Luxury Institute News

March 27, 2012

67pc affluent smartphone owners use mcommerce: study

By Rachel Lamb
Luxury Daily
March 26, 2012

More than two-thirds of affluent consumers who own a smartphone have used their mobile device to shop for products and services, but since they prefer the in-store experience, luxury brands have to start creating humanistic experiences on mobile.

Preference for the in-store experience, the cornerstone of luxury marketing, is the main reason why smartphone owners say they do not buy products through mobile. Mobile applications are the most common form of engagement for affluent consumers, indicating that luxury marketers need to step up the in-app experience.

“Consumers are becoming so much more mobile and we need to figure out how to translate that mobility into a humanistic experience,” said Milton Pedraza, CEO of the Luxury Institute.

“Apps are becoming ubiquitous, so it’s what we do with them that make the experience more extraordinary that will make the difference,” he said. “How the app is being used by the consumer or to contact someone who represents the brand is now where the real opportunity lies.”

The Luxury Institute study was conducted over the first quarter of 2012.

Respondents reported an average net worth of $2.8 million.

Complicated commerce
Of the 67 percent of affluent consumers who shop via mobile, 63 percent of them have made purchases in the past 12 months, according to the study.

Furthermore, wealthy consumers who made purchases spent an average of $628.

Event tickets, gift cards, food and technology/personal electronics are the most-common type of mobile purchase, according to the study.

Preference to the in-store experience is the most-used reason for not making a mobile purchase.

However, other issues include “privacy and security issues,” “it seems complicated,” “the brands I purchase from do not offer mobile shopping” and “I don’t know how.”

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

Appetizing
Of the 60 percent of affluent consumers in the United States who have a smartphone, approximately 73 percent of them use apps at least once per day, according to findings from the Luxury Institute.

Affluent consumers are using apps including Facebook, Angry Birds and Words With Friends, making them a prime spot for luxury mobile marketing. However, most high-end brands are not fully grasping the urgency that they not only need to be in mobile, but the leading innovators.

Of affluent consumers who own a smartphone, 80 percent of wealthy U.S. consumers report that they have downloaded an app.

Navigational and entertainment apps are the types of apps most frequently downloaded, including Facebook, Angry Birds and Words With Friends.

That said, these apps provide opportunities for luxury marketing. In fact, some brands have already taken advantage.

For example, department store chain Nordstrom is targeting aspirational consumers through mobile banner advertisements for its Nordstrom Rack locations in the popular gaming application, Words With Friends.

In addition, New York-based department store Bergdorf Goodman used Words With Friends to drive foot traffic to its store with a location-based banner ad promoting an in-house event.

However, what these results are telling marketers is that it is not just young consumers who enjoy gaming apps. The respondents of the study – older, more affluent consumers – are still citing Angry Birds, Facebook and Words With Friends as their favorite apps.

However, there is a fine line between marketing to adults and aspirational consumers.

“Brands do need to be as engaging as social media, but they cannot be gimmicky – they must be honest and real,” Mr. Pedraza said. “It is surprising that Facebook and games have reached all consumers, not just the young.

“That said, it is hard to extrapolate data over the next few years when technology and behavior are spending so quickly,” he said. “The speed of change among all consumers, not just the young but the old and affluent, is very quick.”

http://www.luxurydaily.com/67pc-affluent-smartphone-owners-use-mcommerce-study/

March 23, 2012

Wealthy U.S. Smartphone Users Reveal Details on Shopping, Spending and Use of Mobile Apps; Facebook, Angry Birds and Words With Friends Top List of Favorite Apps

(NEW YORK) Mar 22, 2012 — For the newly released WealthSurvey, “Mobile Apps And Commerce Among Wealthy U.S. Consumers,” the independent and objective New York City-based Luxury Institute, in conjunction with mobile agency Plastic Mobile, interviewed U.S. consumers earning at least $150,000 per year about their smartphones and how they use them for shopping and entertainment.

