Luxury Institute News

February 27, 2014

Handset Makers Go Big on Smartphones

By Brian X. Chen
New York Times
February 26, 2014

BARCELONA, Spain — Smartphones are going against one of the long-held rules in portable electronics, that smaller is better.

Year by year, computers, storage devices and music players have shed size and weight. And for decades, it has been happening with cellphones, too.

But now cellphones, and smartphones in particular, are going the way of the television: They just keep getting bigger and bigger. And people keep buying them.

The trend became even more apparent this week, as handset makers introduced a number of big-screen smartphones — from five diagonal inches to more than seven inches — at the Mobile World Congress trade show in Barcelona, Spain.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://www.nytimes.com/2014/02/27/technology/handset-makers-go-big-on-smartphones.html?hpw&rref=fashion

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.”

September 23, 2013

Small Business Learns To Build Customer Loyalty Like Luxury Brands

Luxury Institute founder applies lessons learned in high-end retail to small and medium sized businesses.

(NEW YORK) September 23, 2013 – There are more than 27 million small businesses in the United States, according to the Small Business Administration, but 50% of them will fail within five years. While lack of capital is a major factor, also significant is the lack of a customer-centric culture.

“Many entrepreneurs launch businesses with a great product or service idea, and then proceed to focus on daily transactions rather than building long-term customer relationships,” says Milton Pedraza, CEO of the Customer Culture Institute. “Focusing on transactions over relationships does not breed customer loyalty.”

Successful smaller companies, says Pedraza, are organized at an early stage to deliver extraordinary experiences to every customer on a daily basis. The problem for most small businesses is a lack of expertise and a proven process.

To provide these companies with access to state-of-the-art methodologies and metrics to measure and boost customer satisfaction and loyalty, the Customer Culture Institute is launching a do-it-yourself, online software platform to help small businesses to create their own customer culture. Pedraza, who is also CEO of the highly-respected New York-based Luxury Institute, says the Customer Culture Navigator software enables business owners to communicate with and provide needed support and training for their employees in real-time.

Small business teams will use their creativity to custom design a cultural foundation with clear definitions of relationship values and standards. The software helps to train, measure and reinforce the culture daily, a process that has a track record of dramatically improved customer loyalty at large luxury and premium brands that Pedraza has previously coached.

“We help move companies away from a soulless transaction mentality to profitable long-term customer relationship building,” says Pedraza. “In essence, we teach them that outbehaving the competition leads to outperformance.”

One innovative approach Pedraza and his team have taken, is to use crowdfunding site Indiegogo to raise funds from investors in the project. The campaign can be viewed at http://www.indiegogo.com/projects/customer-culture-navigator/x/4837243.

“Online crowdfunding is an elegant win-win-win opportunity,” says Pedraza. “We have an opportunity to provide valuable resources to our funding contributors, while building a project that can transform small business culture and dramatically increase the success rate of small business.”

September 11, 2013

Apple Unveils Faster iPhone, and a Cheaper One, Too

By Brian X. Chen
The New York Times
September 10, 2013

That is why Apple is releasing two new iPhones this month instead of just one, including a cheaper model aimed at less wealthy countries where new Apple phones have been desired but are out of reach because of their price.

The lower-cost model, the iPhone 5C (the C for color) comes in a plastic case and has the same features as the now-discontinued iPhone 5. The fancier model, the iPhone 5S, comes in aluminum and includes a faster processor and a fingerprint sensor for security, among other features. The iPhone 5S costs $200 with a contract, and the iPhone 5C costs $100 with a contract.

But at full price without a contract, which is how many overseas carriers allow people to pay for phones, the iPhone 5C costs $550 — only $100 less than the iPhone 5S. That is far higher than the range of $300 to $400 that many analysts believed could help Apple against lower-cost competition.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://www.nytimes.com/2013/09/11/technology/apple-shows-off-2-new-iphones-one-a-lower-cost-model.html

September 10, 2013

Luxury Brands Face Hazards When Testing Lower Costs

By Brian X. Chen
September 9, 2013
The New York Times

For upscale brands, there is a fine line between “cheaper” and “cheap.” And for Apple, the premium electronics maker, the key is to avoid crossing it.

