Luxury Institute News

August 28, 2015

A Place to Lay Your Bread

The Way That the Rich Travel is Changing
The Economist
August 29, 2015 (Print Edition)

At the Burj Al Arab hotel in Dubai, one of the world’s most luxurious (pictured), guests can avail themselves of 24-carat gold iPads and caviar facials. The cheapest rooms cost $1,000 a night; those interested in the royal suite can expect to pay nearer $25,000. Such ostentation is not to everyone’s taste. But it illustrates a trend: the way that the rich spend their money is changing.

Once, the well-heeled bought fancy stuff. Nowadays they spend more on things to do and see. A report last year by the Boston Consulting Group (BCG) found that of the $1.8 trillion spent on luxury goods and services worldwide in 2012, nearly $1 trillion went on “luxury experiences”. Travel and hotels accounted for around half that figure.

This partly reflects the growing weight of rich folk from developing countries. Wealthy Chinese spend 20 days a year travelling for leisure, according to ILMT, a travel agency. The most popular destination was Australia, and nearly half made it as far as Europe. On average, affluent Americans went on holiday 3.9 times in 2014, says Resonance, a consultancy, up from 3 times in 2012. Around half travelled more than 1,000 miles (1,600km) for their most recent trip. They favoured Europe, especially Italy, Britain and France.

Antonio Achille of BCG says luxury consumers have distinct spending styles, depending on how old they are and whether they were born rich or became so later. The young and the recently affluent tend to buy visibly costly items that will impress their peers. Soft Living Places, an Italian luxury hotelier, recently filmed an advert to educate newly rich Russian tourists. It offered such advice as “don’t show off by ordering the most expensive bottle of wine on the list.” By contrast, the longer someone has been rich, the more likely he is to value quality over ostentation.

When they travel, rich 20-somethings are drawn toward gregarious pleasures that can be shared on social media to make their friends jealous. But plenty also view holidays as a time to learn something and broaden their cultural horizons, says Chris Fair of Resonance. Though older travellers to India still frequent the Taj or Oberoi hotels, younger ones are more likely to plump for a homeshare—albeit a posh one. The established wealthy spend relatively more on travelling to five-star hotels.

Tapping into this more traditional market is not easy: in some respects, the luxury-hotel business has become commoditised. As the standard at the best establishments has risen, high-paying guests have come to expect a level of service that is ever harder to exceed. “There is only so much caviar and champagne you can throw at them,” says Milton Pedraza of the Luxury Institute, a consultancy. Opulent bathrooms, world-renowned chefs and state-of-the-art technology are now the norm at the poshest hotels.

So differentiation must come from more personalised service. Value is added by “being generous in small ways”, says Frank Marrenbach, the chief executive of the Oetker Collection, a luxury-hotel group. Attentive service means remembering customers’ every preference, either because they have visited before or because the hotel has gathered data from previous trips elsewhere. Equally important is knowing when to step back, says Mr Marrenbach, because for rich guests downtime is also a luxury. At Villa Stephanie, a spa the group runs in Germany, guests can flick a switch in their rooms that blocks all wireless signals to their phones and computers. (Fortunately for paupers who stay in cheaper joints, many of these devices already come with a handy off-switch.)

The established rich, because they own so much stuff, place a high value on doing or feeling something new. According to BCG, they claim to gain three times the emotional reward from an experience, compared with owning something with the same price tag. For luxury-travel retailers, this means that selling fancy add-ons to trips is one of the most lucrative parts of the trade.

Abercrombie & Kent, an upmarket travel agency, for example, arranged for its guests in Egypt to view Queen Nefertari’s tomb, even though its doors had been sealed to the public for decades. In Moscow its clients can attend a private opening of the Kremlin grounds and have lunch with an ex-KGB agent who worked as a spy in London during the cold war. Even when shopping, the experience can matter as much as the acquisition. For some it is important not just to own a Burberry raincoat but also to have bought it from the brand’s flagship London store.

The biggest concern of rich travellers, according to Resonance, is safety. As crime levels have fallen in cities such as London and New York, they have become more appealing to affluent visitors. Metropolitan travel is now as popular as traditional “drop-and-flop” resorts with well-off Americans, says Resonance. Hotels and tour operators catering to the rich must be able to prove their security credentials. Abercrombie & Kent owns its own “destination management companies” in many African and Asian countries, which can respond quickly to problems, including by evacuating guests caught up in Nepal’s recent earthquake.