Apple is the dominant smartphone brand for high-income users. Of the 62% of wealthy Americans who own a smartphone, 45% have an iPhone, 35% use an Android-based device, and 25% own a BlackBerry.

More than 80% of wealthy smartphone users have downloaded mobile apps to their phone, and the most popular categories of downloaded apps are weather (63%), news (51%), travel (42%), business/finance (39%) and sports (34%). Wealthy users have downloaded an average of 15 mobile apps and use half of them frequently. Almost half (48%) of affluent consumers use five or fewer apps on a regular basis.

Facebook is the app used most frequently by wealthy smartphone users, followed by weather apps, maps, Google and the Safari browser. Facebook is also the app that wealthy smartphone users say is their favorite. Nearly as popular are the games Angry Birds and Words With Friends.

Top reasons for not downloading apps are lack of interest (49%) and a desire to keep phone functionality simple (32%). Not wanting to pay is a reason cited for not downloading apps by 20% of wealthy smartphone users, but 59% have paid for applications and 55% of those who have downloaded free apps have upgraded to pay versions. Two in five wealthy users are willing to pay for apps priced between $0.99 and $1.99, while 23% are okay with paying between $2 and $4.99 for a mobile app. Only 18% would pay more than $5.

With regard to commerce, 67% of wealthy smartphone users shop on their devices and 63% regularly buy goods or services. Half of shoppers make purchases at least monthly, with almost 80% spending more than $100 on mobile phone transactions in the past year, and 25% spending in excess of $1,000. Event tickets (39%), gift cards (29%), and food and electronics (both 27%) are the top purchase categories.

The chief reason for not shopping on mobile phones is preference for the in-store experience, cited by 51% of users who do not use their device for commerce. Another 29% say that privacy issues keep them from making purchases on their phones.

“The study showed an incredible opportunity for mobile in luxury,” says Melody Adhami, president and COO of Plastic Mobile. “Not only are affluent Americans using mobile, but they are really taking advantage of its benefits, with more than 80% of consumers downloading apps.”

“Smart luxury firms recognize the potential of their mobile presence to boost sales and get closer to their customers,” says Milton Pedraza, CEO of the Luxury Institute. “Customers clearly view smartphones as part of the new shopping experience.”

Respondents reported an average net worth of $2.8 million.

For details from this WealthSurvey and others, 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.

Edward & Vivian: 22 Years of Sound Advice for Luxury Brands

By Simon Bowthrope
Business 2 Community
March 22, 2012

Although it’s evidently true that most luxury brands are underutilizing mobile media, there is another area that continues to baffle me about the way certain luxury brands continue to relate to their potential customers.

Bear with me. Let’s go through the whole process of putting a luxury product on a person’s body, in their hand or on their wrist.

Start with an outstanding brand name with a heritage that has cost years of hard work, publicity and media investment to maintain.

On many occasions, a well-known designer or couturier who is heading up the creative process.

Painstaking attention to detail, quality, materials, design and packaging to produce a unique and extraordinary product that drives consumers to seek it out and purchase it and others to dream and read about it.

Add social media marketing to the mix. For luxury brands this is particularly difficult because most of the people who have an opinion about the brand are not actually consumers of it.

Now take a look at the point of purchase: if you look at the average customer experience, it’s surprising that some luxury brands have any customers at all.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://www.business2community.com/branding/edward-vivian-22-years-of-sound-advice-for-luxury-brands-0151393

 

March 14, 2012

What’s with the luxury brand executive switch-up?

By Rachel Lamb
Luxury Daily
March 13, 2012

Quite a few luxury brands including Givenchy, Tory Burch, Fisker, Yves Saint Laurent and Tod’s are shifting around major executives, making experts wonder whether this bodes well or poorly for the industry.

A change in executives can be refreshing – it gives a brand a fresh set of eyes and ideas and could yank out a toxic leader. However, the process of choosing new executives is crucial because the incoming leader must align himself or herself with a brand’s values and personality to succeed.

