Luxury Institute News

July 14, 2011

Wealthy Online Shoppers Rank Top Fashion Designer Websites; Ralph Lauren Attracts Most Frequent Visits But Bally, Chanel and Tory Burch Earn Highest Overall Rankings

NEW YORK (Jul 14, 2011) – Shoppers earning at least $150,000 a year reveal specific likes and dislikes about websites operated by 24 of the world’s leading fashion design houses in the new 2011 Luxury Online Customer Experience Index survey conducted by the independent and objective New York City-based Luxury Institute.

Bally earns the highest overall composite score, followed closely by Chanel and Tory Burch.

Affluent consumers rated sites based on visual appeal, navigability, product selection, use of images and text in helping them better understand product features, security of personal data, ease of purchasing and access to customer service.

“Many luxury retailers execute good online experiences while others show dramatic room for improvement in specific areas like navigability or ease of use,” says Luxury Institute CEO Milton Pedraza. “Luxury consumers are the only true judges of online customer experiences. They are eagerly waiting for the first luxury fashion brand that will deliver a seamless and fantastic multichannel experience.”

Wealthy shoppers considered a total of 24 fashion design sites:

1. Balenciaga 13. Hermes
2. Bally 14. Hugo Boss
3. Brooks Brothers 15. Jimmy Choo
4. Burberry 16. Louis Vuitton
5. Calvin Klein 17. Marc Jacobs
6. Chanel 18. Michael Kors
7. Coach 19. Prada
8. Dior 20. Ralph Lauren
9. Dolce & Gabbana 21. Tommy Bahama
10. Ferragamo 22. Tory Burch
11. Giorgio Armani 23. Versace
12. Gucci 24. Yves Saint Laurent

For greater details about wealthy customer preferences on all criteria for each of the fashion designer websites, visit LuxuryInstitute.com.

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.

For Further Information, Please Contact:

The Luxury Institute, LLC
Martin Swanson
Vice President
(914) 909-6350
mswanson@luxuryinstitute.com

July 7, 2011

Wealthy Online Shoppers Rank Top Luxury Retailer Websites; Nordstrom Is Most Visited While Barneys, Bergdorf and Brooks Brothers Tie For First Place Along With Net-A-Porter

(NEW YORK) July 7, 2011 – Wealthy shoppers earning at least $150,000 a year weigh in on their most and least favorite luxury retail websites in the 2011 Luxury Online Customer Experience Index survey conducted by the independent and objective New York City-based Luxury Institute.

Affluent consumers rated sites based on visual appeal, navigability, product selection, use of images and text in helping them better understand product features, security of personal data, ease of purchasing and access to customer service. They also indicated how likely they were to return to the site and to recommend it to family and friends.

Based on 1-100 composite scores, the top-ranked luxury sites are those of Barneys, Bergdorf Goodman, Brooks Brothers and Richemont’s Net-A-Porter, each earning a score of 81. Nordstrom has the most frequently visited site, with 23% of respondents visiting Nordstrom.com in the past 12 months.

Wealthy shoppers considered a total of 16 retail sites:

Traditional Retailers:
-Barneys New York
-Bergdorf Goodman
-Bloomingdale’s
-Brooks Brothers
-Lord & Taylor
-Neiman Marcus
-Nordstrom
-Saks Fifth Avenue

Online Only:
-Bluefly
-eBay Fashion Vault
-Gilt Groupe
-HauteLook
-Ideeli
-Net-A-Porter
-Rue La La
-Shopbop

“Except for Net-A-Porter, key luxury multi-channel retailers significantly outperformed the pure online players, with the flash luxury sites being rated in the bottom tier,” says Luxury Institute CEO Milton Pedraza. “Although the pure online players are growing fast, it is becoming a commoditized product space where the only thing that matters will be long-term customer experiences as evidenced by high customer retention scores and increasing average spending. Net-A-Porter proves that it takes far more than content and algorithms to create lasting customer relationships. Online players should borrow a page from the Zappos playbook and create customer-centric cultures that Outbehave the competition. Customer-centricity is the sweet spot of success in the 21st century.”

For greater details about wealthy customer preferences on all criteria for each of the 16 online luxury retailers, please contact Martin Swanson.

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.

For Further Information, Please Contact:

The Luxury Institute, LLC
Martin Swanson
Vice President
(914) 909-6350
mswanson@luxuryinstitute.com

July 5, 2011

Wealthy Americans Upgrade into Pricier Primary Residences in Post-Bubble Housing Market, 37% Own Million-Dollar Homes; Vacation and Investment Property Purchases Also Pick Up Since 2008

(NEW YORK) July 5, 2011 – Amid still-depressed housing numbers that dominate headlines, a new survey by the independent and objective New York City-based Luxury Institute and the Institute for Luxury Home Marketing shows high net-worth U.S. homeowners taking advantage of the downturn to trade up into higher-priced new primary residences. More than one-third (37%) of the wealthy value their homes at $1 million or higher, while 32% assess their primary residence to be worth $500,000 or less.

