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.”

November 30, 2013

Are Apple users savvier shoppers?

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By Quentin Fottrell
MarketWatch
November 29, 2013

Owners of iPhones and iPads pay a premium for their Apple (NASDAQ:AAPL)   devices, but that doesn’t mean they aren’t looking to save a few bucks elsewhere. In fact, though Android devices outnumber those running iOS, Apple users were four times as likely to search for Black Friday deals, new research finds.

As retailers released their Black Friday deals online on Thanksgiving, data indicates that owners of Apple devices were on the case. U.S. consumers using Apple’s iOS operating system drove 19% of online sales compared to 5% for Google’s (NASDAQ:GOOG)   Android, according to the “IBM Digital Analytics Benchmark,” a real-time analysis of millions of online transactions from 800 retailers. The type of device used also affects sales. Smartphone owners browse, while tablet owners buy, the study found: Tablets drove 15% of online sales versus 9% for smartphones.

Apple also has far more affluent customers than Android, says Milton Pedraza, CEO of the Luxury Institute. What’s more, Apple users spent $127 per order online versus $113 for Android, the IBM study found. Android phones are sold at heavy discounts, while Apple keeps a tight rein on its pricing for iPads and iPhones, says Thomas Husson principal analyst at Forrester Research. “iOS users also tend to be more mobile-savvy than Android’s,” he says.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://www.marketwatch.com/story/are-apple-users-savvier-shoppers-2013-11-29/print?guid=6C5C5C18-5911-11E3-8B2D-00212803FAD6

October 16, 2013

Have to Ask What the App Costs? It’s Not for You

By Claire Cain Miller
New York Times
October 15, 2013

The superrich have always had magazines, hotels and retailers catering to the special needs of their stratosphere. So it’s no surprise that the digital world has caught up.

Though luxury brands and services were initially reluctant to go online, a new corner of the Web and mobile app marketplaces has emerged, dedicated to making life easier for wealthy consumers. “They’re playing off the affluent desire to be treated differently, expect a very high level of service and have something edited and vetted and pay for that,” said Andrew M. Sacks, president of the Affluence Collaborative, a research firm studying affluent consumer behavior, and AgencySacks, a branding agency.

Luxury advertisers then follow closely behind. “If you’re successful in bringing several thousand affluent customers to a site, you’re then prime to offer brands and advertising to that audience,” Sacks added.

Click the link to read the entire article: http://www.nytimes.com/2013/10/16/your-money/have-to-ask-what-the-app-costs-its-not-for-you.html?_r=0

June 10, 2013

Affluent Shoppers Make Mobile an Essential Stop in the Purchase Funnel

Discounts get affluent mobile shoppers to buy

eMarketer
June 10, 2013

The wealthy consumer is highly likely to own a smartphone or tablet, and the devices are becoming critical shopping tools for these high-income individuals. In April 2013, the Luxury Institute surveyed US internet users ages 21 and older with gross incomes above $150,000 and found that more than eight in 10 owned a smartphone, while 56% reported owning a tablet. These penetration rates are well above those for the overall US population on smartphones or tablets.

As affluent consumers become increasingly comfortable with their smart mobile devices, they are turning to them throughout the purchase process. The Luxury Institute found that the most common smartphone mcommerce activity was looking up store information. After this came product research and comparison shopping.

On tablets, consumers were most likely to look up product images and read user reviews and recommendations. This points to the increasing importance for luxury retailers to make sure they have an attractive, interactive tablet showcase for their products, as tablets serve as “lean-back” devices, which consumers often use to get to know potential purchases.

When it came to making actual purchases, the store still won out as the most common place to make a purchase among affluent consumers, cited by 78% of respondents. Purchasing via the desktop web was right behind, however, cited by 77%. Women were 6 percentage points more likely than men to make a purchase through this means, while men showed a greater proclivity to buy on mobile.

Mobile websites on tablets were the place where the greatest percentage of shoppers made mobile purchases, at one out of five affluent consumers. Another 11% used a tablet app to make a purchase. Fourteen percent of affluent consumers used the mobile web on a nontablet device to buy and 12% used a mobile app.

And even if affluent shoppers have plenty of cash at their disposal, that doesn’t mean a deal won’t help them convert. On tablets, special deals or price discounts were the No. 1 reason respondents would purchase via these devices, with 43% indicating that would sway them. On smartphones, special deals tied with ease of use, at 45%, as top reasons to complete a purchase on the device.

http://www.emarketer.com/Article/Affluent-Shoppers-Make-Mobile-Essential-Stop-Purchase-Funnel/1009954

October 17, 2012

Luxury Institute exec: Humanize first, mobilize second

By: Rimma Kats
Luxury Daily
October 17, 2012

NEW YORK – A Luxury Institute executive at the Luxury Interactive 2012 conference said that brands must understand the value and potential of personal sales associate communications versus mass emails from corporate.

During the “Optimizing Mobile Technology to Build Customer Relationships” session, the executive addressed how mobile technology is not a differentiator, but a utility. Moreover, it is how marketers use the technology that matters.

“It’s all about the human-to-human relationships,” said Milton Pedraza, CEO of Luxury Institute, New York. “The biggest opportunity to use mobile to drive profits is customer relationship building.”

Click the link to read the entire article which includes quotes from Milton Pedraza, CEO of Luxury Institute: http://www.luxurydaily.com/luxury-institute-exec-humanize-first-mobilize-second/

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 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

August 7, 2012

10 Things Apple Won’t Tell You

From customer service to app safety and even how its devices affect our relationships, here are 10 things Apple won’t likely tell you about its products and its business.

By Quentin Fottrell
SmartMoney
August 6, 2012

1.”Our customers are worn out.”

All that initial excitement over the first iPhone or iPad has quickly given way to what analysts are dubbing “upgrade fatigue” — with even Apple’s most loyal customers upset about the steady stream of newer models. In fact, when people buy Apple’s latest product, the company is usually already preparing its replacement, says technology consultant Patchen Barrs, who has owned 25 Apple products over the last 20 years. “Everything we buy from them is already out of date,” he says. Take a count: Since 2001, there have been six iPods, two iPod minis, six iPod Nanos, four iPod Shuffles and four editions of the iPod Touch. Apple has released five iPhone models since 2007 and has had three iPads since 2010.

Of course, newer models have their upsides: They’re usually slimmer, faster and have additional features like better cameras and improved screen quality. And Apple, which declined to comment for this story, has said that such improvements more than justify the fast pace of their new additions. (In March, for example, Apple spokeswoman Trudy Muller said the latest iPad delivered a “stunning” screen display.) But that argument isn’t enough to appease some cash-strapped consumers. Almost 50% of consumers say they’re increasingly unwilling to buy new products for fear that they will be rendered outdated by even newer versions, according to a recent survey of 2,000 people by Marketing Magazine in the U.K.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://www.marketwatch.com/Story/Story/?guid={61E63842-DFED-11E1-961B-002128049AD6}

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