“Executives have weathered through the recession and people are a little fatiqued,” said Milton Pedraza, CEO of the Luxury Institute, New York. “Brands are looking for new skills – international, customer experience, digital, but there are always lots of changes.

“After the recession, people are tired and they want a change of pace,” he said. “I think that most brands are becoming more customer-centric, which is a new thing for luxury brands, and very important.”

Switching it up
Luxury brand executive switch-ups have frequented fashion and finance news sites over the past few months.

For example, former Chrysler chief executive Tom LaSorda was named CEO of Fisker Automotive.

Mr. LaSorda was named vice chairman of the company in December after he left Chrysler in 2009.

Meanwhile, former co-chair of Tory Burch, Chris Burch, also stepped down this past month, leaving ex-wife, creative director and brand namesake Tory Burch as the sole chair of the company.

Mr. Burch is a shareholder, but he is allegedly looking to sell his remaining shares, according to the New York Post.

Additionally, Sebastian Suhl was tapped by LVMH Moët Hennessy Louis Vuitton’s Givenchy as its new CEO.

This move could be considered shots fired, since Mr. Suhl left rival Prada Group for LVMH.

That said, LVMH frequently switches around executives in the family.

For example, there is talk of current Louis Vuitton creative director Marc Jacobs moving to sister brand Christian Dior.

However, Yves Saint Laurent announced yesterday that former Dior Homme executive Hedi Slimane is returning to PPR from LVMH.

“The luxury business is pretty incestuous,” said Pam Danziger, president of Unity Marketing, Stephens, PA. “People tend to cross paths, work with [and] then work against each other throughout their careers.

“It is no wonder that when one person starts to move that sets up a chain of people switching up [and] moving around,” she said.

“While the press on the luxury brands still remains very positive, the fact is the growth we are seeing is coming at a high price to other competitors.

“So brands are looking for any edge they can get, and sometimes they see getting an executive from the competitor’s ranks will do the trick.”

Follow the leader
Although stealing a high-powered leader from a competing brand could irk other leaders, the process of selecting an executive is crucial to maintaining the brand DNA and image.

“Good brand stewards will understand the brand DNA, but they will also realize that the brand is bigger than they are,” Luxury Institute’s Mr. Pedraza said. “All of the changes and improvements need to be in alignment with the brand image.”

Some brand executives have severely embarrassed brands and collaborations.

For example, former Dior creative director Galliano was allegedly caught on tape spewing religious, racial and ethnic insults, according to various reports. In addition to losing his tenure position at Dior, he was also unable to continue working at the self-labeled brand John Galliano, which is also owned by Dior.

However embarrassing its former employee was for Dior and LVMH, the brands still thrive today.

It is the board leaders’ job to make cuts and decisions about executives who could fatally hurt a brand’s image.

However, this does not just include axing creative directors who insult people on camera. There are a variety of other choices to make when creating a brand director.

“Leaders who are toxic or whose skills are obsolete should not be hired,” Mr. Pedraza said. “Also, leaders who are not adaptable do not have a place.

“I think that people want inspirational leaders now, not authoritative and selfish,” he said. “Leaders who have a bigger purpose in building brands and companies and are not just out there to get money are who we need to look out for.”

http://www.luxurydaily.com/what%E2%80%99s-with-the-luxury-brand-executive-switch-up/

March 8, 2012

Atlantic Trust Recognized as Industry Leader for Private Client Investment Platform

(ATLANTA) March 7, 2012 — Atlantic Trust, the private wealth management division of Invesco Ltd. (NYSE: IVZ), has been recognized by Private Asset Management (PAM), a financial services industry trade publication, as having the Best Private Client Investment Platform–Performance among firms with more than $5 billion in assets under management (AUM). The 2012 PAM Awards were announced on February 7 at a ceremony in New York.

“This award is a significant accomplishment and reflects Atlantic Trust’s unwavering commitment to investment excellence,” saidJack Markwalter, chairman and CEO of Atlantic Trust. “We manage strategies on a proprietary basis where we have a competitive track record, and we also search globally for institutional-quality, external portfolio managers with strong, risk-adjusted returns.”