For the very richest travellers, there is another consideration. Many will go to extraordinary lengths to make far-flung destinations feel like home. Kevin Johnson has worked as a chief-of-staff and palace manager for several billionaires. Some of his employers would even take their favourite bed on their travels, he says. When arranging a holiday on a remote island, his bosses also insisted on their own IT infrastructure, often sending someone ahead to install it. This was partly to ensure security, he says, but also to be sure they could watch their favourite television channels. For the traveller who has everything, the familiar can be the biggest luxury of all.

Source: http://www.economist.com/news/international/21662558-way-rich-travel-changing-place-lay-your-bread?fsrc=rss

August 24, 2015

Affluent Millennials Setting Their Own Pace

U.S. News and World Report
By: Mallory Hughes
August 20, 2015

Chris Beauregard, 25, recently found himself at a chic rooftop pool party in Washington. With the Capitol dome in the background, young professionals watched an exclusive Dar Be Dar by Tala Raassi summer fashion show while sipping complimentary DeLeón Tequila cocktails.

“I brought seven other friends with me,” says Beauregard. “Everybody had a blast.”

It’s a setting that is becoming common for a subset of the Millennial generation known as the “affluent Millennials.”

The 6.2 million 18- to 34-year-olds who report annual household incomes of more than $100,000 are acting out the aspirational lifestyle of their cohort because they have the financial means to do so, said Leah Swartz, a content specialist at FutureCast, a marketing firm focused on Generation Y.

“It’s not that they’re so different from Millennials,” says Swartz. “It’s that they’re acting on these aspirational trends that we see take shape in the general population.”

Many among the 80 million Millennials say that they eat organically and travel frequently, but a majority still live on a limited budget, hitting up big retailers for bargain prices.

Rather than focusing solely on what they can buy, Millennials create experiences and “shareable moments with friends,” Swartz says.

It’s a generation that was the first to embrace trends like going digital and using social, but it is the affluent among it that have more impact because they’re the ones commenting on review sites and engaging with brands on social media.

“We’re seeing them take on the influential role among the Millennial population,” she says, adding that affluent Millennials are 10 percent more likely to participate in online rating sites than their non-affluent peers.

“It’s likely because they can do more and because their budgets allow for it,” Swartz said.

Business and finance are the most common career paths for these people, but affluent Millennials are shifting post-graduate educational trends.

The research found that 44 percent of the 6.2 million affluent Millennials did not graduate from college. Of those that completed college and went on to graduate school, nearly 4 percent didn’t complete that education. While these numbers are high, affluent Millennials still graduate from college and grad programs at higher rates than their non-affluent counterparts.

“When you think of Boomers or even a little bit Gen-X,” Swartz says, “money was very much linked to degrees and higher education.”

But these Millennials don’t necessarily see the connection. FutureCast researchers in Kansas City found that young adults in the affluent subset are more interested in quickly putting the knowledge gained in their undergraduate programs to use in the workforce.

“They’re seeing more value in entrepreneurialism rather than continuing education,” Swartz says.

Billy McFarland, a 23-year-old tech entrepreneur, began his undergraduate education at Bucknell University planning on studying computer engineering. He dropped out after a year.

“I never really focused on school the way I should,” McFarland said in a phone interview. “But I finally went to college, I was living alone, and realized I could start companies full-time and not worry about school. It was an easy decision.”

Most recently, McFarland founded two companies: Spling, a tech-driven advertising platform, and Magnises, a mobile concierge app geared toward Millennials.

Magnises, McFarland says, has nearly 7,000 members stemming from 25,000 applicants. Approximately 90 percent of members using the app are 21 to 35 years old, with self-reported annual incomes of $50,000 to $250,000.

The $250 per year membership comes with a black metal membership card, a community hangout out and the concierge app with recommendations on what to do with one’s free time and the ability to make a reservation at a suggested place.

This generation travels more and values events, services and experiences over goods, says Milton Pedraza, CEO of the Luxury Institute, a global research firm focusing on luxury goods.

One example is SoulCycle, the trendy New York City-based fitness company hosting 45-minute spin classes that feel more like being on a dance floor than in a cycling studio. Millennials aren’t buying the expensive bike so they can go cycle the hillsides outdoors; they’re buying the experience.

