Pursuitist was lucky enough to catch up with Kevin Thompson, Chief Marketing Officer of Sotheby’s International Realty Affiliates, for his insights on the luxury real estate market. As an executive with a strong background in retail, including with Barney’s New York and Gucci, Thompson understands the world of luxury from a global perspective.
How do you feel the luxury consumer is changing? Is it generational or do you see shifts by country and region?
The conversation about luxury has evolved. Consumers are no longer connecting with consumption and ostentation and instead, are seeking a much more personal take on what’s most meaningful and rewarding – experiences, art, inspiration, family, and relationships. As personalization has begun its reign over the luxury mindset, the consumer journey has also experienced a shift. For our brand, it is about identifying new and authentic ways to connect with clients and ensuring that our marketing is digitally driven.
The luxury real estate market has been redefined in recent years due in large part to the impact of the new emerging luxury consumer – millennials. Millennials will make up a large part of the global economy for years to come. These individuals have a luxury sensibility and an affinity for exclusive brands, proving that luxury transcends income levels – it is about quality, uniqueness, and ultimately achieving a certain lifestyle. The younger millennials are starting to think about first-time home buying.
Because millennials were raised in a digitally driven environment, their approach to researching and selecting a home is entirely different. Millennials have an affinity with social media, and the even younger generation is almost dependent on it spending as much as 5 ½ hours a day on average connected to their phones. At Sotheby’s International Realty Affiliates, we are constantly feeding amazing digital content to our agents to help them more effectively market their properties to the changing luxury consumer.
How much is new technology such as A.I. and virtual reality affecting how Sotheby’s International Realty agents are marketing homes?
Technology is having a significant impact on the luxury real estate industry and how homes are being marketed today. We have sold homes based on consumers only taking a virtual reality home tour and never setting foot inside the home. While this is not commonplace just yet, consumers are becoming more comfortable with the idea. Millennials trust their devices to guide them. Consumers have a greater degree of trust today in that what they are seeing through digital technology is real. They are becoming more comfortable with making a home purchase without seeing the property in-person. This approach is shifting how agents are marketing properties and where they are investing their time. It’s a profound change.
How important do you think print media is for selling luxury real estate? What’s most important for reaching consumers, video, social media etc.?
Print media is still an important component for reaching consumers to help sell luxury real estate. Our recent report, “The New Affluent,” offered unique insight into the changing landscape of luxury consumers and real estate consumers and how best to reach them. When both established and emerging affluent consumers were asked to evaluate the importance of print media, they still ranked it of significant value. There was only one caveat – the content must be engaging and compelling.
Print media still matters to affluent consumers, but the shift is in the content. In general, it is about balancing communication across all channels. If your content isn’t relevant, and/or you are only choosing to use certain channels to communicate, then you can’t have an effective and well-rounded conversation with consumers. It is imperative to have a well-rounded conversation and digital communication must be part of it. Even if your marketing programs are digital first, there must still be a focus on balancing your efforts across all channels.
What home features does Sotheby’s International Realty see as most desirable? Does it vary by location?
Home features and preferences vary by location. We prefer a conversation about the exceptional. We are the oldest tastemaker in the world through our affiliation with the Sotheby’s auction house. There must be something new, different and special about the home to be a Sotheby’s International Realty listing. This is what luxury consumers have come to expect from a Sotheby’s International Realty home. Regardless of price point, the property must possess something uniquely extraordinary.
Luxury branded residences are once again becoming popular, what are some of the most interesting collaborations you have seen?
Luxury branded residences offer an appealing combination of service and quality. The Porsche Design Tower in Miami is an interesting collaboration because it features a car elevator which allows consumers to drive right into their apartment. It’s a focused feature of the apartment, and many people that drive Porsches or luxury cars believe their car is part of defining how they live their lives. To be able to bring your car into your home and have it as a fixture is remarkable. It creates an enviable level of brand loyalty for those consumers. I’m also intrigued by the Jeddah Tower, a planned 1,000-meter tower in Jeddah, Saudia Arabia. Designed by architect Adrian Smith, it will become the world’s tallest building, easily eclipsing Burj Khalifa, the 830-meter-tall Dubai skyscraper. Jeddah Tower, previously known as Kingdom Tower, will be the signature tower that welcomes pilgrims to Jeddah, the gateway to Mecca and Medina. It will also be the mixed-use centerpiece and first phase of Jeddah Economic City.
What has surprised you about this year’s luxury market?
I’m impressed by the level of individual creative expression in the luxury market. If you look at the big luxury brands and fashion houses, there are explosions of color and creativity. Consumers want to wear these works of art. It’s unlike anything I’ve ever seen before. People are less inhibited, and this has carried over into the housing market. I’m seeing more custom and creative features in homes – from a waterfall wall to a two-story wood inlay map of the New York City subway system. Luxury consumers are incorporating art into the architecture of their homes in incredibly creative ways.
What market is becoming an enclave of luxury that would surprise most people?
We are seeing luxury enclaves pop up all over the map. There’s a true consumer desire and appetite for creativity and the exceptional across all markets. There is a drive for creative expression that is becoming universal. It’s becoming less about a specific luxury market, and more about creating an extraordinary home.
You have a background in retail luxury, what shifts do you find most interesting on that front? What trends in retail real estate are also affecting the residential real estate market?
I’m seeing an explosion of creativity and a drive for unique expression unlike ever before. The speed at which luxury retailers are moving their products is faster than ever. It’s becoming more real-time. For instance, fashion seen during a runway show is immediately available for purchase. The introduction of virtual reality and augmented reality allows brands to put products and content in front of consumers faster than ever before, and that means we can get the right content in the hands of the consumer at the right moment. It speeds up the overall timeline. A customer can get comfortable buying a product, and now even a home virtually, thanks to technology.
Imagine you have the budget to buy a luxury home anywhere in the world, where would you go and why?
I would buy a secondary home in a remote riverside location or in the mountains. The luxury aspect for me would be the ability to escape and disconnect for a period. Being remote would feel like luxury to me.