“Our investment philosophy is centered on the idea that the best way to help families preserve and grow their wealth is through global diversification among asset classes and investment strategies,” said David Donabedian, CFA, chief investment officer of Atlantic Trust. “To achieve these results, we have designed a disciplined asset allocation process and hybrid investment model that combines proprietary and external investment offerings. Because we’ve used this approach for decades, we have an experience edge that gives our clients outstanding access to leading investment managers in all asset classes.”

PAM annually invites firms to compete for awards in several categories, and then a panel of independent industry experts selects the nominees and winners.  PAM says that it considers the following criteria when selecting the winners of these awards:

  • Financial progress: candidates must be able to demonstrate performance track-records over the course of the last twelve months
  • Growth: client numbers, internal hires and geographic expansion
  • Client satisfaction: provide evidence of client satisfaction, including anecdotes and direct client statements
  • Product innovation: details of new services and products launched over the course of 2011

This recognition builds on the strong momentum Atlantic Trust brings into 2012, following a year of national recognition, including the firm’s 2011 PAM win as Best Private Wealth Manager in Overall Client Service and recognition as the Top U.S. Wealth Management Firm by The Luxury Institute.

Any reference to a ranking, a rating or an award provides no guarantee of future performance results, and is not necessarily indicative of any particular client’s experience and is not constant over time.  In 2012, Atlantic Trust was selected by PAM for the award of “Best Private Client Investment Platform – Performance” based on information provided by Atlantic Trust. 10 firms entered the category for this award and 4 firms were shortlisted, of which Atlantic Trust was the only firm selected for the award.  The specific criteria PAM used to determine the award is considered proprietary and could not be obtained. In response to PAM’s question about “how [we] have developed our [investment] offering in 2011″ regarding “product innovation, performance and how [we] dealt with the challenges of the last year,” Atlantic Trust provided an overview of our investment approach and recent asset allocation recommendations, as well as highlights of proprietary performance.  Atlantic Trust provided detailed performance information for the Atlantic Trust Disciplined Equity Strategy.  Atlantic Trust did not provide detailed performance information with respect to the more than 50 other proprietary and externally managed strategies available on our platform. Thus, the reference to “investment platform – performance” in the award should not be misconstrued as suggesting that PAM conducted a comprehensive review and analysis of the performance of all of the strategies on our platform.

In 2011, of the five firms shortlisted by PAM for the “Best Private Wealth Manager in Overall Client Service” rating, Atlantic Trust was the only firm selected for the award. For more information, visit www.pammagazine.com.  In 2011, The Luxury Institute, aNew York-based research firm, conducted research among 500 pentamillionaires (defined as wealthy consumers with a minimum annual income of $200,000 along with a minimum net worth of $5 million) about their opinions of luxury brands

The Luxury Institute ranked Atlantic Trust No. 1 among 35 private wealth management firms based on quality, exclusivity, social status and self-enhancement with an LBSI score of 6.96 out of a maximum possible 10. Sample base: Wealthy Consumers familiar with each firm. . For more information, visit www.luxuryinstitute.com.

http://www.prnewswire.com/news-releases/atlantic-trust-recognized-as-industry-leader-for-private-client-investment-platform-141758083.html

 

March 3, 2012

Lapostolle Blind Tasting With Cuvee Alexandre Cabernet Sauvignon

Tasting demonstrated quality of this New World wine and discussed trends in the luxury market

(NEW YORK) March 2, 2012  —  Lapostolle, the Marnier Lapostolle family-owned premium winery inChile, hosted a blind tasting with their Cuvee Alexandre Cabernet Sauvignon 2008 and 2009 vintages.  Held at the Astor Center in New York City on March 1st, the tasting pit Lapostolle Cuvee Alexandre Cabernet Sauvignon, a wine consistently rated at 90 points and above, against other top Cabernet contenders, both at price parity and far exceeding the cost of the Lapostolle marque.

