What: Luxury brands are focusing on attracting ultra-high-net-worth individuals (UHNWIs) who spend significantly on high-end goods and unique experiences.

Why it is important: UHNWIs, representing a small fraction of luxury shoppers, account for a substantial portion of spending, making them crucial for luxury brands aiming to secure loyal, high-spending customers.

Luxury brands are increasingly targeting ultra-high-net-worth individuals (UHNWIs), who have shown a strong propensity to spend on luxury goods and experiences despite challenging economic conditions. According to the "Luxury Insights" monitor by Global Blue and Agility Research, UHNWIs spent an average of 137,000 euros per person between September 2023 and August 2024. This demographic, though representing only 0.1% of tax-free shoppers, accounts for 13% of tax-free shopping expenditure.

The study highlights that spending by UHNWIs on luxury goods and experiences has grown by 26% compared to 2019. Notably, the wealthiest individuals in the U.S., India, and the Gulf Cooperation Council have significantly increased their expenditures. India, in particular, is emerging as a new powerhouse in luxury spending, with a six-fold increase in tax-free spending compared to 2019.

UHNWIs are drawn to destinations like Singapore, Osaka, Tokyo, France, and Italy for luxury shopping. Japan is gaining prominence due to its weak yen and proximity to Chinese consumers who prefer spending abroad due to luxury-shaming in their home country.

Luxury brands are encouraged to identify these valuable customers and provide exceptional retail experiences to maintain loyalty. UHNWIs typically engage with nine brands, spending the most on watches and jewellery. However, only a few brands have successfully added these individuals to their very important clients (VIC) lists.

The potential for growth in this market segment is significant as UHNWIs seek exclusive experiences that go beyond mere transactions. Brands that can offer unique events and personalized services stand to benefit from this affluent clientele.

Luxury brands target ultra-high-net-worth consumers with exclusive experiences