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The British-born, New York City-based Mark Ellwood knows luxury. As a contributing editor to Conde Nast Traveler, and an editor-at-large for luxury bible Robb Report, Ellwood has dedicated his career to getting into the head of the luxury consumer and knowing what trends to follow.
Ahead of his appearance at Inman Luxury Connect in October, where he will be discussing the luxury lifestyle outside of the real estate transaction, Ellwood briefly chatted with Inman about how agents can connect with the elusive luxury client, why they shouldn’t spend their money on those Balenciaga sneakers to get clients, why he hates the word “authenticity,: and how to ensure their brand can weather a recession.
Inman: What’s the best way for agents to meet luxury consumers? Is it through targeted advertising or frequenting hot spots?
Ellwood: It’s a very elusive sector now because there’s all kinds of luxury people. I think it used to be, you walk up to the King Cole Bar at the St. Regis Hotel in New York City and you knew everyone around you was a luxury consumer. Now, some of them might be staying in the hotel and some of them might be there for a quick Instagram.
I think it’s about forging relationships outside of real estate. For example, if I were trying to meet luxury clients, I would go to a local luxury clothing boutique and I would say, “Hey, how can we work together to share some customers? Hey, I’m in your world, could we throw an event together?”
You go to a restaurant and say, “I’d really like to work with you on something. You need someone else to help you identify who those people are. You’re not going to just stumble into them.”
I would go hyper-local and I would go to a very high-end boutique and say, “I want to work with you, can we talk about your customers.” They know their customers. I still think luxury is very high touch.
Separate from relationship building, another way agents attract clients is through their marketing spend. Do you have recommendations on where to meet these clients digitally or through marketing?
Because its so high touch, I think you are better off spending your money on booze for a cocktail party than an advertisement in a local circular. More than ever, it’s a high-touch business. Needlessly advertising, I think, is an old-fashioned way of thinking about marketing.
Do luxury clients expect a different experience? Do they want to be shown they are treated differently than other consumers?
The big difference is discretion. Real estate is a gloriously gossipy business. I love writing about it. Loose lips sink bricks. One of the key things is that ultimate discretion. More than even a regular person, a luxury client’s real estate agent is like a doctor. They know all the secrets. It astonishes me sometimes how blasé some agents can be.
There is a weird sect that thinks luxury real estate agents are supposed to be of the world that they’re dealing with. You are supposed to spend your last dime on a pair of Balenciaga sneakers so that your client thinks you look like them and identify with them. You are not in their world. You are working for them. That is not where to spend your money and effort. I always find that quite funny.
You’re supposed to know your market. I don’t need you to come skiing with me, I need you to know the best apartments and show me one.
What are some luxury trends and consumer habits that agents should be following and that you’re following?
I would look at how real estate, even at the ultra-premium end, is being configured to be rentable. There are more and more condo complexes – in the mid-market now but its spreading – to where, when you buy in certain buildings, one of the baked-in amenities is they will help you rent the apartment out whenever you don’t want to use it. You should keep an eye on that.
I think the impact of Chinese consumers is very telling. I think what they need and what they want – hotels at the moment are being future-proofed against a huge number of Chinese customers so that the rooms are feng shui compliant. Next time you walk into a five-star hotel room, try and find the mirror. They will not be on the wall, they will be in the closet because feng shui doesn’t like mirrors in public.
If I hear the word authenticity one more time, I will throw it against the wall. It’s the most meaningless phrase in luxury and I never understood why people think it’s a big deal. Authenticity means nothing. Nobody can define it, definitively.
Will there be consumer hesitation in the luxury market, with a recession?
In New York, the starter apartments are doing fine, but anything higher, are really really soft. That market is so soft. No agents will say it on the record, but when I have drinks with my friends in that world, they’re like, “everyone is so hesitant.”
I do think that loyalty is a big thing. We’re going to increasingly spend more money in fewer places. We’re going to have much stronger relationships with brands.
If you look at Everlane for example. I remember watching when Everlane came out. Everlane was very clever in the beginning because they were very transparent about pricing and I did a book about bargains, and I wrote about Everlane.
What Everlane also instinctively understood, was how to make people passionate about it. Everlane is the most boring, basic clothes ever. They could not be less controversial. They are the beige of clothing. But people are passionate about them, because they have cultivated their customer in a cult-y, we’re all in a gang sort of way.
The luxury brands that have focused on trying to give back a little, have parties and keep in touch with their customers. Those are going to do much better in the recession.