Luxury Institute News

June 11, 2014

6 luxury marketing trends to watch

By: Marco Muellner
Luxury Daily
June 11, 2014

For luxury marketers, 2014 is predicted to be the year that tips the scales, with more than half of affluent shoppers discovering, actively browsing and shopping for luxury items via digital channels. This evolution is spurred by shoppers who are online to save time, yet remain likely to finish the purchase in-store.

According to an April 2013 Luxury Institute study on the multichannel purchasing habits of United States Internet users with incomes of at least $150,000, 48 percent of respondents sourced information about luxury fashion online via a computer. Yet only about a quarter actually completed the purchase online.

Also, eMarketer found that a whopping 74 percent of purchases researched on mobile devices are completed in-store.

Which brings me to the first trend to watch:

Mobile
We tend to think of mobile consumers as similar to desktop consumers, but on different devices. This is just not true.

Most mobile time, is, well, mobile. Digital marketers have always struggled to predictably drive offline traffic to retail, but data suggests this is changing.

With more than 70 percent of daily Facebook and Twitter users on a mobile device, digital marketers must think mobile-first.

For luxury marketers this is particularly challenging as device constraints and consumer expectations limit the richness of the experience.

But with skill and creativity, many luxury marketers are embracing the constraints without compromising brand promise.

Understanding the purchase intent journey
We have been trying to figure out what makes people buy as long as we have been selling, but it is a fragmented challenge and capturing the data at every step has been impossible.

We have made a lot of progress thanks to companies such as Datalogix and others and, as a result, luxury marketers are on the verge of the next evolution, having almost completely wired the journey.

The key, like most things in our modern world, is the smartphone.

In this next phase of digital marketing, understanding how and why consumers buy will be essential to attracting the next generation of affluent shoppers.

Click the link to read the entire article: http://www.luxurydaily.com/6-luxury-marketing-trends-to-watch/

May 22, 2014

Choose Your Luxury

One size doesn’t fit all. Today, true luxury in incentive programs is all about customization.

By: Andrea Doyle
Incentive Magazine
May 22, 2014

“Luxury continues to grow,” says Milton Pedraza, CEO of the Luxury Institute, a New York-based independent and objective luxury research company and boutique consulting firm. “It’s growing at a rate of about 10 percent in the U.S. Plus, the luxury market will continue to grow as more people become affluent.” Pedraza references a recent prediction made by Bill Gates who surmises that, by 2035 there will be almost no poor countries left in the world.

Luxury means different things to different people. Pedraza defines it as, “the best of design, the best of quality, the best of craftsmanship, and the best of service. In other words, it’s the best of whatever is being offered in any category.”

Luxury and premium-level brands are natural motivators, he adds. “When a company wants to show its employees they are valued there is nothing that works better than a first-class travel reward or top-of-the-line products. When someone does something special, the reward ought to be special. You want that person to feel incentivized, empowered, and inspired to go on and achieve the next target, goal, or objective. You must reward the best with the best.”

Although luxury goods and travel took a hit in 2009 when the AIG fiasco erupted, that is no longer the case. “The luxury goods market has grown significantly and will continue to grow. The stigma attached to it by some in 2009 is gone,” explains Pedraza.

When a group has the opportunity to personalize a luxury product, it adds to its uniqueness and exclusivity, creating the feeling that you’re having an extraordinary experience, and eliciting the emotion of feeling special.

Customized experiences created for a certain destination or activity have added impact. Gateway Canyons Resort & Spa, edging the Colorado/Utah border and billed as the world’s first and only discovery resort, offers an option for custom cowboy boot or hat fittings during horseback rides, or dinners at Red Cliff Camp. “We have Native American artists who offer beading classes where the spouses have taken home the jewelry that they made,” explains Erik Dombroski the director of sales and marketing. “We also offer a program where a photographer will document a group’s entire event, then edit it, and present a photo montage on the last night of their stay. Companies will then send a customized memory stick or digital picture frame to their attendees with the photos to remember their trip.” Gateway Canyons, created by Discovery Channel founder John Hendricks, features 58 guest rooms and suites, 14 Palisade Casitas and more than 12,000 square feet of event space.

See the entire article: http://www.incentivemag.com/Corporate-Gifts/Apparel-Sporting-Goods/Articles/Choose-Your-Luxury/

May 2, 2014

Luxury Institute Examines Luxe Rebound

By: Karyn Monget
Women’s Wear Daily
May 2, 2014

There are few generational divides when it concerns spending decisions and luxury goods, a report released Wednesday by The Luxury Institute revealed.

