Luxury Institute News

February 5, 2014

Wealthy Shoppers Tell Brands How They Want Technology Integrated Into The Shopping Experience

(NEW YORK) February 5, 2014 – The New York-based Luxury Institute asked consumers 21 years of age and older from U.S. households with minimum annual income of $250,000 about their views on incorporating technology in the shopping experience.

Nearly half (47%) of wealthy consumers say that a sales professional providing live chat or video assistance online would help them understand more product details, and 58% appreciate the convenience of instant answers.  Only 15% of shoppers say that they have tried chat or video and refuse to do it again.

Wealthy shoppers do not mind companies collecting personal data and using it for customized marketing, but they do show strong distaste for clandestine data gathering via mobile phones, facial recognition software and GPS tracking; 69% say information collected in this manner is a privacy violation.  Just 24% approve of retailers using facial recognition software to identify them and observe shopping habits.

Using technology in-stores to accelerate checkout is popular, but many affluent shoppers shy away from self-checkout.  Almost three-fourths (73%) say that they appreciate the time savings of checking out via mobile devices instead of standing in line at cash registers.  Although 45% say that self-checkout is more efficient, 44% prefer transactions with help from staff.

Technology has little to do with what wealthy shoppers desire most: free shipping and returns, cited by 92% of respondents.

“Habits of today’s wealthy consumer have increased the desire to browse, reserve and purchase using a mix of channels,” says Luxury Institute CEO Milton Pedraza. “Technology allows brands to leverage customer data and shopping habits, however salespeople still play a vital role into creating unique and engaging experiences.”

May 9, 2013

High-Income Shoppers Embrace Online Commerce, but Stores Also Benefit From Web Browsing

NEW YORK, NY–(Marketwired – May 9, 2013) – The Luxury Institute surveyed wealthy consumers earning at least $150,000 a year about their usage of the Internet and mobile devices, and how these technologies affect their interaction with brands across platforms.

High-earners are about as likely to have bought something at a store (78%) in the past 12 months or ordered it online via computer (77%). Despite the growing popularity of mobile and tablet shopping, research done on a traditional computer still feeds foot traffic into brick-and-mortar stores, and led to in-store purchases among 45% of the consumers surveyed. Only 25% of wealthy shoppers buy online after checking out merchandise and gaining insights at a store.

Using a tablet’s Web browser has officially entered the mainstream as another shopping channel. In the past year, 20% of wealthy consumers reported using these devices to make a purchase. Web-enabled tablet usage is more popular for transactions than catalog purchases (17%), telephone orders (15%), or buying via smart phone Web access (14%). Retailers still send out catalogs because they’re effective drivers of sales in other channels: 20% were motivated by a catalog to make an in-store purchase; 16% of respondents say they bought something online in the past 12 months after seeing it in a catalog. Downloaded apps for phones (12%) and tablets (11%) are also gaining in popularity as distinct retail channels where wealthy consumers shop.

“Successful brands turn shopping and browsing into a seamless experience across traditional websites, apps for smart phones and tablets, and within brick-and-mortar stores,” says Luxury Institute CEO Milton Pedraza. “Wealthy consumers are eager users of the latest technologies and brands need to be, too.”

About Luxury Institute (www.LuxuryInstitute.com)
The Luxury Institute is the objective and independent global voice of the high net-worth consumer. The Institute conducts extensive and actionable research with wealthy consumers about their behaviors and attitudes on customer experience best practices. In addition, we work closely with top-tier luxury brands to successfully transform their organizational cultures into more profitable customer-centric enterprises. Our Luxury CRM Culture consulting process leverages our fact-based research and enables luxury brands to dramatically Outbehave as well as Outperform their competition. The Luxury Institute also operates LuxuryBoard.com, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises.

May 5, 2013

9 apps for millionaires

No need to ask Jeeves, just whip out your smartphone

By Kelli B. Grant
MarketWatch
May 4, 2013

You’re wealthy and you don’t want to wait out a flight delay? There’s an app for that. BlackJet lets members book a seat on a private jet via their smartphone. Although the app is free, the service sets travelers back $2,500 for an annual membership, plus the cost of the flight; roughly $3,500 for a one-way jaunt from New York to San Francisco.

Sure, it’s not likely to appeal to everyone (read: most anyone), but apps for the 1% have become a hot market. According to a 2012 survey from marketing firm Luxury Institute, 64% of wealthy consumers view luxury brands more favorably if they have their own app. (Most are just window-shopping: Only about 13% of the affluent have purchased a luxury product or service via their phone.) “The best luxury apps come from branded applications,” says Brad Spirrison, the managing editor for review site Appolicious. It’s common to find fashion houses’ look books, high-end hotels’ recommendations for local amenities and other value-added features that any fan might use. But some, like BlackJet and these eight, are really made for rich customers.

