Luxury Institute News

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

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.

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 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}

April 24, 2012

Wealthy U.S. Consumers Favor and Feel More Connected to Luxury Brands Offering a Mobile App

(NEW YORK) April 24, 2012 – The independent and objective New York City-based Luxury Institute, in cooperation with award-winning mobile marketing agency Plastic Mobile, surveyed affluent U.S. consumers about the growing connection between luxury and the emerging mobile market. The results of their research have just been released in the study, “Mobile Apps And Commerce for Luxury Brands.”

“Luxury brands must acknowledge the impact of technology advancements in the mobile space and find a humanistic way to connect and engage with their consumers through mobile,” says Milton Pedraza, CEO of Luxury Institute.

Gucci, Louis Vuitton, Saks Fifth Avenue, and Gilt Groupe are the most frequently downloaded apps by wealthy consumers who have luxury brand applications on their mobile device. Most affluent smartphone owners who are downloading luxury apps are using them to find information on products, services or brands (56%).

Almost all wealthy consumers who have used luxury brand apps report that they have had a good experience with the mobile apps (93%). In addition, 71% report that they feel better connected to luxury brands after downloading and/or using their applications and 64% view luxury brands that offer a mobile application more favorably than brands that do not.

The survey respondents indicate there are a number of features they expect from luxury brand applications and highlight loyalty programs (46%) and early access to sales (45%) as the most important.  In addition, providing sales professionals with a mobile application that can specify details about products (53%), have the ability to check for sizes and availability at other stores (50%) and in-store product inventory (47%) would enrich the luxury shopping experience for affluent consumers.

Of the 63% of wealthy consumers who have made a purchase through their mobile device, just under 20% have bought a luxury product or service. While preference for the in-store experience (45%) is why wealthy smartphone users have not yet fully embraced luxury mobile commerce, the majority of luxury consumers who choose to shop via mobile report that there is no upper monetary limit to how much they would spend (72%). This indicates a tremendous emerging opportunity for luxury brands to connect with consumers through mobile.

“Mobile has been receiving a lot attention in the retail space lately. The study suggests the mobile strategy for luxury brands must be about enhancing the in-store customer experience and using the platform to help strengthen customer relationships,” says Melody Adhami, President and COO of Plastic Mobile.

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.

About Plastic Mobile
Plastic Mobile is an award-winning mobile marketing agency of thinkers, artists, creators and builders with one common aspiration: to create extraordinary user experiences. Plastic Mobile is at the heart of the evolution of interactive mobile technology, pushing the boundaries and setting the bar for the standard of quality.

Known for many quality, first-in-kind mobile initiatives, Plastic Mobile delivers exceptional client service and highly customized mobile solutions for all platforms. With a diverse, high-profile client list, including Air Miles, Axe and Royal Le Page, they are the proud recipients of myriad awards, including the 15th annual Webby shopping award, “the Oscars of the Internet.” www.plasticmobile.com

April 13, 2012

Luxury Apps Pamper High-End Shoppers

By Paul O’Donnell
CNBC
April 12, 2012

Luxury retailers inhabit an elegantly lit world of richly paneled walls, sleek stone floors and plush goods. For them and their upscale customers, digital commerce is a foreign land, full of flashing offers prompting consumers to download a — gasp! — printable coupon.

Slowly, however, high-end merchants like Neiman Marcus and luxury brands like Burberry and Stella McCartney are adapting to the new virtual shopping scene, incorporating mobile apps, “augmented reality” and iPad link-ups that extend, rather than sully, the plush experience of their stores.

Last month Neiman Marcus introduced a pilot program called NM Service, an app that lets shoppers know which of their favorite clerks are on the floor when they arrive. The app can also be used to make appointments remotely with salespeople or pick out the items that interest them before they get to the store.

Neiman’s new mobile strategy, which imitates a system long available at Apple stores, is being praised as a cutting-edge move for a luxury retailer into SoLoMo marketing — social, local and mobile. “The consumer these days is a moving target,” says Scott Forshay, strategist for mobile and emerging technologies for Acquity Group in Austin, Texas. “How do we engage them while they are out there in the world?”

It’s a difficult question for a sector that is used to making its sales by luring customers into its opulent, carefully controlled environments. Even as the rest of the public has shifted its buying online, high-end brands have been insulated from technology trends by their relatively older, late-adopting demographic.

But ignoring the tech revolution is a luxury, so to speak, upscale brands can no longer afford. A study conducted earlier this year by The Luxury Institute showed that 60 percent of high net worth individuals own smartphones, and of those, 67 percent used them to shop. Eighty percent had downloaded an app.

And that’s just the Boomers, who make the bulk of expensive purchases today. The fastest growing segment of affluent shoppers are the group that marketers call the Millennials. Now in their early 20s, they are known for their desire to be digitally connected, a passion they expect their favorite brands to share.

“The customer is leading the shift,” says Wanda Gierhart, chief marketing officer for the Neiman Marcus Group, who helped develop the new app with the Silicon Valley firm Signature. In the next decade, she says, “it’s the customers who will be doing the marketing. They are going to do the communicating about our brands.”

As in other e-pursuits, from reading the news to playing Angry Birds, apps have become the primary conduit of sales. Another study, by the St. Louis digital marketing firm Moosylvania, showed that more than 20 percent of smartphone owners had downloaded at least 30 apps—more than half of them for free. “The number of free apps on people’s phones is an indicator that downloading them gets easier and more familiar every day,” says Moosylvania’s founder and CEO Norty Cohen.