Click on the link to read the entire article(subscription required):
http://www.wwd.com/business-news/forecasts-analysis/luxury-institute-examines-luxe-rebound-7664671?module=Retail-latest

April 30, 2014

High-Income Shoppers Reveal How, Where And Why They Like To Buy Luxury Goods

(NEW YORK) April 30, 2014 – The independent and objective New York-based Luxury Institute has released the second of three multigenerational studies of U.S. consumers, 21 and older, with minimum annual household income of $150,000 per year. Respondents shared details about their most recent luxury shopping experiences, providing valuable insight into shopping behaviors unique to each generation.The age bracket for the Millennial generation ranges from 21 to 34, Generation X includes 35 to 49 year olds, and the Baby Boomer generation starts at 50.

The popularity of online purchases, even for luxury products and services, has risen dramatically. Right now it’s an even split between clicks and bricks: 43.5% of consumers surveyed saying that their last purchase was made online, and an equally-sized 43.5% also said they last bought a luxury item in a store.

Unlike the popularity of the online channel overall, growth of mobile shopping in the luxury industry remains slow. The vast majority of recent online luxury purchases were completed on a computer, and only 2% made via smartphone. Affluent Millennials have been quicker to embrace on-the-go mobile luxury shopping.

The various sources of influences consulted prior to a purchase show the biggest generational differences. They all gather information from brand websites, online consumer reviews, friends and family and sales associates, but Baby Boomers are far less likely to be swayed by advertising than younger shoppers.

Millennials prefer to conduct research in-store before purchasing online, and they are also open to receiving emails or text messages from luxury brands, or even individual salespeople. The 21 to 34 year olds are also the group most likely to engage with companies on digital platforms like social media and mobile applications.

“Luxury brands are still trying to understand how to capture the loyalty of affluent Millennials, because that really means cultivating the next generation of consumers and keeping your brand relevant,” says Luxury Institute CEO Milton Pedraza. “Understanding diverse shopping behaviors of different generations of wealthy consumers is essential for catering distinct marketing strategies that resonate with each of them.”

Please visit us at www.LuxuryInstitute.com and Contact Us with any questions or for more information about specific brand data and rankings.

The Luxury Institute, LLC
luxinfo@luxuryinstitute.com

Millennials value heritage more than Gen X’ers: study

By: Joe McCarthy
Luxury Daily
April 29, 2014

A new report by the Luxury Institute found that millennials scrutinize investment value and heritage of purchases more than Generation X’ers and Baby Boomers.

The study also found that millennials regularly search for one-of-a-kind items as a way to signal status. While brands often treat “showrooming” as a threat to brand integrity, the research that accompanies the trend indicates that improved customer service and responsive multichannel efforts can turn the phenomenon into a benefit and a source for more revenue.

Millennials want the heritage of the brand, they respect history, and they see it as a validation of investment value,” said Milton Pedraza, CEO of The Luxury Institute, New York.

“They don’t have all the money in the world, they’re just starting out, so they want to make sure they’re buying appropriately,” he said.

“But they do have much higher expectations, so that’s a little bit of a paradox. They care far more deeply about certain aspects of a luxury brands.”

This study is the first in a series of three comparatives studies of millennials, Gen X’ers and Baby Boomers by The Luxury Institute.

Click the link to read the entire article: https://www.luxurydaily.com/millennials-value-heritage-more-than-gen-xers-study/

April 24, 2014

How Do Luxury Brands Build Intimate Relationships With Three Generations of Affluent Consumers?

(NEW YORK) April 24, 2014 – In the first of three studies conducted by the Luxury Institute, wealthy consumers across three generations earning at least $150,000 a year share their views on the attributes required for a brand to be considered luxury, the services that luxury brands should offer to earn consumer loyalty, and the luxury purchase decision process.

Overall, affluent Millennials, Generation Xers and Baby Boomers all agree that the quality, craftsmanship, customer service, and design must be impeccable for a luxury brand to succeed. Millennials actually place greater emphasis on luxury brand heritage and investment value than Generation Xers, a slight surprise given the common portrayal of young consumers as embracing only the new and trendy. Affluent Millennials also highlight one-of-a-kind items as a vital component, a feature that allows them to express their individuality while also recognizing a brand’s luxury credentials.

Convenient return, refund, and exchange policies, lifetime guarantees, and free shipping are extremely important to all wealthy consumers when purchasing luxury.  Shopper expectations have risen dramatically given the practices of online only retailers who seek to capture market share from traditional retailers. As a result, affluent consumers now perceive these complimentary services as the norm, especially when spending significant amounts on luxury purchases. Millennials who grew up in the age of discounting and of being courted by brands find rewards programs as well as personalized communication and services far more desirable vs. Baby Boomers.