The tasting opened with a presentation by Milton Pedraza, CEO of the Luxury Institute, who discussed how luxury is perceived today.  In the uncertainty of the current economy, the concept of luxury is being redefined to mean quality, excellence, consistency and a demonstrable superiority when measured against others in its class.  Savvy consumers no longer define fine wines by their cost, but rather by quality, taste and refinement.  Experts predict that wine buyers will be ever more likely to trade up from popular price points under $20 for better quality and taste, and the $25 tier is projected to rise in sales.

The blind tasting was conducted by Master of Wine Sheri Sauter Morano, with media attendees given the opportunity to taste and rank the wines.  At the conclusion, Sheri revealed the average of all the rankings, listed below beginning with the most favorably ranked wine and ending with the least favorably ranked wine:

  • 3.9 – Lapostolle Cuvee Alexandre, Cabernet Sauvignon 2008, Colchagua Valley USD $25
  • 4.0 - Jordan, Cabernet Sauvignon 2007, Alexander Valley USD $45
  • 4.3 - Joseph Phelps, Cabernet Sauvignon 2008, Napa Valley USD $60
  • 4.3 – Silver Oak, Cabernet Sauvignon  2007, Alexander Valley USD $73
  • 4.5 – Caymus Vineyards, Cabernet Sauvignon 2009, Napa Valley USD $75
  • 4.5 – Beringer, Cabernet Sauvignon 2009, Knights Valley, USD $25
  • 4.9 – Lapostolle Cuvee Alexandre, Cabernet Sauvignon 2009, Colchagua Valley USD $25
  • 5.6 – The Montelena Estate, Cabernet Sauvignon 2007 USD $135

“Blind tasting is always a wonderful equalizer.  This tasting was a great opportunity to challenge assumptions and make new discoveries. I think that the Lapostolle Cuvee Alexandre Cabernet Sauvignon is a fantastic example of the kind of excellent, top-quality wines being made in Chile today that deliver not only on taste, but on value for the consumer as this tasting clearly demonstrated,” says Sheri Sauter Morano MW.

“We were excited with results from this blind tasting and to demonstrate that, with a suggested retail price of $25, our wines truly play on the world stage; and equal in quality to brands costing far more than our Cuvee tier,” says Pamela Broyles, North American Marketing Manager.

Milton Pedraza says, “Lapostolle is a wonderful example of delivering true discernible value to post-recession consumers who demand legitimacy from luxury products.  The results of this tasting coupled with the authenticity and strong family history behind the Lapostolle label truly demonstrates that the Cuvee Alexandre tier is worthy of consideration as luxury consumption evolves.”

Cuvee Alexandre Cabernet Sauvignon 2008 and 2009 are available nationwide (SRP $24.99 / 750ml).

http://www.prnewswire.com/news-releases/lapostolle-blind-tasting-with-cuvee-alexandre-cabernet-sauvignon-141185693.html

What DiorMag says about the brand

By Rachel Lamb
Luxury Daily
March 2, 2012

French fashion label Christian Dior announced the launch of DiorMag, an online magazine that positions the brand as an innovative storyteller, entertainer and purveyor of the height of luxury products.

DiorMag is available as a section on the Dior Web site and includes articles, images, current news and product galleries. DiorMag has the potential to secure brand loyalists and drive transactions, per experts.

“I think what the magazine does is that it tries to  create a lot of relevant and interesting content about the brand and the people behind it,” said Milton Pedraza, CEO of the Luxury Institute, New York. “Therefore, it’s a great vehicle for storytelling that educates and entertains consumers and that enhances the opportunity to have consumers be loyal to the brand because they know the story behind it.

“It meets the criteria for great content, it’s not purely infomercial,” he said. “In this case, it’s well-optimized because it’s telling its own stories with objectivity and decorum, not just a hard-sell.”

Mr. Pedraza is not affiliated with Dior, but agreed to comment as an industry expert.

Dior did not respond before press deadline.