The challenge is to reinterpret digital commerce for the luxury customer. The high-end home-appliance manufacturer Jenn-Air has developed an app for the iPhone that lets consumers upload photos of their kitchens and replace their stoves and refrigerators with images of Jenn-Air products. Sotheby’s International Realty’s free app shows nearby restaurants, wineries, and other amenities with each property listing. “It’s about tying into the consumer’s lifestyle,” says Cohen.

The fit can be less than seamless. The token of virtual shopping today is the blotchy, black-and-white, scannable square called a QR code. It is useful for beaming information about products straight from an in-store display or magazine page to customers’ smartphone, but, Forshay notes, “QR codes were designed in Japanese automotive plants to keep track of parts. To translate that into luxury is a quantum leap.” Special offers and price breaks that lure mass consumers have little power over the wealthy.

Instead, say mobile-marketing experts, what affluent shoppers value most is access. In a pioneering 2010 campaign, Burberry handed customers iPads which they could use to watch video of exclusive fashion shows and, if they saw something they liked, order items straight off the catwalk.

The best luxury digital plays, in other words, may be the ones most people never hear about. Forshay imagines stores pinging loyal customers to invite them to private trunk shows or to meet their favorite label’s creative director. “You’re seducing people with product, but also experience,” he says. “You’re taking them on a journey.”

http://www.cnbc.com/id/47024583

April 6, 2012

Make Purchases From Our iPhones? We’d Rather Not, Say the Wealthy

By Lauren Covello
FOXBusiness
April 5, 2012

It’s often said that the rich have the world at their fingertips.

When it comes to shopping, however, it seems they prefer to use their legs.

Sixty percent of wealthy smartphone owners say they rarely or never shop on their mobile phones, according to a new survey released by independent research firm The Luxury Institute. The survey polled individuals who earn $150,000 or more a year and reported an average net worth of $2.8 million.

While the respondents cited several reasons for not indulging in mobile shopping, the biggest reason by far was a preference for the in-store shopping experience. Fifty-one percent said they prefer to touch and feel the products they’re buying than swipe through products on their smartphones.

“They love the in-store experience; some even see it as entertainment,” says Milton Pedraza, CEO of the Luxury Institute…

Click the link to read the entire article which includes additional quotes from Milton Pedraza, CEO of Luxury Institute: http://www.foxbusiness.com/personal-finance/2012/04/05/make-purchases-from-our-iphones-wed-rather-not-say-wealthy/

April 4, 2012

Wealthy Smartphone Users Like Angry Birds and Facebook

By Robert Frank
Wall Street Journal
April 3, 2012

Millionaires don’t get to be millionaires by playing games on their phones right?

Wrong. According a new study from the Luxury Institute, 73% affluent smartphone users (with an average net worth of $2.8 million) used smartphone apps every day. The most frequently downloaded apps for millionaires included Angry Birds, Facebook and Words with Friends.

Of luxury consumers with smartphones, 28% of them own an iPhone, 22% own an Android, 16% own a BlackBerry and 2% own another smartphone, the study said.

Click the link to read the entire article: http://blogs.wsj.com/wealth/2012/04/03/wealthy-smartphone-users-like-angry-birds-and-facebook/

April 3, 2012

Wealthy smartphone users less likely to play games, tweet

Wealthier smartphone users are less likely to play games or tweet and will opt for news, travel or finance apps, according to a new study.

By Natasha Baker
Reuters
April 2, 2012

The research by The Luxury Institute focused on app usage among wealthy consumers, who earn an annual income of $150,000 or more. They tend to be older, with a mean age of 52.

“As you get older and have family and significant others, aging parents, and a lot more assets and investments, you’re going to need apps for far more relevant things than playing games and chatting with your peers,” said Milton Pedraza, CEO of The Luxury Institute.

The findings are in contrast to smartphone usage as a whole, which research firm Nielsen showed is dominated by games and social networking categories.

The wealthy use Facebook and Angry Birds, the two most downloaded apps of 2011, but overall, higher-income consumers use apps for entertainment far less than the average smartphone user, according to Pedraza.

While wealthy consumers are only slightly more likely to have a smartphone than the general population, Nielsen said the breakdown of devices owned differs considerably.

Forty-five percent of wealthy smartphone users own an iPhone, followed 35 percent with an Android device and a quarter who had a Blackberry. But Nielsen found that overall Android had 46 percent of market share, followed by the iPhone with 30 percent and Blackberry with 15 percent.

“Google’s strategy with Android is that they have multiple manufacturing partners,” explained Jonathan Carson, the CEO of digital at Nielsen. “There’s a broader choice with Android in the number of devices, and that may offer some opportunities for lower-end consumers.”

He added that the iPhone has always done quite well with high-income consumers.

Carson also noted an upswing in the number of smartphone users adopting iPhones within the last few months, which he attributes to the iPhone 4S, and Apple’s strategy to keep lower-priced models on the market at lower-price points to appeal to a wider range of consumers.

The study also showed that more than 80 percent of affluent consumers have downloaded apps and many have opted for paid apps and in-app upgrades. But on average, wealthier consumers download about half as many apps as the average consumer.

Among wealthy smartphone users, 67 percent have used their mobile device to shop for products or services online with tickets, gift cards, food or electronics the most popular purchases.

“There are a large number of people that still love to shop in the store, and I don’t think it’s only older people,” Pedraza said, adding apps can augment the in-store experience.

The marketing firm Plastic Mobile polled 603 consumers whose mean income was $295,000 and net worth was $2.8 million for The Luxury Institute study.

http://www.reuters.com/article/2012/04/02/us-app-wealthy-idUSBRE83108920120402

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