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Overview of changing demographics and behaviors of the affluent around the globe.
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“Wh h ll th“Where has all the money gone,long time passing…”
VersaillesFebruary, 2012February, 2012
Christopher P RameyChristopher P. RameyPresident, Affluent Insights
561.876.8077 [email protected]
h ffl d ll lWe serve the affluent and sell luxurybecause that’s where the money is.
2010 & 2011 were very good years for personal luxuryvery good years for personal luxury
2004 136 €B2005 1472006 1592007 1702008 1672009 1532009 1532010 1732011 1912011 191
Bain & Company for Altagamma
Survivor: Versailles IslandSurvivor: Versailles Island
How many affluent individuals are there in the world?the world?
1 ~ 10 900 0001. ~ 10,900,0002. ~ 16,500,0003 18 500 0003. ~ 18,500,000
Capgemini Merrill Lynch World Wealth Report 2011
Survivor: Versailles IslandSurvivor: Versailles Island
What percent of the world’s affluent live in Brazil?live in Brazil?
1 ~ 0 5%1. ~ 0.5%2. ~ 1.4%3 4 3%3. ~ 4.3%
Capgemini Merrill Lynch World Wealth Report 2011
What percent of the world’s affluent live in the United States?live in the United States?
1 ~ 31%1. ~ 31%2. ~ 43%3 51%3. ~ 51%
Capgemini Merrill Lynch World Wealth Report 2011
# of HNWIs (in thousands)
HNWI Growth % 2009 - 2010
USA 3 104 8 3%USA 3,104 8.3%Japan 1,739 5.4%German 924 7.2%China 535 12.0%UK 454 1.4%France 396 3.4%France 396 3.4%Canada 282 12.3%Switzerland 243 9.7%A t li 193 11 1%Australia 193 11.1%Italy 170 -4.7%Brazil 155 5.9%India 153 20.8%
Capgemini Merrill Lynch World Wealth Report 2011
USA 21%Japan 16%Italy 8%Owners of Italy 8%Germany 7%UK 7%France 6%
Owners of wealth above USD 100,000 France 6%
China 6%Spain 3%
,by country of
residenceCanada 3%Australia 3%Brazil 2%Brazil 2%Taiwan 1%Korea 1%
h l d
Credit Suisse
Netherlands 1%ROW 13%
L i A iLatin America Ultra High Net Worth Measured by Population
Brazil 4,725Mexico 2,900A ti 1 050Argentina 1,050Columbia 900Peru 775Chile 750Venezuela 500Guatemala 310Guatemala 310Ecuador 310Dominican Republic 225
Wealth-X
Conspicuous Consumption ContinuumConspicuous Consumption Continuum
Old money New money
Conspicuous
Non- Conspicuous
The Least Established Segments Spend the Most on Luxury by Population
Aspirational Mass Market
Rising Middle Class New Money Old Money Beyond
MoneySegment sizeSegment size in 6* major
markets115 m HH 25 m HH 6 m HH 1 m HH .6 m HH
Luxury SpendingSpending
2010 (€ billions)
45-50 35-40 55-60 10 5-10
Boston Consulting Group
*Traditional categories; Brazil, China, Europe, Japan, Russia, United States
Newcomers by 2025 Dropouts by 2025Bangkok Athens
The World
Bangkok AthensBeijing BarcelonaChengdu Denver
The World Moves West
Chonguing DetroitDelhi HamburgDoha Lille
World’s Top 50 cities, ranked by GDP -
Foshan MelbourneGuangzhou Minneapolis-St. PaulHangzhou Munichby GDP
changes by 2025
Hangzhou MunichMumbai NagoyaNanjing OsloShenyang Rhein-MainShenzhen Rio de JaneiroTianjin Stuttgart
McKinsey
Tianjin StuttgartWuhan TapeiXi'an Vienna
Th Gl b l M k f L i Cl €1 T illi *The Global Market for Luxury is Close to €1 Trillion*
Travel and hotels 270Luxury cars 250Watches and jewelry 100Technology 100Technology 100Fashion and clothing 50Leather goods & accessories 50accessories 50Alcohol and food 50Furniture and décor 40Cosmetics and fragrances 30Other (for example, spas and clubs) 20
Boston Consulting Group analysis from Ipsos Research
*Global estimates were based on an extrapolation of data from 7 countries that represent 75% of the global market for luxury.