Lured by lower prices, one in four U.S. consumers with annual income of $150,000 or more have bought a residential property since 2008 at a median purchase price of $509,000, up 3.2% from the 2005 to 2007 period. Most new residences (83%) are single-family homes and two-thirds of these are in suburban settings. Seventeen percent plan to purchase additional property this year, while 23% of those younger than 50 plan to buy in 2011.

Seventy percent of wealthy homebuyers used a real estate agent to help with their property purchase and two-thirds of those say that they would work again with the same agent.

“Luxury homebuyers recognize that many premium homes are available at relative bargains,” says Milton Pedraza, CEO of the Luxury Institute.  “Similar to the luxury retail landscape, luxury home sales provide more evidence of durability at the high end of the market.”

“Luxury is the good news story in real estate,” says Laurie Moore-Moore, CEO of The Institute for Luxury Home Marketing. “The number of wealthy households has jumped back to pre-recession levels and affluent home buyers are actively purchasing. The National Association of Realtors’ statistics show that national home sales at $1 million and above were up more than 18% year-over-year in 2010.  Strong activity continues this year as well.”

For complete details from this WealthSurvey on wealthy homebuyer attitudes, plans and marketing preferences, visit LuxuryInstitute.com.

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 The Institute for Luxury Home Marketing (ILHM) www.LuxuryHomeMarketing.com

ILHM is an international training and membership organization serving real estate professionals who work in the luxury housing market. ILHM awards the prestigious Certified Luxury Home Marketing Specialist (CLHMS) designation to those who meet strict performance criteria. The designation is the official designation for a variety of national and international real estate brokerage brands. ILHM training is available through live sessions and online.
214-485-3000
info@LuxuryHomeMarketing.com

For Further Information, Please Contact:
The Luxury Institute, LLC
Martin Swanson
Vice President
(914) 909-6350
mswanson@luxuryinstitute.com

Local entrepreneur makes luxury handbags accessible to women

By Silvana Ordoñez
Sun Sentinel
July 3, 2011

Despite the troubled economy — or perhaps because of it — Hollywood entrepreneur, Roberto Szerer, has found an unusual niche and a solid market for his new business: women on a tight budget who love designer handbags.

Last year, Szerer launched LuxeDH, an online boutique selling authentic secondhand luxury handbags for up to 50 percent off the retail price.

“A Louis Vuitton handbag that retails for $900, you can find it in our site for $500-$550,” said Szerer.

Since September 2010, the online business has been selling major designer brands such as Hermes, Chanel, Yves St. Laurent, among many others. His chief supply source: Women willing to sell their gently-used handbags for a few bucks.

Sabina Jacobs, the company’s chief buyer and authenticator, said the economic downturn has made room for the business because: “Women are not looking to spend so much money on designer handbags anymore.”

Milton Pedraza, an expert in high-end consumer spending patterns, said buying used luxury items is becoming a quite popular trend — especially among consumers who are not wealthy, but seek to project an image of wealth.

“A lot of young consumers who are either not earning as much after the recession or are unemployed or feel that there is a risk in their job still covet luxury goods,” said Pedraza, founder of the Luxury Institute, a New York based research firm focused on high-end consumption.

The trend is reflected on LuxeDH’s success. The company sells approximately 200 handbags weekly to buyers Jacobs has dubbed “recessionistas.”

Maggie Payen, of North Miami, is one of them.

“I’ve always bought brand new bags,” said Payen, who has already made two purchases from the company. “If I can find a secondhand [bag] that’s in good shape, why not?”

Payen said she has her eye on a third bag.

Jacobs said all the bags she buys are 100 percent genuine designer products and not knockoffs.”We’ve never sold a fake bag, ever,” she said.

She buys from women around the world who want to either “clean up their closets” or put money on their bank account.

Prices range from $99 to $2,000, which are still steep. But for women like Payen, who are used to paying around $900 for a medium-size Louis Vuitton purse and find it on the site for $500, it’s a good deal.

” I am saving like $300-$400. It’s worth it to me,” said Payen.

LuxDH offers its customers interest-free payment plans of three or six months — depending on the bag.

And if a customer is not happy with the bag, she can return it within five days of receiving the merchandise to get a full refund or 30 days for an exchange.

