Spend­ing on ex­pe­ri­ences not lux­ury goods is the main­stay of con­sumer buy­ing be­hav­iour

HT Estates - - FRONT PAGE - Nam­rata Kohli ht­es­tates@hin­dus­tan­times.com

The af­flu­ent home­buyer tends to favour new­ex­pe­ri­ences over just ac­cu­mu­lat­ing pos­ses­sions. Even the home buy­ing process should be en­ter­tain­ing and re­plete with spe­cial treats such as a day at the spa, a din­ner at a res­tau­rant, and an evening at the theatre.

Trans­ac­tion com­pa­nies, who deal with high net worth clients, have us be­lieve, that con­sumers to­day en­vi­sion homes as more than phys­i­cal places to live — they see it as a lifestyle. Brands are al­ready cre­at­ing im­mer­sive and in­ter­ac­tive ex­pe­ri­ences in or­der to dif­fer­en­ti­ate them­selves.

“Spend­ing on ex­pe­ri­ences rather than lux­ury goods is the main­stay of con­sumer buy­ing be­hav­iour and the ex­pe­ri­ence of buy­ing real es­tate is no dif­fer­en­tit should be full of en­ter­tain­ment,” says the lat­est re­port re­leased by Sotheby’s In­ter­na­tional Realty and Bos­ton Con­sult­ing Group (BCG) ti­tled “The New Af­flu­ent”.

Ac­cord­ing to a Sotheby’s Realty spokesper­son- “The con­ver­sa­tion about lux­ury has evolved. Con­sumers are no longer con­nect­ing with con­sump­tion and os­ten­ta­tion and in­stead, are seek­ing a much more per­sonal take on what’s most mean­ing­ful and re­ward­ing – ex­pe­ri­ences, art, in­spi­ra­tion, fam­ily, and re­la­tion­ships.”

The younger con­sumers seek far more in­ter­ac­tion with their favourite lux­ury brands as com- pared to the older gen­er­a­tion. For in­stance, 48% of the Mil­len­ni­als (born between 1982-1996) want a more dy­namic equa­tion with the brand. 41% of Gen­er­a­tion X (born between 1965-1981) again want a “two way com­mu­ni­ca­tion” and like to share opin­ions, pro­vide feed­back, and have adi­a­logue with brands and­in­flu­ence trends. How­ever, 76% of Baby Boomers (born between 1946-1964) still pre­fer a “one way com­mu­ni­ca­tion” about whatand where they will in­vest.

One way com­mu­ni­ca­tion means by gath­er­ing in­for­ma­tion, ac­cess­ing con­tent, com­par­ing prices, com­put­ing yields on their own etc.

The re­port also pointed out how ‘ the new af­flu­ent’ loves ‘do­ing it them­selves’ when it comes to buy­ing and sell­ing, thanks to the tech­nol­ogy driven real es­tate dis­rup­tors. This calls for trans­ac­tion agents and com­pa­nies to be­comem­o­re­cus­tomer savvy.

“What mat­ters to­day to most of the es­tab­lished as well as new af­flu­ent con­sumers is at­ten­tive and per­son­al­ized ser­vice, good ex­ist­ing per­sonal re­la­tion­ship, high-qual­ity list­ings in their price range, lat­est knowl­edge of new list­ings in the area, good rep­u­ta­tion for sales and lo­cal ex­per­tise”, points out the re­port.

Who are the smartest buy­ers? “The In­di­ans are the most dis­cern­ing buy­ers in the world”, says Philip White, Pres­i­dent & Chief Ex­ec­u­tive Of­fi­cer Sotheby’s In­ter­na­tional Realty Af­fil­i­ates LLC- “Real es­tate is a highly de­sired as­set all over the world. But In­di­ans pre­serve and pro­tect their cap­i­tal like no one else. Oth­ers do not cal­cu­late the yield, the price ap­pre­ci­a­tion quite to the de­gree the way In­di­ans do. Oth­ers may as­sign more value to en­joy­ment or sta­tus but In­di­ans re­gard real es­tate as the most im­por­tant in­vest­ment.”

Talk­ing about mar­kets of in­ter­est to the af­flu­ent global In­dian, White feels that In­di­ans have a strong in­ter­est in UK be­cause of “shared past and val­ues” fol­lowed by Dubai.

The last few years may have been punc­tu­ated by global slow­down, Brexit, grow­ing in­ter­est rates, mar­ket volatil­ity but White says “there were no cat­a­strophic events and we ben­e­fit­ted from the nearly sta­ble eco­nomic en­vi­ron­ment glob­ally dur­ing 2017.”

The lux­ury buyer was un­de­terred and they clinched some hand­some deals es­pe­cially at Dubai and Syd­ney. But the plum trans­ac­tion was worth US$700 mil­lion in the state of Rhode Is­land, Texas at aprop­erty called Wag­goner Ranch.

MINT/FILE

Younger con­sumers seek far more in­ter­ac­tion with their favourite lux­ury brands as com­pared to the older gen­er­a­tion

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