Luxury Institute News

January 21, 2011

Younger, digitally engaged consumers exhibit upscale shopping behavior: study

By Elizabeth Zelesny
Luxury Daily
January 20, 2011

Consumers who are single tend to have a higher disposable income and this audience represents significant buying power for luxury brands.

A study by International Demographics titled “The Media Audit” reveals that social media Web sites such as Facebook and Twitter have reached critical mass with consumers who are in important life stages.

“Younger people are more digitally engaged,” said Milton Pedraza, CEO of The Luxury Institute, New York. “They have more time than older people with families and over time, as people get older, they have less time to use Facebook and Twitter.”

International Demographics develops syndicated research studies for the marketing, communications and media industries.

The study was conducted among 65,000 consumers, skewing more towards those who are younger and single, or who have young children living at home who frequently visit Facebook and Twitter.

Findings
According to The Media Audit report, 51 percent of U.S. adults surveyed have visited Facebook or Twitter in the last month.

However, among adults who are under 35 and single with no child, 80 percent have visited these sites.

The report also reveals that these same adults have extremely active lifestyles and exhibit upscale shopping behavior.

In addition, these single consumers are less likely to own a home, which in turn, frees up more income.

According to the study, this group is 25 percent more likely than the general population to shop at Neiman Marcus and 20 percent more likely to shop at Nordstrom.

Adults who are under 25, with no children and single are 12 percent less likely to be heavily exposed to outdoor billboards, 52 percent less likely to be heavily exposed to a newspaper and 13 percent less likely to be heavily exposed to television.

Critical factor
Age plays a major role in how likely a person is to engage in social media, but important demographic characteristics also matter.

Life stages of a consumer and their ability to use social media, as well as their concerns as shoppers, make them of interest to marketers.

Even though young, single consumers without children are more likely to shop at upscale retailers than the general population, Mr. Pedraza believes they are not the most important customers.

“One thing I would guarantee is that they are not likely to spend more than people in their 40s and 50s,” Mr. Pedraza said. “They are probably likely to have a lower transaction spend than the older population. They are not the heavy buyers.

“They may be more likely to shop at these department stores,” he said. “But by no means are they the most important shoppers at these stores.”

http://www.luxurydaily.com/single-adults-are-25pc-more-likely-to-shop-at-neiman-marcus-than-general-population-study/

Unloading the loaded

Catering to the whims of the rich is big business

The Economist
January 20, 2011

The seven-star Burj-al-Arab hotel in Dubai is not for those who like their elegance understated. The presidential suite is an explosion of gold, purple, marble and opulence. Some guests prefer it to the even more expensive royal suite (which is $18,000 a night), says a helpful member of staff, because the decor in the royal suite is even livelier.

When you are seriously rich it is hard to spend all your money, but some creative people will help you try. Quintessentially, a firm founded by Ben Elliot, a nephew of the Duchess of Cornwall, specialises in giving the rich whatever they want, wherever they are. Some requests-tea with Britain’s queen, for example-can be a bit difficult, says Mr Elliot. But if a client needs a life-size edible cake costume for a birthday bash, or wants to fly along the Great Wall of China, his global network of fixers will fix it.

The financial crisis hurt sales of luxury goods, which fell by 8% in 2009. But Bain, a consultancy, estimates that in 2010 they grew by 10% worldwide, and by an astounding 30% in China, where the boom barely faltered. In the West the rich have cut back on ostentatious baubles and instead gone for experiences, such as yoga retreats in India or personal coaches to teach them about Buddhism, says Milton Pedraza of the Luxury Institute, a consultancy. China’s new millionaires have no such qualms. One retailer there started selling Smart cars covered in Swarovski crystals last year.

What the rich lack is time, says a former personal assistant to celebrities. They may decide to go for a weekend in Thailand on the spur of the moment, and the personal assistant has to make it happen. Another popular time-saver is a medical concierge service. PinnacleCare, for example, will send a doctor “to your home, your office [or] your ski chalet”, says Bruce Spector, the founder.

Rich people also want help with handling their money. Creating a fortune is often fun, but conserving it can be tedious, says Charles Lowenhaupt, an adviser to the wealthy. A family may have 100 members scattered over multiple jurisdictions and 150 trusts, making tax planning a trifle complex.

Yet the basic problems are the same everywhere. Mr Lowenhaupt recalls an acquaintance from China teaching him a Chinese saying, “rice paddy to rice paddy in three generations”. The acquaintance was surprised to learn that other cultures have similar proverbs.

http://www.economist.com/node/17929047?story_id=17929047&fsrc=rss

January 19, 2011

News Release: MBS Announces Strategic Partnership with the Luxury Institute

Firms Align to Offer Unique Consumer Insight to Luxury Brand Retailers

CENTRAL ISLIP, NY, January 19, 2011 – MBS, a premier provider of customer database marketing solutions within the GSI Commerce (Nasdaq: GSIC) Global Marketing Services division, has announced a strategic partnership with the Luxury Institute, a key provider of independent primary research and consulting services to the luxury marketing sector.

MBS and the Luxury Institute will collaborate to offer luxury marketers knowledge-based products and services that drive unique consumer insights and deliver business intelligence to decision makers across their enterprises.

Barbara Von Euw, director of CRM and Database Management for David Yurman, stated, “The collaboration between MBS and the Luxury Institute resonates with luxury marketers because it brings together the culture and science of CRM.  We look forward to identifying and executing joint consumer intelligence projects that will help us build brand equity among our valued customers.”

Together, the partners will leverage MBS’ core strategic and analytical services and the Luxury Institute’s array of luxury brand and customer experience research to build compelling business cases for enterprise-wide cultural CRM initiatives. 

“MBS is excited to work with the Luxury Institute to enhance our luxury practice offerings with innovative products and services that combine the strengths of each of our organizations,” commented David Braunstein, senior vice president of Strategic Services for MBS. “The Luxury Institute’s exceptional primary research studies, consulting services and cultural CRM expertise, along with MBS’ strategic and analytical capabilities enable us to create compelling new observations about affluent consumer preferences and behaviors.”

Milton Pedraza, CEO of the Luxury Institute observed, “MBS offers their luxury clients a critical customer-centric point of view that dovetails perfectly with the primary research and consultative initiatives we offer.  We know from experience that luxury brands that embrace a luxury CRM culture and establish operational CRM initiatives will garner far more revenue and profit growth than their competitors.  MBS’ capabilities will help us both implement and measure the luxury CRM Culture initiatives we so strongly espouse.”

About the Luxury Institute
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. 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 MBS
Founded in 1967, MBS offers a range of outsourced direct marketing services, including: strategic services for goal setting, measurement, and meaningful data identification and patterning; analytical solutions that help clients optimize marketing program response, revenue, and efficiency; customized database solutions enabling marketers to access a holistic view of a customer’s multichannel activity; and customer data integration services, including merge/purge, address hygiene, and proprietary processes.  MBS has longstanding relationships with many of the world’s leading multichannel retailers, including: Tiffany & Co., Things Remembered, Bloomingdale’s, David Yurman, and Brooks Brothers. MBS is a wholly owned subsidiary of e-Dialog, a GSI Commerce Global Marketing Services company. For more information, please visit http://www.mbsinsight.com.