Dear Dior
DiorMag is split up into a few sections including report, monsieur Dior, Dior over the world and all about Dior.

In those sections are topics including woman, Dior Homme, baby Dior, fragrance, makeup, skincare, jewelry, timepieces and Dior phone. These are the sections of the Dior Web site.

Clicking on a topic or section pulls together all of the relevant articles.

One article currently on-site is “in real time,” a live-stream of the fall/winter 2012-2013 ready-to-wear collection today at 9:30 Eastern Time.

Another piece is “Miss au Pluriel,” a video and image gallery of brand ambassador Mila Kunis and the Miss Dior handbag campaign (see story).

The story “2012-1947: Now, then and back again” fully relays the history and depth of the Dior brand, which is a very important part of the magazine.

“Most media is undergoing rapid transformation today as digital convergence keeps lending to new ways for storytelling. interaction and innovation,” said Paul Farkas, president/CEO of Social.TV, New York.

“Luxury brands are now all high-powered media houses and digital magazines are one key way to attract consumers with enhanced and extended content,” he said.

Storied telling
DiorMag is one in a few brands that are upping connectivity through online publications.

For example, French fashion brand Chanel’s Chanel News site has a presence as its own site as well as on the brand’s mobile application.

Consumers can learn about the brand history, catch up on current news and see exclusive content.

In fact, Chanel’s new video for its Boy handbag collection, “My New Friend Boy” was released on the Chanel News site (see story).

In addition, Christian Louboutin has its own “Louboutin Times” newspaper that it uses to relay information and exclusive content.

“This is the next generation of digital marketing,” said Chris Ramey, president of Affluent Insights, Miami.

“Ease of shopping, along with speed and pleasure, add value to luxury brand magazine,” he said.

However, there are some drawbacks to a digital magazine.

“There are some clunky areas that will be fixed, and their contents page will become more attractive,” Mr. Ramey said. “A couple times I found myself back on the site rather than the magazine – and it wasn’t always natural where to explore next.”

However, Dior, Chanel and Louboutin have something that other brands do not – their history.

Legacy and heritage are two of the main weapons that old luxury brands have in their arsenal, per Luxury Institute’s Mr. Pedraza.

“This isn’t for every brand,” Mr. Pedraza said. “If you’re not well historically-endowed, you’ll have a hard time getting this across.

“However, Dior is fortunate that it has this legacy that it can draw on and contemporize,” he said.

http://www.luxurydaily.com/what-diormag-says-about-the-brand/

March 2, 2012

Haute Wine Event: Lapostolle Cuvee Alexandre Cabernet Sauvignon Tasting Challenge

By Ashley Joy Parker
March 1, 2012
HauteLiving.com

On March 1st, Astor Center played host to  a unqiue wine tasting event that  pitted the Lapostolle Cuvee Alexandre Cabernet Sauvignon against other top contenders, both at price parity and rising far above the cost of the Lapostolle marque.

Conducted by Master of Wine Sheri Sauter Morano, members of the press were given the oppuntity to blind taste eight different Cabernet Sauvignons and rank them according to appeaearnce, nose and pallet and overall drinkability.

The Lapostolle Cuvee Alexandre Cabernet Sauvignon 2008 ( $25 a bottle), a wine consistently rated at 90 points and above, against other top contenders, both at price parity and rising far above the cost of the Lapostolle marque was awarded the top rating overall rating beating out such price-point power players as Caymus Vineyards, Cabernet Sauvignon 2009, Napa Valley ($75) and The Montelena Estate, Cabernet Sauvignon 2007 ($135), which was ranked dead last.

As a special treat, CEO of the Luxury Institute, Milton Pedraza, was on hand to speak about how luxury is perceived today, specifically how consumers are spending their hard-earned money.

“It’s not all about showing off anymore. The most expensive wine isn’t always the best,” said Pedraza. “It is about brand consistency and value.”

http://www.hauteliving.com/2012/03/haute-wine-event-lapostolle-cuvee-alexandre-cabernet-sauvignon-tasting-challenge/