Apple on Tuesday will introduce two iPhones, including a new lower-cost model targeted at overseas countries where expensive smartphones are out of reach for many consumers.

The addition of a cheaper iPhone could help Apple sell tens of millions more phones. But it could also diminish its reputation as a premium brand.

Many luxury companies have faced this challenge before, with wildly different results. Luxury carmakers have introduced less expensive models, but many efforts have tripped up. Tiffany & Company found so much success with its cheaper “Return to Tiffany” jewelry, that it attracted too many teenagers. And Target has paired up with a variety of high-end fashion designers, often with considerable success.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://www.nytimes.com/2013/09/10/technology/guarding-a-luxury-aura.html?_r=0&pagewanted=print

July 17, 2013

Facial recognition software can create personalized retail experiences

By Jen King
Luxury Daily
July 16, 2013

A new facial recognition software could help give affluent consumers a personalized shopping service while taking the guesswork out of identifying VIP customers for retail employees.

The Facial Recognition software, developed by NEC IT Solutions, will help boutique employees better cater to their customers, even if they do not recognize them at first glance. On the brand side, it will also help ensure that retailers never miss out on a potentially lucrative sale.

“A luxury retailer would include a wall mount display or kiosk that would allow customers to preregister themselves, and opt-in either at time of purchase or online,” said Allan Ganz, account development manager for NEC Corporation of America, Irving, TX.

“The kiosk would have two potential locations,” he said. “The first at the sales counter and second at the service counter for instance at alterations. The key is to allow for an enhanced customer experience.

“Face recognition allows for the storage and real-time analysis of this vast amount of data to gauge and modify the effectiveness of brand promotions.”

Face time
NEC IT Solutions has created similar software with security, rather than retail, in mind.

Similar to the software that helps to identify criminals and terrorists, the facial recognition software is checked against an opt-in database of shoppers.

The software will scan customer’ faces as they enter the boutique. If the software recognizes a face in the database, an alert will be sent to the employees via computer, tablet or smartphone.

Once alerted of the shopper, the boutique employees will be able to access the customer’s clothing sizes, favorites and spending history.

NEC IT Solutions has been conducting software trials in designer boutiques and hotels in the United States, England and Asia. The company has not disclosed the retailers and hotels used in the trial.

Although privacy is a big concern of affluent consumers, NEC IT Solutions found that many high-profile customers did not mind sharing their private information if it meant a more personalized and quicker shopping experience as per NEC IT Solutions.

“I can see an issue with privacy being a concern for most shoppers,” said Brittany Mills, vice president of client solutions at B Culture Media, Atlanta.

“Even though NEC IT Solutions addressed the privacy concern, I am not sure that most shoppers would want to be identified before a purchase.

“If a customer is a frequent shopper, the store associates should already have a relationship with the shoppers and can determine the amount of attention to give,” she said.

To track or not to track
Although many affluent shoppers are looking for an easier, more personal shopping experience there is some degree of hesitation in providing their personal information to luxury retailers.

For instance, sixty-three percent of affluent consumers would choose to keep their online history and Internet activities private through an opt-out tracking policy, according to a survey from the Luxury Institute.

Affluent consumers do not want their personal information used for other purposes and many consumers do not trust the safety of their information when giving it to a brand. This means that luxury marketers need to earn the trust of their consumers before asking for their participation in online tracking.

Other mobile tracking technologies have been used to draw consumers into stores.

For instance, luxury retailers can benefit from using geo-targeting mobile technologies to keep affluent consumers coming into their stores and not their competitors’ locations.

Retailers can use geo-targeting in a variety of ways, which include targeting consumers in a store, outside a store or in specific neighborhoods. By using these technologies along with consumer data and research, retailers can access their target consumers and drive them into store locations.

Facial recognition is not the only way to identify affluent consumers.

“A more discrete and practical way of identifying these affluent shoppers is with an NFC signal from a personal device that can transmit their presence as well as personal shopping preferences,” said Dave Rodgerson, senior management consultant of retail strategy and change at IBM Canada, Toronto.

“Companies like iSign Media in Toronto are making great strides in this area,” he said.

http://www.luxurydaily.com/facial-recognition-software-will-help-retailers-create-personalized-shopping-experience/