The luxury industry itself has undergone a transformation and today, details that separate elite brands from one another are under intense scrutiny. This reality, marked by ever growing bank accounts for the wealthy, supreme integration of technology and user experience, and a perceived lack of freshness, has created opportunity. Specifically it has opened the door for an emergence of disruptive brands to meet consumer needs with distinct offerings such as luxury homes by-the-night via Airbnb or Black Cars on-demand via Uber. At the same time, the emergence of private label brands, ranging from the indulgent Neiman Marcus cashmere collection, to the commonplace Whole Foods 365 brand are changing the way people evaluate how, where, and when to spend. Together, these trends are enabling today’s affluent consumer to have choices in all facets of their lives, that are plentiful, well executed, and at times, available at a better value than traditional luxury brands have been.
This search for meaning is not limited to finding a real estate professional, it is present in the home buying process as well. The following profiles show that, in fact, differences from the subtle to the dramatic can be found based on the buyer’s price range when comparing three markets, the $1 to $2 million buyer (highlighted below), the $2 to $5 million and the $5 million and above. All three profiles can be viewed in the complete white paper.
Practical explorers want to feel like they are making a smart decision. They have earned significant wealth, and have a relatively long experience with affluence, which makes them diligent shoppers who tend to find a product/brand they like and stick with it. Their passions focus on family-friendly activities and promoting personal well-being. Luxury is not central to their lifestyle.
Buyer Insight: Loyalty Over Luxury
This consumer, though significantly affluent, tends to repeatedly use products and services they have used before, and so they are hesitant to stray far from what they know.
97% I am loyal to certain brands because I know what I am getting
94% My first choice is typically a brand I have purchased before
Luxury is not a core part of their vocabulary, so a purchase like a $1M to $2M home, may be seen as indulgent or extravagant.
10% I am usually the first of my friends to adopt new fashion trends
7% I am often the first of my friends to buy the latest luxury products
6% Luxury brands are worth every dime
Buyer Strategy: Trust the Professionals
Buyers in this price range tend to rely more on the real estate sales professional to take them through the purchase process. The majority agree, “I am not comfortable purchasing personal residential real estate without the help from an agent (80%).” The Practical Explorer is motivated by emotional connections based on happiness, feeling good, and having fun.