flexible than it ever has been in the past. When the market returns to normal, we must work tirelessly to ensure that ‘normal’ is not something we aspire to. The future of yachting is the development of options and the pandemic has forced the creation of new options and a refocusing on elements of the yachting experience that were previously overlooked in favour of the easy option.
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