Spending on experiences not luxury goods is the mainstay of consumer buying behaviour
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.
Younger consumers seek far more interaction with their favourite luxury brands as compared to the older generation