Americans put less value on luxury
Europe 37%
European markets constitute 37% of luxury goods demand
Europe 37%Americas 30%Japan 11%Greater China 11%Other Asia 6%ROW 5%ROW 5%
* Luxury market as defined by Altagamma: women's wear + menswear + leather goods + shoes +
Bernstein Analysis – Altagamma; Luxury market as defined by Altagamma
* Luxury market as defined by Altagamma: women s wear + menswear + leather goods + shoes + watches & jewelry + perfume & cosmetics 2010e
Americans put less value on luxuryAspirational Accessible
Elitist Luxury LuxuryAmericas 3% 16% 80%Europe 12% 41% 46%pJapan 15% 37% 48%Asia Ex-Japan 14% 56% 30%pROW 11% 83% 6%Brands by category Hermes LV Burberry
BV Fendi CoachBV Fendi CoachChanel Gucci Ralph Lauren
Prada Tommy Hilfiger
Altagamma, Haver, Bernstein Analysis
Ferragamo Calvin Klein
In the wake of a crisis, luxury and status , ymatter less to the affluent.
Personal values have been recalibrated.
Understanding why luxury consumers shop online is crucial
Avoid sales-assistants 46%O li b i h t 23%Online bargain hunter 23%Time pressed 16%
Altagamma – Based on luxury consumer panel
Survivor: Versailles IslandSurvivor: Versailles Island
What percent of America’s affluent come from a middle class background?from a middle-class background?
1. ~38%2. ~52%2. 52%3. ~80%
Harrison Group
80% raised in a middle-class or less environment
Have been affluent for less than 20 years~61% still on the front lines of business70% of their children attended public school
Harrison Group
h f kShifts in Marketing
2000 2012Needing stuffNewS lf
Demanding experiencesNew and NowC itSelf
MassConformity
CommunityTribesCustomizationConformity
AwarenessCustomizationNeurological connectivity
Robin Lewis & Michael Dart “New Rules of Retail “ 2011
The evolution of defining yourself
You are what you eatYou are what you buy
You are what you value
Political Affiliation by gender & net worth
Males Females$800K -$1.49M
$1.5 -$5.9M $6.0M +
Democrat 23% 39% 32% 31% 19%
Republican 47% 34% 37% 44% 50%Republican 47% 34% 37% 44% 50%
Other 30% 27% 30% 25% 31%
American Affluence Research Center
Spending by Age of Head of Household
$50K
$40K
$30K
$20K$20K
$10K
$ 0K
< 25 25-34 35-44 45-54 55-64 65 +
Henry Dent “The Roaring 2000 Investor”
Age Breakdown of HNWI Population - 2010, by Region
HNWI tHNWI percent under 55
Asia Pacific ex-Japan 69%Middle East 56%Europe 45%Europe 45%Latin America 45%North America 32%
Capgemini Merrill Lynch World Wealth Report 2011
China
Where has all the money gone?
ChinaFaster growing larger economy, younger, new money
Middle East, India and BrazilYoung, new money
USA and JapanOlder mature market slow growthOlder mature market, slow growthUSA doesn’t value luxuryFinancial crisis may affect USA
EuropeValue luxury, must resolve financial crisis, slow growth
Survivor: Versailles IslandSurvivor: Versailles Island
The Middle East has the least number of affluentThe Middle-East has the least number of affluent women as a % of total. Latin America is next worse: tied with who?worse: tied with who?
1. United States2
37%31%2. Japan
3. Asia-Pacific (ex. Japan)4 Europe
31%24%18%4. Europe
5. Latin America
6 Middle East
18%18%14%6. Middle East 14%
Capgemini Merrill Lynch World Wealth Report 2011
Thank you
Chris Ramey561 876 [email protected]
Christopher P. RameyCPRCPRamey
www.FloridaLuxuryCouncil.comwww.AffluentInsights.com
This presentation is the property of Affluent Insights and Chris Ramey. Any unauthorized copying, disclosure, use or d b l h b d h h fdistribution is strictly prohibited without the express written consent of Mr. Ramey.
Chris Ramey is America's foremost authority on marketing and selling to the affluent.
Consulting services – Ramey’s personal clients range from hotels, retailersand manufacturers to professional sports organizations and doctors. Heconsults with unique insights reflected by the breadth of his clientsconsults with unique insights reflected by the breadth of his clients.Regardless of the category, Ramey can help you increase your sales toluxury customers and affluent consumers.
Keynotes & seminars – Ramey is a professional speaker and member ofNational Speakers Association. His presentations are entertaining,educational and motivating, and he is routinely the highest rated speakerg, y g pat association and corporate events.
Christopher P. Ramey 561.876.8077 [email protected]