Pedraza says he thinks Millennials are drawn to events they can share with “people who are their peers, who share their values, who share their standards of living and who share their tastes.”

But if Millennials are trendsetters, don’t they want to find the best places to go — and be first ones on the scene? Isn’t an app, such as Magnises, that suggests the hottest hangouts in some of America’s biggest cities and sends 20-somethings flocking in that direction kind of, well, mainstream?

“I think there’s recognition that that’s going to inevitably happen,” Pedraza says. “If something’s really good it’s going to be swarmed—Millennials swarmed.”

Source: http://www.usnews.com/news/articles/2015/08/20/affluent-millennials-setting-their-own-pace 

August 14, 2015

Millennials’ wealth management preferences differ from boomers: report

Luxury Daily
By: Kay Sorin
August 14, 2015

Millennial investors have different preferences compared to their baby boomer parents when it comes to wealth management, according to a new report by Luxury Institute.

While baby boomers and older generations prefer to work with full-service brokerage firms, wealthy millennials and members of Generation X are showing an increased preference for working with private advisors. Independent financial advisors can offer a more individual approach that is often appealing to younger investors who are accustomed to personalization.

“Independent financial advisors are able to do more things for their clients, because they are not working for a firm that has rules and regulations about what they can or can’t do,” said Milton Pedraza, CEO of Luxury Institute, New York. “The IFA is the fastest growing industry in wealth management.”

Different strokes
Luxury Institute surveyed investors earning at least $150,000 and found that at least 46 percent used some form of advisor to help them manage their finances. Among respondents aged 65 and over, this number rose to 59 percent.

Michael Kors affluent couple car
Wealthy millennials are inclined to prefer independent wealth managers

Respondents varied in their preferences for an independent wealth manager versus a full-service brokerage firm such as Morgan Stanley or Merrill Lynch. Interestingly, this preference strongly correlated with age.

“A full service firm doesn’t have a fiduciary relationship with the client, meaning that they are not legally obliged to serve the client’s interests only,” Mr. Pedraza said. “They can recommend an investment in which they will make a bigger commission.”

Millennials and members of Generation X and Y, defined as those 45 and younger, showed a significant preference for independent wealth managers compared to full-service brokerage firms. Thirty-eight percent chose to work with individual advisors while 27 percent preferred a big brokerage firm.

Michael Kors case
Millennials have access to more information and are well informed

Investors over 65 were much less likely to work with an independent advisor and only 28 percent reported doing so. They strongly preferred to go full-service with 56 percent using large firms to manage their wealth.

This difference between the generations is likely a result of their upbringing. Baby boomers were raised to expect to work with a big brokerage firm, while millennials may be more wary and distrustful after the recession of 2008.

Sotheby's London Property
Financial advisors can assist in major life decisions such as purchasing a home

Additionally, millennials have more information at hand, which allows them to be more selective with their advisors.

“Millennials are so much more informed that they depend less on a brokerage firm providing them with research,” Mr. Pedraza said. “Millennials don’t need as much because they are so informed.

“They know that very few financial advisors can outperform the market in the long term.”

One way in which individual advisors often distinguish themselves is by providing a more personal connection for clients. Luxury Institute found that expertise, trustworthiness and generosity were the most valued traits in financial advisors.

Affluent family
As millennials age they are in greater need of financial advice

More than numbers
Investors looking for both a personal relationship and a full-service brokerage firm may seek other solutions to find the ideal compromise. Ultra-affluent consumers often appreciate the relationship-building culture fostered at boutique wealth management firms, according to a report by the Luxury Institute.

The New York-based Rockefeller Wealth Management firm received the highest score in the report, followed by Atlanta-based Atlantic Trust Private Wealth Management and Convergent Wealth Advisors. As wealth management firms continue to repair their reputations following the financial crisis, prioritizing relationships over transactions will be important (see story).

Regardless of the size of a firm, relationships are often the deciding factor when it comes to choosing a financial advisor. To differentiate themselves from competitors, wealth management companies must make crucial changes that will only work if the alterations are part of the company’s core DNA, according to a speaker from the 2012 Forrester Customer Experience Forum.

It is no longer enough to just return calls and give a great customer experience, since clients at wealth management companies are not even thinking about those that do not require this. Instead, Morgan Stanley Smith Barney was forced to bolster its customer service in terms of technology, getting to know the customer and its consultants (see story).