Click the link to read the entire article:
http://www.marketwatch.com/story/9-apps-for-the-super-rich-2013-05-02

March 11, 2013

Wealthy Shoppers Careful About Surrendering Personal Data; Awareness of dangers drives caution

(NEW YORK) March 11, 2013 – The independent and objective New York-based Luxury Institute surveyed U.S. consumers with minimum household income of $150,000 about their attitudes on privacy and their experiences with companies collecting and handling their personal data.

The majority of wealthy shoppers (68%) are inclined to divulge personal data to merchants online, although 75% report this is due to requirements for completing their transaction. Only 24% indicate sharing their contact information during a recent in-store experience, with women feeling more pressure by brands to provide personal details during purchasing experiences. Email is the type of personal data consumers feel most comfortable sharing both in-store (66%) and online (78%). In addition, 46% of customers say that knowing an individual salesperson makes them more likely to divulge contact details while shopping in-store.

Wealthy customers show a penchant for being left alone: 82% have placed their phone numbers on do-not-call lists, and 63% say they would do the same if there were a similar online registry for blocking the tracking of their Web activities. Half of consumers have already fully disabled or edited tracking on their browsers.

Almost 60% of wealthy shoppers feel little or no control over their personal data once a company has it, and 30% say that the security of their data is extremely likely to be compromised.

“Luxury firms must optimize respecting privacy while earning trust in order to collect valuable customer data and use it to create value for customers,” says Luxury Institute CEO Milton Pedraza. “Should privacy legislation be enacted, the brands that will be superbly successful will be those that have built genuine, trusted, long-term human relationships with their customers.”

About Luxury Institute (www.LuxuryInstitute.com)
The Luxury Institute is the objective and independent global voice of the high net-worth consumer. The Institute conducts extensive and actionable research with wealthy consumers about their behaviors and attitudes on customer experience best practices. In addition, we work closely with top-tier luxury brands to successfully transform their organizational cultures into more profitable customer-centric enterprises. Our Luxury CRM Culture consulting process leverages our fact-based research and enables luxury brands to dramatically Outbehave as well as Outperform their competition. The Luxury Institute also operates LuxuryBoard.com, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises.

February 18, 2013

Consignment site helps ‘snobs’ swap high-end goods

By Abha Bhattarai
Washington Post
February 15, 2013

The search for a used Chanel bag led Elise Whang out of her job as an attorney and into a new career as co-founder of Snob Swap, a Web site that allows users to buy, sell and swap pre-owned designer goods.

Whang was pregnant with her second child when she had the idea for an online consignment shop. She decided to quit her job at the Federal Trade Commission to start Snob Swap with her sister.

“I got a little tired of chasing the mythical work-life balance,” said Whang, 37. “I just thought, it’s time for a change. I was tired of that flea-market feel of consignment sites. And I was also tired of half the stuff in my closet.”

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute:
http://www.washingtonpost.com/business/capitalbusiness/consignment-site-helps-snobs-swap-high-end-goods/2013/02/15/c2d429c4-749f-11e2-aa12-e6cf1d31106b_story.html

September 22, 2012

Consumers’ Expectations High for Luxury Brands on Mobile

The highest percentage of high-end consumers expect luxury apps to include a loyalty program

eMarketer
September 21, 2012

Luxury brands have been slow to the mobile party, with marketers steering clients toward traditional brick-and-mortar locations where products could be displayed in elegant surroundings and customers were treated to an impeccable shopping experience. But luxury brands are making up for lost time, according to a new eMarketer report, “Luxury Marketing: Recreating the One-on-One Experience with Mobile.”

Click the link to read the entire article: http://www.emarketer.com/Article.aspx?R=1009366&ecid=a6506033675d47f881651943c21c5ed4

September 18, 2012

Luxury Institute CEO on Why You Must Empower, Educate & Mobilize Sales Forces

By Kelly Hushon
The eTail Blog
September 17, 2012

Milton Pedraza, CEO at The Luxury Institute, says we should be providing just as much information to the sales professional as we do to the customer. Makes sense. Somehow many retailers still aren’t doing that.

At a presentation he gave at eTail Europe this past June, Pedraza used Apple as an example. The company empowered its sales force by arming them with mobile devices that allowed them to interact with customers more efficiently and personally. But that’s just the beginning.