” My business is to make women happy,” said Szerer. ” We assure our customers that all our handbags are 100 percent authentic.”

http://www.sun-sentinel.com/business/fl-luxe-dh-20110701,0,1969308.story

July 1, 2011

Mobile marketing equally important for luxury consumers, employees: Luxury Institute exec

By Kayla Hutzler
Luxury Daily
June 30, 2011

NEW YORK – For luxury brands, integrating mobile marketing is just as important for employees as it is for consumers, according to a speaker at the Luxury Interactive conference.

Mobile should be a focus for luxury brands since data continues to prove that upscale consumers are downloading and using branded mobile applications at increasing rates. Mobile should also be used by sales professionals to increase productivity and create stronger customer relationships.

“In today’s highly commoditized luxury world, brands need to focus not only on outperforming the competition but also out-behaving them,” said Milton Pedraza, CEO of the Luxury Institute, New York.

“Ritz-Carlton, Apple and Nordstrom are not perfect, but the probability that consumers are going to have an extraordinary customer service experience with them is high, as compared to their competitors,” he said.

The Luxury Institute conducts research on wealthy consumer behaviors and spending habits and helps determine customer experience best practices.

Sales drool
Beneficial customer relationships can be formed more easily and at greater rates when employees use mobile devices.

“Mobile devices are for building [personal] relationships,” Mr. Pedraza said.

To optimize the use of mobile by employees, Mr. Pedraza suggested a few tips for luxury brands.

When an employee can access a customer’s past spending habits and provide him or her with personalized suggestions and support, a long-term customer relationship can be formed.

Hence, brands should look to create a customer database that employees can access via search on a mobile device.

For example, luxury department store chain Nordstrom recently revealed plans to start using iPod touch devices to quickly and effectively help customers check-out and find products in-store.

Inventory information for the sales professional’s store location, as well as nearby stores, should be available at the employee’s fingertips, as well as the option to order a particular item for a customer.

Employees should also have access to customer relationship metrics through mobile apps.

“We believe that you need to use these mobile devices to deliver real-time feedback to your sales professionals on data capture, net sales, products sold and clients,” Mr. Pedraza said.

“This is not just data or a mobile device, it is a great tool for sales professionals to self-assess and increase productivity,” he said.

Appy hour
Twenty-nine percent of wealthy consumers are downloading and using luxury branded mobile apps, according to Mr. Pedraza.

There are three main things that wealthy consumers expect from these apps: fast download time, exclusivity and customization options and easy access to customer service representatives.

“You need to find your point in mobile where you get the most leverage,” Mr. Pedraza said.

Overall, a brand’s ultimate goal should be to increase the customer experience.

Mobile apps should make it easy for consumers to research, shop, reach customer representatives and complete transactions.

“A brand’s focus should be to create extraordinary mobile experiences for both the sales associates and the customers,” Mr. Pedraza said.

“They can do this by focusing on what builds relationships and executing the fundamentals extraordinarily well,” he said.

http://www.luxurydaily.com/mobile-apps-equally-important-for-employees-consumers-expert/

With Facebook protest, Israeli consumers shift from talking the talk to walking the walk

By Yael Shpiller
JWT Intelligence
July 1, 2011

In a recent chat JWTIntelligence had with Luxury Institute CEO Milton Pedraza, he forecast that Facebook activism will expand from Egyptian-style political protest to consumers organizing short-term actions to force change. “Ralph Nader isn’t going to be one person anymore, it will be the collective action of people online using social media,” he said. A great example comes from Israel, where average consumers have banded together on Facebook to help put the high cost of cottage cheese on the national agenda.

The price of this beloved staple (now 8 shekels for a 9-ounce container, about $2.30) has almost doubled in the last few years, since the government stopped regulating prices on many dairy products. While we Israelis are not a nation of bans and protests—we tend to talk a lot but not do much—a Facebook event page calling for a boycott, started by a young cantor earlier this month, has more than 100,000 people “attending,” including some members of parliament. Extensive media coverage of the protest sparked national debate, and the government is discussing a deal with dairy brands and retailers to drop the price for a year as long as price controls are not resumed.

The cottage cheese uproar suggests a shift from civic to consumer activism on Facebook, with the social network utilized not only for social and environmental causes but to change the way brands act toward their stakeholders. Israelis are particularly active on the site (spending more time per month on social media than any other citizens, according to comScore), and it seems to be changing how consumers perceive themselves—as having real power and influence over brand behavior. Brands, especially those in industries whose customers are already aggravated, will need to think twice before moving forward with initiatives that negatively affect the average consumer, not only financially but emotionally. And as politicians become drawn into the debate, they’re learning that a happy consumer is a happy citizen, and vice versa.

http://www.jwtintelligence.com/2011/06/facebook-protest-israeli-consumers-shift-talking-talk-walking-walk-2/