Looking forward, it is essential for wealth management companies to take personal relationships into account in order to appeal to wealthy millennials.

“Millennials will be keen to stay with those who deliver and will dispense with those who don’t,” Mr. Pedraza said. “They will choose advisors based more on the client’s experience than on the client’s return.

“The baby boomers are kind of exiting the stage. Millennials will demand a far more objective and independent metric.

“Advisors need to be completely trustworthy and very responsive,” he said. “They need to go above and beyond to make the client feel special.”

 Source: http://www.luxurydaily.com/millennials-wealth-management-preferences-differ-from-boomers-report/

August 10, 2015

The Death of the Swiss Fine Timepiece Has Been Greatly Exaggerated

The Lilian Raji Agency
By: Lilian Raji
August 10, 2015

Late last month, Edward Faber, co-owner of Aaron Faber Gallery and author of  American Wristwatches: Five Decades of Style and Design,  Gary Girdvainis, editor of WristWatch magazine and AboutTime magazineand Jeffrey Hess, CEO of Ball Watch USAMilton Pedraza, CEO and Founder of The Luxury Institute, and Jason Alan Snyder, Chief Technology Officer of Momentum Worldwide reconvened Aaron Faber Gallery’s annual Watch Collectors’ Roundtable to debate the question, “Will Smartwatches Disrupt the Swiss Watch Industry?” The Roundtable was moderated by Eleven James CEO, Randy Brandoff.

With the recent  release of a report by market research firm Slice Intelligence announcing that Apple watch sales have declined 90% since their initial launch, the unanimous predictions of the Roundtable panelists has been proven accurate:  no, smartwatches will not disrupt the Swiss watch industry.

What the panelists couldn’t agree on, however, was if smartwatches would impact the industry in any way.

  • Jeff Hess, who also owns Hess Fine Art, noted his customers have been coming in wearing a smartwatch on one wrist and a fine Swiss timepiece on the other.  In this, there seems to be the possibility of harmony between the two types of watches.
  • Edward Faber asserted that a smartwatch will never seem as prestigious as walking into a boardroom wearing a Rolex Presidential or other high status watch.  Smartwatches will only be a gadget.
  • Milton Pedraza agrees on the novelty factor of watches, but didn’t dismiss that smartwatches could ultimately be more a fashion statement than a power statement.
  • Gary Girdvainis predicted that smartwatches would ultimately become gateways for the millennials who gave up watches for their smartphones to now begin entertaining the idea of wearing a watch.  When these same millennials reach their 30s, after spending the last few years wearing a smartwatch, graduating to a Swiss timepiece will be their next step.
  • For tech industry expert, Jason Alan Snyder, smartwatches are about functionality and features.  They are about advancing technology to make our lives easier. The debate shouldn’t be about smartwatches vs timepieces, they should be about smartwatches and all the major advancements going on in technology.

As Randy Brandoff moderated the panel, addressing such issues as the future of the watch industry for collectors, what future technological functions make sense for wristwear and Swiss watch manufacturers pursuing their own smartwatches, panelists made predictions and gave insights that will make many watch, technology and luxury industry people “wait and see” over the next few months as smartwatches set the stage for the evolution of how people tell time.

Click the link to watch the video of the roundtable for quotes by Milton Pedraza, CEO of Luxury Institute: The Watch Collectors’ Roundtable – Will Smart Watches Disrupt the Swiss Watch Industry?

To learn more about the Roundtable at http://smartwatches.lmrpr.com or contact The Lilian Raji Agency at lilianraji@lmrpr.com or (646) 789-4427.

July 10, 2015

Tesla Hires Ex-Burberry Executive to Lead North American Sales

Bloomberg Business
By: Dana Hull
July 10, 2015

Tesla Motors Inc. has hired former Burberry senior vice president Ganesh Srivats, adding a sales executive to help the electric-car maker extend its reputation for automotive luxury to an increasingly global audience.
Srivats, whose position as vice president for North American sales was confirmed Thursday by the company, will help Tesla deepen its already formidable brand into a premium lifestyle experience to go with its high-tech image, taking a cue from the kind of marketing BMW, Porsche and Ferrari have done.

