Reaching the Hard-to-Reach: Conducting Research in the Luxury Segment
Dubai often makes headline news across the world for a multitude of reasons. Whether it’s in relation to being home to the world’s tallest building or selling the world’s most expensive coffee, it goes without saying that Dubai, along with much of the GCC, is synonymous with luxury and affluence.
Within the Middle East, the UAE has one of the highest concentrations of high-net-worth (HNW) and ultra-high-net-worth (UHNW) individuals. This higher level of purchasing power along with favorable market conditions attracts many international luxury brands to establish their regional bases in the country.
The UAE, much like its GCC counterparts, is marked by a unique composition of luxury consumers from different cultures, nationalities and religions. Although experience undoubtedly brings knowledge, an in-depth understanding of these consumers is key to ensuring, insofar as possible, sustainable growth and success within these volatile times. This is where market research comes in.
Conducting research within the luxury segment differs enormously from conducting research in other sectors such as FMCG. For starters, most research companies are deterred by the difficulties of gaining access to this hard-to-reach clientele. Others typically struggle with developing suitable incentive systems that are able to keep participation or response rates high. Whilst the possibility of winning an iPad may appeal to say, a university student, this is unlikely to encourage someone with liquid assets amounting to over USD 5 million.
Largely due to the aforementioned reasons, few market research companies are able to successfully target this segment, especially on a local or regional level. Considering the demand and supply for luxury goods and services, this is actually quite ironic. Tapping into a still undeveloped area of market research represents an interesting opportunity, but only to those who are able to overcome obstacles of access and to understand what really matters to HNWI and UHNWIs. In its most simplified form, this relates to time and privacy.
The affluent are typically time poor. The expression “time is money” is a largely inaccurate cliché that simplifies the group’s attitude to time. The expression does however highlight the fact that time is extremely valuable, and is probably one of the most precious commodities for this time-poor group. An hour spent in an in-depth interview is an hour that could have easily been spent with family or practicing a hobby. Therefore, participating in a project must be considered worth their while and a series of incentives, typically in the form of emotional or intrinsic benefits, must be developed in order to avoid relying entirely on monetary compensation.
HNWI and UHNWIs tend to be quite private. Within countries like the UAE, Saudi Arabia, Qatar, etc. there is an additional layer of complexity with Nationals who often prefer to opt out of disclosing what they perceive to be confidential information to “outsiders”. Although operating with a high level of decorum and discretion is vital, so is gaining the trust of participants. Without trust, an open and unbiased exchange of information cannot take place.
Generally speaking, the luxury industry in the UAE and GCC is one filled with many interesting opportunities. The confluence of luxury brands and affluent consumers makes the region ripe for gaining an in-depth understanding into the motivations, preferences and experiences of consumers. Quality market research in the luxury segment can reveal valuable insight into a niche clientele, provided it is under the right conditions.