When retail stores are less full, Pedraza says there is a great opportunity for sales professionals to work on relationship building with their customers, and they can do so if they are given mobile devices with minimal functionality that allows them to reach out to the clientele they already have through email and other forms of mobile communication. Sales professionals can reach out to customers and nurture relationships in a way that scientific algorithms and data mining can’t compete with because, quite simply, they’re not as good as human beings.

It might seem radical – you might be thinking, “So you’re asking me to give my sales person in my store a mobile device and let them openly and directly email customers? NO WAY!”

According to Pedraza, it doesn’t have to be so scary. The two keys to doing this successfully are:

1. Hire the right people. Hire people who share your customer centric values. If they are selfish, they should work elsewhere.
2. Educate, educate, educate. And add to that Empower; use incentives that will empower them to build relationships with their customer base.

So why haven’t more retail operations done this already? Pedraza says it’s because it’s easier to create a technology app than it is to face the idea of finding the absolute best people, training them and paying them properly. He’s convinced though, that if we do this, it will pay off.

Customers who have admitted having a good relationship with a company and/or its sales force have been proven to spend more wallet share with said company.

Click on the link below to view the brief video of Luxury Institute CEO, Milton Pedraza, and hear more about why this idea works – and why, if you’re not already – you should be doing it:
http://www.theetailblog.com/featured/ceo-the-luxury-institute-on-why-you-must-empower-educate-mobilize-sales-forces-now/

September 11, 2012

Wealthy Shoppers Rank Experiences At Online-Only Luxury Retail Sites Ahead Of Traditional Brands; Barneys is best among brick-and-mortar but MR PORTER, SSense prove more pleasing

(NEW YORK) September 11, 2012 – Wealthy shoppers with minimum annual income of $150,000 rate the online experience at websites of 10 traditional luxury retailers and 16 online-only retailers in the 2012 Luxury Online Experience Index (LOEI) survey by the independent and objective New York-based Luxury Institute. LOEI scores include evaluations of a site’s navigation, visual appeal, selection of products, ability to deliver product feature information, ease of purchase, availability of human help and trustworthiness to keep personal data.

It appears that upstarts have made quick inroads. One-year old men’s luxury site, MR PORTER, earns the highest score (86) of all retailers, online and traditional, followed by fashion site SSense (85) and My-Wardrobe and Shopbop (both 84). NET-A-PORTER and Zappos Couture earn scores of 83 and 82, respectively.

Barneys New York earns the highest LOEI score (84) among luxury retailers that also operate physical stores, followed by Neiman Marcus, Saks Fifth Avenue, Intermix and Scoop all with 82.

Nordstrom is the brand most likely to be recommended (92%) and the site that most wealthy shoppers plan to return to for their next online shopping experience. Among online-only sites, Zappos is the most recommended (88%) and eBay Fashion Vault (95%) enjoys the highest rate of return visits.

“Online luxury retail proves that smaller and newer brands can shake up incumbents with the right technology, product mix and site design,” says Luxury Institute CEO Milton Pedraza. “The proliferation of web and mobile shopping truly creates opportunity.”

Respondents reported average income of $310,000 and average net worth of $3.6 million.

About the Luxury Institute (www.LuxuryInstitute.com)
The Luxury Institute is the objective and independent global voice of the high net-worth consumer. The Institute conducts extensive and actionable research with wealthy consumers about their behaviors and attitudes on customer experience best practices. In addition, we work closely with top-tier luxury brands to successfully transform their organizational cultures into more profitable customer-centric enterprises. Our Luxury CRM Culture consulting process leverages our fact-based research and enables luxury brands to dramatically Outbehave as well as Outperform their competition. The Luxury Institute also operates LuxuryBoard.com, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises.

September 8, 2012

Internet finance: How to kick-start your bright idea

By Claire Adler
Financial Times
September 7th, 2012

A watch brand has emerged as the king of crowdfunding, a trend that allows creative people to connect online with the public for cash to fund their business ideas.

In April, after numerous rejections from venture capitalists and rapidly running out of cash, five 20-something men from Silicon Valley turned to Kickstarter, a site that allows creative companies, including many filmmakers and musicians, to raise money from individuals online.

The site does not charge to set up a campaign. But, if it is successful, the site takes 5 per cent of the final amount. Amazon, which processes the payments, takes 3 to 5 per cent.