“This makes all the sense in the world,” said Scott Galloway, a professor of marketing at New York University’s Stern School of Business, in a phone interview. “Tesla is not an automobile company, it’s a luxury company.”
Srivats joins the automaker from a British fashion house known for its heritage plaid cashmere scarf and trench coats as well as digital savvy. Apple Inc. hired former Burberry Group Plc Chief Executive Officer Angela Ahrendts as head of its retail operations in 2013.

The new Tesla executive held strategy and retail posts for Burberry starting in 2009 and most recently was senior vice president for retail in the Americas, according to his LinkedIn profile.

The North American sales job is a newly filled position for Tesla. The Palo Alto, California-based company said in March that it was reassigning Jerome Guillen, who was vice president of global sales and service, to a role focused on delivery and long-term customer care and would hire new executives to lead the sales operations by region.

Sales Target

Tesla plans to introduce its Model X SUV late in this quarter and says it will sell 55,000 vehicles worldwide this year. The automaker ended the first half with 21,552, about 40 percent of the target.
Tesla doesn’t have dealerships and sells its products directly to consumers via stores and galleries. It doesn’t pay for traditional advertising and relies heavily on free media and word-of-mouth among its customers, many of them tech-savvy early adopters.

“Srivats absolutely brings a client-centric approach to doing business,” said Milton Padraza, chief executive officer of the Luxury Institute, in a phone interview. “It’s about long-term relationships, not a transaction. Burberry is the master of client relationships.”

Digital Innovation

Burberry was one of the first luxury brands to embrace digital innovation, from live-streaming runway shows to launching on Periscope. The London-based company has had a makeover in the past five years, moving from conservative high-end fashion to haute couture, said Ken Harris, managing partner at Cadent Consulting Group in Chicago, which advises consumer and retail companies.

“If Tesla is thinking that they are selling a lifestyle and a way of thinking, then someone from Burberry could be the right choice,” Harris said in a phone interview. “Burberry gets lifestyle.”
The 159-year-old company with a “distinctly British attitude” has more than 4 million followers on Twitter and is led by Christopher Bailey, a 44-year-old designer who had been the company’s chief creative officer.

High-end automakers like to push expensive clothing and accessories to boost revenue and deepen their relationships with affluent customers. Besides T-shirts and messenger bags, Tesla has the Tesla Design Collection, which includes a $300 tote bag, $100 sheepskin leather driving gloves and a $40 iPhone sleeve.

Similarly, Porsche sells watches, luggage and other accessories under the Porsche Design brand. Ferrari also offers clothing, shoes and even a cigar box under its brand name. BMW and its Mini brand also sell pricey accouterments.

Source: http://www.bloomberg.com/news/articles/2015-07-10/tesla-hires-ex-burberry-executive-to-lead-north-american-sales

June 30, 2015

Online shopping? Wealthy still like going to store

Bloomberg News
June 29, 2015

Luxury Institute surveyed 1,600 wealthy people about shopping habits. They earn at least $150,000 a year with an average net worth of $2.9 million.

NEW YORK — Even as shoppers flock to the Internet to get the skinny on everything they want to buy, many wealthy patrons still prefer the traditional method. They want to go to shops, peruse the racks, and have a salesperson help them pick out the perfect item, according to a new survey.

Research and advisory firm the Luxury Institute surveyed 1,600 wealthy people about their shopping habits. The men and women earn at least $150,000 a year and boast an average net worth of $2.9 million. The study found that very few affluent shoppers research exactly what they want to buy, then go out and make the purchase. Instead, they’d rather walk around a store and see things up close. Plus, many insist on guidance from living, breathing humans.

“Luxury experts and luxury executives have bought into the myth that, whether its millennials or men or women, they’ve done so much research on the Internet that they can no longer be influenced in the store,” says Milton Pedraza, chief executive of the Luxury Institute. “This demonstrates the tremendous opportunity to create relationships based on expertise, trust, and generosity in the store.”

For instance, when buying jewelry, nearly half of women don’t do any research whatsoever before heading to the store, preferring to gaze at all the shiny baubles in glass cases and make their decisions on the spot. This number’s even higher when it comes to fashion accessories, with 60 per cent of women opting to forego online research before snagging a pricey handbag.

The only exceptions are men who want to buy a watch, with 28 per cent selecting the item beforehand, and women who are purchasing beauty products, at 26 per cent. That’s because buyers of pricey watches are often aficionados wholly familiar with the world of fancy timepieces, while makeup purchases usually occur to replenish items that were used up.

