Luxury Institute News

June 29, 2012

Nordstrom to get New York store at last

Nordstrom Inc is set to open its first department store in New York City in 2018, ending a 25-year search for a spot on the luxury world’s premiere stage.

By Phil Wahba
Reuters
June 28, 2012

The Nordstrom store will be 285,000 square feet and occupy seven stories at the base of what will become Manhattan’s tallest residential building, to be built on 57th Street, near 7th Avenue. The store is part of a deal with Extell Development Co, the upscale chain announced at a press conference on Thursday.

A full-service New York department store will give the chain exposure to the millions of tourists who flock to Manhattan and have bolstered business at rivals such as Saks Fifth Avenue, Macy’s Inc Bloomingdale’s, Neiman Marcus Group Inc’s Bergdorf Goodman and Tiffany & Co.

“It’s our desire to make this the absolute best Nordstrom store there is because we need to do that to be able to compete on this stage,” Pete Nordstrom, the chain’s president of merchandising, told reporters. He expects the Manhattan store to be the department store chain’s highest grossing location.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://www.reuters.com/article/2012/06/28/us-nordstrom-newyork-idUSBRE85R1A220120628

June 28, 2012

Wealthy Shoppers Don’t Buy into ‘Lux-Anthropy’

By Robert Frank
CNBC
June 27, 2012

The luxury world  is filled with talk about “social good.”

The wealthy are going Green, we’re told. They care about how companies treat their workers and communities. They prefer to practice responsible Lux-Anthropy, which maintains you can buy that expensive handbag or necklace and still feel good about its positive impact on mankind.

But apparently, there limits to Lux-Anthropy.

A new survey from the Luxury Institute shows that just 39 percent of consumers with more than $150,000 in income are willing to pay a premium for brands that champion high ethical standards.  And the number of affluent consumers who seek out ethical brands is down by 11 percent since 2007.

“Even wealthy consumers have de-emphasized social responsibility as this economy focuses everyone on price value and away from social issues,” says Luxury Institute CEO Milton Pedraza.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://www.cnbc.com/id/47979078

June 26, 2012

Social Responsibility Is Nice But Not Worth Paying for in Today’s Economy, According to Wealthy Consumers Surveyed by Luxury Institute

(NEW YORK) June 26, 2012 — In a new survey by the independent and objective New York-based Luxury Institute, “Corporate Social Responsibility: The Wealthy Consumer’s Viewpoint,” U.S. consumers earning at least $150,000 per year define socially responsible corporate behavior, rate companies and divulge importance of socially responsible practices in shaping purchase decisions. Responses were compared to those from the same survey in 2007.

Most (82%) wealthy Americans define social responsibility by a company behaving ethically with employees, customers and suppliers. Environmental behavior and philanthropic actions are both named by respondents as an essential component of CSR (58%).

Almost half (45%) of wealthy consumers say they seek out brands with high ethical standards, but only 39% of these shoppers would be willing to pay a premium. That’s down from 56% who would pay a premium in 2007. Apple, BMW, Coach, Lexus, Mercedes-Benz, Nordstrom, Starbucks and Whole Foods are frequently cited as highly ethical standouts.

Twenty-seven percent of wealthy consumers learn about companies’ socially responsible behavior via Facebook or Twitter. That’s up from 8% who received their information from social media in 2007. Reading news articles is the most popular (52%) way to learn of CSR efforts, down from 64% five years ago.

“Even wealthy consumers have de-emphasized social responsibility as this economy focuses everyone on price/value and away from social issues,” says Luxury Institute CEO Milton Pedraza. “Nevertheless, we see that luxury and premium brands that are socially responsible do better even during recessions because doing well by doing good is a universal and timeless concept.”

Respondents reported average income of $307,000 and average net worth of $3.1 million.

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.

June 5, 2012

Rolex Is Most Popular Pentamillionaire Luxury Watch Brand, but Breguet, Patek Philippe and Boucheron Rank Higher for Status

(NEW YORK) June 5, 2012 — U.S. shoppers earning at least $200,000 per year with minimum net worth of $5 million rank Breguet highest among 27 luxury watch brands in the 2012 Luxury Brand Status Index (LBSI) survey conducted by the independent and objective New York-based Luxury Institute. LBSI scores comprise respondents’ evaluations of each brand’s products, customer service experience and reputation.

With the top overall LBSI score of 8.13 out of 10, Breguet ranks first for superior product design, customer service experience and brand reputation. Creating time pieces since 1775 and now part of Swatch Group, Breguet is also identified by the ultra-wealthy as a brand “purchased by people I admire and respect.” It also ranks highest as the brand wealthy consumers are most likely to purchase (75%) when buying their next luxury watch.

Rolex, with a 7.96 LBSI score, ranks a close fourth for overall brand status behind fellow Swiss watchmaker Patek Philippe (8.05), and Paris-based Boucheron (7.99). Rolex is by far the brand most purchased (9%) by pentamillionaires in the past year, 4% have bought a Patek Philippe, 2% have purchased a Breguet and 2% have bought a Boucheron. In addition, 52% of wealthy shoppers are familiar with Rolex making it the best-known luxury watch brand.

“Fine materials and workmanship are absolutely essential for luxury watchmakers, but those at the top of the rankings differentiate themselves with excellent service and a superior customer experience,” says Luxury Institute CEO Milton Pedraza. “Consistent execution on all of these criteria builds brand value.”

Survey participants reported average income of $682,000 and average net worth of $14.6 million.

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.