Luxury retailers, high-end hotels and real estate brokers can look forward to a UHNW post-lockdown splurge, says a new report.
Last weekend, Hermès, the luxury French brand specialising in bags and scarves, closed its Singapore store so that one of its faithful clients could purchase a new Birkin bag (priced from around US$10,000 and up) without the worry of other customers being around.
Meanwhile this week an UHNW snapped up the 157-acre private island, Horse Island, off the West coast of Ireland, for over £5m, sight unseen. The Mayfair-based agency, Montague Real Estate, said negotiations were undertaken over Whatsapp.
After a recent Sotheby's online jewelery auction which exceeded its US$5.7 million estimate to bring in US$6.1 million, Catharine Becket, Sotheby’s “Magnificent Jewels” specialist in New York, explained the reasoning in a Bloomberg interview: “Clients are sequestering at home and, generally speaking, leading relatively dreary lives. Everyone is waiting for this to be over, and I suppose knowing that a million-dollar piece of jewelry is waiting for you is a fulfilment of when things return to the new normal.”
Hey Big Spender
Coming out of lockdown, the world's ultra high net worth individuals (UHNW) are in the mood for a spending splurge, according to a new UHNW survey published by Luux Media, a UK-based luxury commercial agency.
Nearly three-quarters (75 percent) of respondents are intending to spend the same amount or more on luxury purchases - such as fashion items, jewellery, watches and cars - than they did before the coronavirus outbreak.
As much as 56 percent have considered buying a new luxury watch in recent weeks, while 47 percent have considered investing in fine art, 44 percent have been looking online for a new holiday home while 28 percent have considered buying a country home.
The report showed that the majority of respondents (80 percent) intend to travel immediately or within the first 3 months of the lockdown easing, with 71 percent are expecting to travel the same amount as before, if not more. When travelling for business, 82 percent said that they intend to stay in five-star hotels instead of a private residence, and when travelling for leisure just 48 percent will opt to stay in a luxury hotel. When travelling for pleasure, 17 percent said they would be more likely to stay onboard their private yacht than a private residence or a hotel.
But like everyone else, the world's superrich have been spending much more time at home. Almost 71 percent of respondents have considered undertaking an interior upgrade and/or improvements to their homes during lockdown.
In terms of recreation, 48 percent are looking forward to getting back to playing sports like tennis and golf and 45 percent are eager to watch or attend sporting events. Some 29 percent are keen to get back to the shooting season while 42 percent are looking forward to getting back to the high street and shopping.
Social Media and Print Magazines
Many have been spending more time on social media since lockdown. Instagram is clearly the social media channel for the super rich, with 89 percent of those who responded said they actively use Instagram, compared to just 22 percent on Facebook, 21 percent on Twitter, 26 percent on Linkedin and just 8 percent using both the growing Tik Tok and Pinterest platforms. Just 11 percent said they do not use social media at all. Some 63 percent of the UHNWIs questioned said they have engaged with social media more since the lockdown began.
The UHNW are also buying through social media. 40 percent reported that, in the past 8 weeks, they had purchased a product directly from a company’s website after seeing an advert on a social media platform, while over a third mentioned that an advert on a social media platform had influenced their purchase at a later date, whilst 29 percent reported that they had gone on to enquire about a high-end product or service after seeing an advert on social media.
And print remains very much alive - with 31 percent of respondents saying that since lockdown they have had more time to read, and in turn have been able to enjoy print media much more than before, and 39 percent saying they have been reading printed publications about the same as before. Interestingly, only a fifth admitted never consuming magazines or newspapers in a physical format. Nearly 80 percent said they were equally happy to purchase a luxury product online, while 21 percent would prefer to make all luxury purchases in store.
The survey reached out to over 120 individuals of which 67 responded. Some 88 percent of respondents were male, 12 percent female, while 69 percent hold a net worth of more than £20m, with 41 percent stating that their personal worth exceeds £100 million. Just under 71 percent hold investments in residential real estate, 32 percent in commercial real estate. Many are avid collectors, with 77 percent investing in and collecting luxury watches, 70% investing in art and just over 51% investing in vintage wine, whisky and other alcoholic beverages.
"Our questions were designed to investigate such consumers’ activities, travel plans, luxury purchases and how they have been consuming media during this extraordinary period, as well as their perceptions of luxury brands and how they might have altered during the course of recent events," said Luux Media director, Chris Wilson. "We did this by delivering a 19-page questionnaire directly to a carefully selected list of UHNW individuals from the LUUX network - close connections of ours who have previously attended our event experiences or are engaged readers across our print portfolio of luxury magazines."
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