Though visiting stores without help is the most popular method of researching what to buy, many affluent shoppers prefer the guided path, with aid from a salesperson. Men especially want help picking out watches and jewelry, while women are most likely to want an associate’s expertise on beauty products. Perhaps those workers behind the counter may stay relevant after all.

As for salespeople, the perpetual quest to “sell” the customer is a model that no longer works, says Pedraza. Shoppers go to them for knowledge and guidance, not having products shoved in their faces. For this, luxury retailers must train workers to build real, human relationships over time.

“If you earn their trust, you earn the right to contact them again,” he says.

Source: http://www.thestar.com/business/2015/06/29/online-shopping-wealthy-still-like-going-to-store.html

 

Wealthy People Still Love Shopping the Old-School Way

Bloomberg Business
By: Kim Bhasin
June 29, 2015

Even as shoppers flock to the the Internet to get the skinny on everything they want to buy, many wealthy patrons still prefer the traditional method. They want to go to shops, peruse the racks, and have a salesperson help them pick out the perfect item, according to a new survey.

Research and advisory firm the Luxury Institute surveyed 1,600 wealthy people about their shopping habits. The men and women earn at least $150,000 a year and boast an average net worth of $2.9 million. The study found that very few affluent shoppers research exactly what they want to buy, then go out and make the purchase. Instead, they’d rather walk around a store and see things up close. Plus, many insist on guidance from living, breathing humans.

“Luxury experts and luxury executives have bought into the myth that, whether its millennials or men or women, they’ve done so much research on the Internet that they can no longer be influenced in the store,” says Milton Pedraza, chief executive of the Luxury Institute. “This demonstrates the tremendous opportunity to create relationships based on expertise, trust, and generosity in the store.”

For instance, when buying jewelry, nearly half of women don’t do any research whatsoever before heading to the store, preferring to gaze at all the shiny baubles in glass cases and make their decisions on the spot. This number’s even higher when it comes to fashion accessories, with 60 percent of women opting to forgo online research before snagging a pricey handbag.

The only exceptions are men who want to buy a watch, with 28 percent selecting the specific item beforehand, and women who are purchasing beauty products, at 26 percent. That’s because buyers of expensive watches are often aficionados wholly familiar with the world of fancy timepieces, while makeup purchases usually occur to replenish items that were used up.

Though visiting stores without help is the most popular method of researching what to buy, many affluent shoppers prefer the guided path, with aid from a salesperson. Men especially want help picking out watches and jewelry, while women are most likely to want an associate’s expertise on beauty products. Perhaps those workers behind the counter may stay relevant after all.

For salespeople, the perpetual quest to “sell” the customer is a model that no longer works, says Pedraza. Shoppers go to them for knowledge and guidance, not having products shoved in their faces. For this, luxury retailers must train workers to build real, human relationships over time.

“If you earn their trust, you earn the right to contact them again,” he says.

Source: goo.gl/nwbDcz

June 25, 2015

The unique way women shop luxury cosmetics

Cosmetics Design
By: Deanna Utroske
June 25, 2015

Luxury Institute, a New-York-based global luxury research provider, looked into buying practices of wealthy consumers and discovered that how affluent women shop beauty is exceptional.

Interestingly enough the institute saw fit to ask only women about their personal care shopping habits. All survey participants were questioned about buying apparel, shoes, and accessories in general as well as particularly about jewelry and watches.  While , only “wealthy women were…asked about beauty products and handbags”, according to a media release from the institute announcing the study findings.

The study compiles survey replies from respondents earning, on average, $289,000 annually and with an average net worth of $2,9m.

Personal

Women in this consumer group tend to depend on the in-store experience to make purchasing decisions, notes the Luxury Institute.

The survey findings show, however, that a fair number of such women would rather not have the advice of sales staff. Only about “one-fifth (19%) of wealthy women prefer to learn about products in-store with a sales associate’s help. “For cosmetics shoppers this number jumps to 29%.

Thus, “For wealthy women, visiting stores and looking at displays without help is the best method of finding out about new products in all luxury categories.”

Personnel

Nonetheless, sales associates and the in-store creative and management team have a real relevance for luxury brands.

