November 25, 2014
Affluent consumers
There are more ultra-high-net-worth individuals in the state of California than all of the United Kingdom, according to a new report by Wealth-X.
“Wealth-X Special Report on America’s Ultra Wealthy Population” runs through each state and its population of the world’s wealthiest individuals. By creating a break-down of the locations of each UHNW person, Wealth-X is helping luxury retailers locate the best spots for new boutiques and marketing campaigns.
The “Wealth-X Special Report on America’s Ultra Wealthy Population” showcases Wealth-X’s intelligence on the ultra-wealthy. The report gives insight into the United States' ultra wealthy population, defined as those with net assets of $30 million and above.
"The granularity allows retailers to start to think in very concrete gap analysis between existing portfolio locations, where wealth is and where their clients are and where they should be targeting," said David Friedman, president of Wealth-X, New York.
Ultra American dream
The U.S. is home to the world’s largest population of billionaires and UHNW individuals. Collectively there was an increase in these individuals, with some states seeing higher increases than others.
U.S. UHNW population breakdown
In North Dakota, for example, there was a 14.3 percent increase in the UHNW population, making the northern state the fastest growing among this sector of individuals. It’s neighboring state, South Dakota, also saw an increase in its UHNW population as some local businesses saw profitable numbers that allowed certain individuals to cross over the $30 million threshold.
Nearby states such as Wyoming and Iowa saw large population increases in this demographic as well.
Florida also witnessed a large increase with almost 500 new individuals, likely because of the strong financial and real estate markets of the state.
UHNW map
Alaska, Hawaii, New Mexico, Vermont, Wisconsin and Connecticut all saw disappointing growth. Alaska was the only state to decline in GDP this year, but Hawaii also had a bad year with no growth seen. The other states saw very small increases resulting in below average GDP.
In New York state, 91 percent of the UHNW population lives in the city of New York. In both California and New York there was an increase of 1,470 UHNW individuals this year.
Target market
Several retailers have already looked toward locations that house many UHNW individuals.
For instance, department store chain Neiman Marcus is planning to open its first Manhattan location in 2018.
Neiman Marcus Group currently manages New York retailer Bergdorf Goodman, but does not have its eponymous department store within city limits. This new addition to Neiman Marcus’ retail portfolio will introduce New York consumers to the Dallas-based retailer during a time when many retailers have planned expansions (see story).
Similarly, department store chain Bloomingdale’s is renovating its location in the Stanford Shopping Center in Palo Alto, CA, to achieve a slimmer, more efficient space.
The Palo Alto location will be the smallest full-line Bloomingdale’s in the brand’s portfolio and sets the template for future expansion. As technology continues to transform the shopping experience, many brands are finding that they can do more with less (see story).
Being aware of the location of important clients can help brands, but understanding where these individuals spend money and what they spend it on is important as well.
"For the ones who can already confirm the clustering of ultra affluent wealth, it allows them to start to think in terms of market share in that geographical region and then, more importantly, they should be thinking in terms of wallet shares, all of them don’t know how much of that person’s spending on luxury on annual basis," Mr. Friedman said.
Final Take
Nancy Buckley, editorial assistant on Luxury Daily, New York
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