Click the link to read the entire article which includes quotes from Milton Pedraza, CEO of Luxury Institute: http://www.ft.com/cms/s/0/51da221e-f1c3-11e1-bda3-00144feabdc0.html#ixzz26Cbscu00

September 5, 2012

Get Ready for the Loyalty Marketing Renaissance of 2013

Six New Ways to Serve Loyal Consumers in a Smartphone Age
By: Adam Broitman
AdAge.com
September 04, 2012

The essence of loyalty marketing has not changed since its invention; incentivize your best customers and they will not only remain patrons, they will tell their friends about their experiences with your brand. The rise of social technologies has multiplied the positive effects of a brand supporter and underscores the importance of influential evangelists.

Though the substance of loyalty has not changed in the past 30 years, the tactics and technologies required to implement a loyalty program have been displaced — so much so that history may designate the years between 2012 through 2015 as a renaissance in customer loyalty. Here are a few guidelines to use when planning your customer loyalty programs for 2013:

Don’t Just Be Social, Be Helpful
According to a survey by American Express one in five American’s have used social media for customer service. Furthermore, customers, on average, are willing to spend 21% more with companies that provide great service. Given that social media is an ideal channel to directly interact with your customers, a strategic approach is imperative. The mere presence on popular social networks is no longer enough. Simple, canned responses to comments on social networks no longer meet consumer expectations. It is crucial for social media to be treated as a service channel in addition to a promotional channel. The installation of an uninformed employee, armed with no more than a hyperlink to a customer service page is only slightly better than ignoring comments made within social networks.

Forget Gamification, Learn The Game
The Gamification gold rush has led many brands to the construction of superfluous “cart before the horse” initiatives in which badges and leaderboards serve little to no strategic purpose. There are countless theories that marketers can borrow from games, but in order to accurately take advantage of such ideas in an effective manner, marketers must dig deeper and strive to realize the various compulsion loops and social dynamics that make games “sticky” (apologies for the late 90′s lingo). Here are a few links for inspiration:

  • http://www.mud.co.uk/richard/hcds.htm
  • http://www.mud.co.uk/richard/Shoreditch.pdf

Feel The Power of Post-PC
The post-PC era has put massive computing power, packed in every shape and size screen, in the palm of the everyday consumer. If your legacy POS system is getting in the way of allowing you to implement a cutting edge loyalty program, consider taking advantage of consumer grade products to get the job done.

Take a look at the following payments systems that have integrated elements of loyalty into their platform:

  • Square
  • SAIL (Verifone)
  • PayPal Here
  • NCR Silver
  • Revel Systems

Learn to Outsmart “Showrooming”
“Showrooming” has become a plague for retailers. According to eMarketer, 59% of US smartphone owners have engaged in “showrooming”. Ironically, the very same mobile device that consumers are using to “showroom” can be used to create value. Marketers should look at the way in which luxury brands create value. Luxury marketers are notorious for creating value adding experiences in lieu of price breaks—as such, mobile has become a no-brainer for luxury marketers. According to the Luxury Institute, luxury shoppers expect the following from mobile applications:

  • 46% expect loyalty programs
  • 45% expect early access to sales
  • 53% want access to a sales professional that can help with finding the right product

Remember That Likes Don’t Equal Loves
These days, it is all too easy to create a “like-gated” promotion yet many of the programs that ask for personal information in exchange for entrance into a contest fall flat when it comes to any type of long term engagement. In the endless debate about the value of a “like,” many marketers have concluded that a like is only as good as the communications that follow it. Loyalty can certainly begin with a like, but a like is not guaranteed to get you to a “love”. According to eMarketer, nearly half of branded “likes” have no influence on consumer purchase decisions.

Make Love
Though last on this list, this is the most important thing a brand can do. We have seen brands like Zappos and Warby Parker take brand “amore” to new heights. Each brand uses social media and technology in exciting new ways, but each brand also manages to present their costumers with something marketers and advertisers speak about ad nauseam, “surprise and delight.” There are a variety of new brands such as Warby Parker that are set up as B Corporations. This corporate structure requires a company to generate some sort of “general benefit for society” as part of the way it defines profit. While long established plans will likely not reincorporate, this model has loyalty baked in and big brands should be looking at the types of ways these companies do business

As you are planning your loyalty efforts for 2013, do your best not to get so caught up in the trees that you forget to look at the forest. The seemingly endless number of mobile and social loyalty platforms can be so overwhelming, they can divert even the most savvy of marketers from their core objectives. With the above guides and a constant eye on ROI, 2013 should be a banner year for customer loyalty.

http://adage.com/article/digitalnext/ready-loyalty-marketing-renaissance-2013/236999/?utm_source=daily_email&utm_medium=newsletter&utm_campaign=adage

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