With multiple points of information, wealthy consumers have become very say shoppers, but our findings show that decisions,” says Milton Pedraza, Luxury Institute CEO.

Building rapport and trust with luxury shoppers can make a difference. Pedraza notes that, “with proper training in relationship building, along with incentives to produce, store personnel can provide a significant boost to sales across luxury categories.”

Digital

Online and mobile resources figure quit prominently in product discovery for affluent women. And fortunately for luxury cosmetic brands and beauty retailers, these shoppers are reliably visiting their sites for product information.

Browsing a store website is the second-most preferred method of shopping, with 32% of wealthy women reporting this is how they discover new products, while 23% say they do the same at manufacturer’s websites,” finds the Luxury Institute.

 

Source : http://www.cosmeticsdesign.com/Business-Financial/The-unique-way-women-shop-luxury-cosmetics?utm_source=copyright&utm_medium=OnSite&utm_campaign=copyright

 

June 24, 2015

7 Insights Into Today’s Jewelry Shoppers

JCK Magazine
By: Rob Bates
June 23, 2015

Even shoppers used to shopping online can be turned into loyal brick-and-mortar customers with the right experience, according to a new survey of high-income shoppers from the Luxury Institute.

Milton Pedraza, CEO of the Luxury Institute, says that retailers today need to focus on building relationships—both on- and offline. His survey quizzed consumers with an average income of $289,000, and $2.9 million average net worth.

Among its findings:

—Women still prefer to browse for jewelry at stores.

Forty-nine percent of female respondents prefer to shop in store before deciding what jewelry to buy, and are more likely to enter stores without a sense of what they want or looking online.

“Woman are still very open to having an experience,” says Pedraza. “Jewelry isn’t a commodity product. Jewelry and watches are more experiential than other luxury goods. Consumers may research online but they still want to experience your store. They place great value in the discovery process.

—That’s less true for men.

By contrast, only 21 percent of men relied primarily on in-store shopping to make a decision. Twenty-eight percent of watch-buying men said they entered stores knowing precisely what to buy. Still, 37 percent of men wanted assistance from sales staff for jewelry purchases; 33 percent felt the same way about watches. But 38 percent preferred to get the information online.

“Most men don’t enjoy the experience of buying in a jewelry store,” says Pedraza. “They are more tightly focused and less willing to change. Though that is mostly older men; I’d say young men are more likely to change their mind. Of course those are stereotypes but they are still valid.”

—The in-store experience is more critical than ever.

“Customers enjoy the in-store experience, but we have so many retailers that are drone-like and similar,” he says. “Retailers have to be Disney. A long time ago there were just amusement parks and then Disney reinvented them. Luxury retailers have to reinvent themselves.”

That means stocking unique products and upgrading your associates, plus trying to make your store look and seem different. He points to Warby Parker’s innovative new eyeglass shops, whose sales per square foot now rival Tiffany’s, as an example.

—A key part of your store experience: Your store associates.

One quarter of women shoppers say they want a sales associate to help them purchase. But the quality of the associate makes the difference, Pedraza says.

“The industry is hiring people as opposed to selecting people,” he says. “We need to help associates to build skills, and compensate them for the long-term. I was talking to someone and he was complaining his people leave. I said of course they leave, they don’t feel respected, they don’t feel they are valued. If you pay a little extra you can have them really engage with customers and help build the brand.”

—Customers want great service, regardless of channel.

“You can’t stop people from going online,” he says. “It’s all about building relationships, no matter what the channel is. It’s making people feel special. You can create wonderful long distance relationships with online shoppers, the same way we do in our personal lives.”

—There are no “tricks” to servicing Millennails.

“We say millennials are so different,” Pedraza says. “But increasingly they are the same, especially as they get into their 30s, and they have kids and aging parents.

“So it’s not as much about treating millenials differently,” he adds. “It’s about treating them as individuals. It’s about digging deep. I always ask millennials if they want sales associates to help them and they do. But they mostly see them as unprepared and not trustworthy.”

—Price is not the most important factor.

“There is still a tremendous opportunity not to sell on discount,” Pedraza says, “but to sell on value, craftsmanship, design, a story, and the engagement with another human being. All of those elements are not about price. There is still a tremendous opportunity for stores to really forge relationships with consumers.”