Given the plethora of marketing platforms utilized by brands today, younger affluent generations are more knowledgeable about luxury products and services, while Baby Boomers rely on previous experiences to impact their purchase decisions. “Even though wealthy Millennials have information and content at their fingertips, they are still more likely than Boomers, who have established preferences over the years, to seek out the opinions of others when making purchase decisions,” says Luxury Institute CEO Milton Pedraza.

Please visit us at www.LuxuryInstitute.com and Contact Us with any questions or for more information about specific brand rankings.

The Luxury Institute, LLC
luxinfo@luxuryinstitute.com

March 5, 2014

Niche perfumers sniff opportunity

Artisans have a nose for fresh alternatives to mass-market fragrances.

By: Cara S. Trager
Crain’s New York Business
March 4, 2014

Tucked away in a TriBeCa basement, behind a sliding glass door, is a by-appointment-only custom—fragrance studio, elegantly decorated with antique furnishings, floral pictures and South African artifacts.

It’s all part of Sue Phillips’ strategy to infuse her one-of-a-kind fragrance shop, Scenterprises Ltd., with an air of exclusivity. And inside the 350-square-foot space, Ms. Phillips reinforces that mystique as she helps patrons discover their olfactory preferences and then blends fragrant drops from assorted small bottles to create scents just for them.

Private one-hour consultations run $350 per person and include a half-ounce bottle of handmade, personal perfume. Refills run $85 for a half-ounce.

Click the link to read the entire article which includes several quotes from Milton Pedraza, CEO of Luxury Institute: http://www.crainsnewyork.com/article/20140304/SMALLBIZ/303029994/niche-perfumers-sniff-opportunity

March 3, 2014

Soaring Luxury-Goods Prices Test Wealthy’s Will to Pay

Sales Growth Slows as Competition Heats Up; ‘Prices Have Gotten Really Crazy’

By Suzanne Kapner and Christina Passariello
Wall Street Journal
March 2, 2014

Despite expanding into new markets, the luxury-retail business has been relying on price increases to drive sales. Now, even the very wealthy are nearing the limits of what they are willing to spend.

In the past five years, the price of a Chanel quilted handbag has increased 70% to $4,900. Cartier’s Trinity gold bracelet now sells for $16,300, 48% more than in 2009. And the price of Piaget’s ultrathin Altiplano watch is now $19,000, up $6,000 from 2011.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://online.wsj.com/news/articles/SB10001424052702304585004579415110604829016?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304585004579415110604829016.html

 

February 28, 2014

Buying into bling

By Daina Lawrence
Special to The Globe and Mail
February 27, 2014

Affluent individuals around the world bucked the depressed market norms of the last few years and managed to keep the luxury goods market bustling by investing in alternatives such as art, wine and supercars.

Companies such as Hermès SA, Michael Kors Holdings Ltd. and LVMH Moët Hennessy Louis Vuitton SA are gaining new customers daily, with 10 million new buyers wading into the market each year.

Many of these companies have given good news to shareholders recently, including luxury goods dynamo Michael Kors – known for its footwear, watches and clothing – whose shares soared 17.3 per cent to $89.91 (U.S.) in early February, after the company’s report of higher-than-expected profits.

Click the link to read the entire article which includes quotes from Milton Pedraza, CEO of Luxury Institute: http://www.theglobeandmail.com/globe-investor/investment-ideas/buying-into-bling/article17132730/

January 6, 2014

But It Doesn’t Look Like a Marriott: Marriott International Aims to Draw a Younger Crowd

By Brooks Barnes
New York Times
January 4, 2014

J.W. Marriott Jr., the 81-year-old chairman of Marriott International, flew to London in September to inspect his company’s new jewel: Edition, a sumptuous boutique hotel intended to anchor a new 100-city chain — the next W, if Marriott has its way. But Mr. Marriott did not stay overnight at the London Edition, as the new property is known, with its laser-lighted nightclub and guest-room paintings of women wearing toilet-paper turbans. He bedded down at Grosvenor House, one of the company’s more traditional luxury hotels.

“This is what I know, but I’m the past,” he said, sitting in the old-fashioned floral splendor of a Grosvenor corner suite. Edition, conceived in partnership with the boutique hotelier Ian Schrager, is about the Marriott company’s future. “We’re trying to get some flash,” Mr. Marriott said. He rose wearily from his chair. “I’m off to see the flash.”

Marriott is big. The company, based in Bethesda, Md., operates 660,000 rooms under 16 brands, including Courtyard, Renaissance and Ritz-Carlton; more than 800 new Marriott-operated properties are in the works worldwide.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://www.nytimes.com/2014/01/05/business/marriott-international-aims-to-draw-a-younger-crowd.html?pagewanted=print

 

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