Source: http://www.jckonline.com/2015/06/23/7-insights-todays-jewelry-shoppers

June 19, 2015

Will nearly 3M Apple Watches sold hurt Swiss watch industry? Meet some non-worriers

New York Business Journal
By: Teresa Novellino
June 18, 2015

It was meant to be a “debate “over whether the Apple Watch would impact the Swiss watch industry, but even the futurist on a Watch Collectors’ Roundtable panel assembled at the Aaron Faber Gallery in New York confessed to being a Rolex man.

Jason Alan Snyder, chief technology officer at global branding agency Momentum Worldwide, says he has tested out many versions of wearable tech, but tells time with a Swiss-made Rolex Datejust his father gave him which, combined with his smartphone screen, he considers to be “ample” for his day-to-day activities.

“The sort of capital you derive from wearing a timepiece is different from the sort of capital you derive from wearing a smartwatch.” Snyder said Tuesday night during a roundtable at the midtown Manhattan jewelry and vintage watch gallery. “Right now it’s the difference between luxury and utility and they’re very different ideas.”

According to a report just out today from Slice Intelligence, utility is selling to the tune of 2.8 million Apple Watches sold so far, with multiple bands being a popular add-on. Apple itself has never shared sales results on the watches, but yesterday it began allowing customers to actually buy the watches in store through a “reserve and pickup” service versus ordering them online.

The roundtable for watch enthusiasts, moderated by Randy Brandoff, founder and CEO of luxury watch subscription site Eleven James, was assembled to hash out concerns among collectors, retailers and others in the watch industry about the disruptive new entrant in a watch industry dominated by traditional players. Before the AppleWatch was released, the company’s design chief Jony Ive reportedly predicted the Apple Watch would mean trouble for the Swiss watch industry. Indeed, Apple stole a marketing page from the industry when stars like Beyoncé were shown wearing them. She posted a selfie of the gold version on Instagram.

Snyder pointed out that the functionality of the Apple Watch, particularly its ability to let people pay for items without out a credit card via Apple Pay would appeal to consumers seeking convenience. The health-related functionality is another lure. Wearables, in general, will evolve to become more incorporated in our lives, he said.

“I think the things we wear will become a part of ourselves in ways we can’t imagine,” he said. “The form it is taking now is a wristwatch, but it could also be something else, like a [miniaturized computer screen that you wear as a] contact in your eye.”

Some brands exhibiting in Switzerland at this year’s Baselworld, the world’s largest watch and jewelry show, met the Apple Watch challenge by saying they would be rolling out their own smartwatches. TAG Heuer, for instance, is partnering with Google and Intel on its version.

“I think it’s a huge over reaction, I don’t think there’s a place for it,” said Jeffrey Hess, CEO of Ball Watch USA. “There are a lot of watch brands that are afraid to not be on the boat.”

Hess, who ran an ad for his watches in Wired magazine, said he got a great response, which he interprets as proof positive that tech geeks like luxury watches too.

Others on the panel seemed similarly skeptical that the Apple Watch would actually eat into their sales. Among them was the roundtable’s host Edward Faber, co-owner of Aaron Faber Gallery, who said Millennial customers seek out the unique and collectible vintage mechanical watches that he sells.

“People want to distinguish themselves whether they’re in a business environment or social setting,” said Faber, author of American Wristwatches: Five Decades of Style and Design. “Soon, the Apple Watch will be everywhere but the luxury watch will continue to stand out.”

Milton Pedraza, chief executive officer and founder of the Luxury Institute, said he wouldn’t “discount the possibility of a surge,” in sales for the Apple Watch, but the first version didn’t seem like something that could compete with a Swiss timepiece. He sees it more a subcategory within the industry.

“The Apple Watch will evolve into something compelling. Today, it is not,” Pedraza said. He also predicted that Millennials, as they age, would become watch collectors, just like their Baby Boomer parents, even if they also own a smartwatch.

“It won’t be this or that, it will be this and that,” Pedraza said. “I see an opportunity to make this luxury [category] larger and I’m not worried about the watch industry at all.

But if the fears of Apple Watch competition have the Swiss watch brands concerned and reacting defensively, he sees it as good thing.

“If TAG Heuer fails, so be it,” he said. “They’ll be better off for it because they tried.”

Source: http://www.bizjournals.com/newyork/news/2015/06/18/will-3m-apple-watches-sold-hurt-swiss-watches.html?ana=twt

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