Luxury Institute News

October 31, 2012

Ecommerce, deferred purchases to lessen Hurricane Sandy luxury retail freeze

By Tricia Carr
Luxury Daily
October 30, 2012

The hurricane brewing in the Northeast region of the United States has brought luxury retail and travel to a halt, but retailers are not likely to suffer as consumers shift purchases to ecommerce or are willing to wait it out for the in-store experience.

While luxury brand hotels in the affected regions could remain closed this week due to Hurricane Sandy’s arrival and after-effects, retailers can potentially sustain revenue during the storm through online and mobile commerce. However, affluent consumers and visitors to New York will likely postpone planned store visits and purchases in favor of storm preparation and only return to the in-store shopping environment that they prefer when they can.

“In terms of net, I do not think there will be much impact,” said Steven Dennis, president of SageBerry Consulting LLC, Dallas, TX. “Certainly, the next few days will be hit very hard, but that is likely just to delay purchases rather than eliminate them.

“I think we will see a minor shift toward ecommerce,” he said. “Most purchases will just be deferred several days or more depending upon how long stores are closed, but there will be some complete losses from the tourist business.”

Click the link to read the entire article which includes quotes from Milton Pedraza, CEO of Luxury Institute:
http://www.luxurydaily.com/ecommerce-deferred-purchases-to-lessen-hurricane-sandy-luxury-retail-freeze/

October 26, 2012

October 19, 2012

Survey: Watch, Jewelry Sellers Forge Best Relationships

By: Rob Bates
JCK Magazine

Stores that sell watches and jewelry forge stronger relationships with customers than retailers of other luxury goods, says a new survey of affluent consumers by the Luxury Institute.

The survey found that 49 percent of affluent consumers have strong relationships with their watch retailers—the highest level for any category—and that 40 percent have similar relationships with jewelry sellers. Men’s ready-to-wear was third, followed by handbags and women’s ready-to-wear.

As to how jewelry sellers established relationships with consumers, the largest number of respondents (37 percent) said the jewelers “made them feel comfortable.” Some 35 percent said the retailer “demonstrated they were an expert,” and 30 percent said “they were not too pushy or overbearing.”

These relationships pay off: Two-thirds of respondents who have relationships with specific sales professionals at jewelry brands say they purchase more as a result.

Milton Pedraza, CEO of the Luxury Institute, tells JCK that, as impressive as these numbers are, they should be higher, noting the importance of relationships to upper-income consumers.

“There is no reason that we shouldn’t cultivate a much higher level for relationship building,” he says. “In the luxury industry, they should be your jewelers for life.”

The survey queried U.S. consumers with at least $5 million in assets and $200,000 in annual income.

http://www.jckonline.com/2012/10/18/survey-watch-jewelry-sellers-forge-best-relationships

October 17, 2012

Luxury Institute exec: Humanize first, mobilize second

By: Rimma Kats
Luxury Daily
October 17, 2012

NEW YORK – A Luxury Institute executive at the Luxury Interactive 2012 conference said that brands must understand the value and potential of personal sales associate communications versus mass emails from corporate.

During the “Optimizing Mobile Technology to Build Customer Relationships” session, the executive addressed how mobile technology is not a differentiator, but a utility. Moreover, it is how marketers use the technology that matters.

“It’s all about the human-to-human relationships,” said Milton Pedraza, CEO of Luxury Institute, New York. “The biggest opportunity to use mobile to drive profits is customer relationship building.”

Click the link to read the entire article which includes quotes from Milton Pedraza, CEO of Luxury Institute: http://www.luxurydaily.com/luxury-institute-exec-humanize-first-mobilize-second/

High-Income Shoppers Talk Openly About Luxury Salespeople; Relationships With Wealthy Customers Blossom When Staff Shows Knowledge, Professionalism and Courtesy

(NEW YORK) October 17, 2012 – Wealthy shoppers with minimum annual income of $150,000 rank attributes they find important among people selling them high-end goods and services in the new Experiences With Luxury Salespeople WealthSurvey from the independent and objective New York-based Luxury Institute.

The most important attribute is knowledge, cited by 72% of respondents. Being professional (68%), and polite and courteous (65%), are also of high importance, followed by being honest (57%), helpful (56%), trustworthy (52%) and experienced (52%).

Relationships with individual salespersons are common, with 40% of shoppers reporting a primary point of contact for at least one luxury provider. Relationships are most prevalent in personal finance (11%) and jewelry (10%). Perhaps surprisingly, individual relationships are just as common in fashion (8%), as they are in autos, travel and beauty.

Respondents provided ratings of specific brands in ten categories with exceptional levels of sales service. Some of the standout performers are Lexus, Mercedes and BMW in automobiles, Marriott, Hilton and Ritz-Carlton in hospitality, Coach in handbags, Nordstrom in fashion apparel and Rolex in watches. Categories in which the highest proportions of wealthy customers cite exceptional service are jewelry and watches (31%), leisure travel (24%), and fashion apparel (24%).

“A strong Customer Culture has a halo effect on companies,” says Luxury Institute CEO Milton Pedraza. ”More than 75% of high-end shoppers recommend brands to family and friends based on outstanding experiences that they’ve had with a salesperson.”

Respondents reported average income of $310,000 and average net worth of $3.6 million.

About the 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.

October 11, 2012

Ultra-Wealthy Shoppers Spend More On Luxury Where They Maintain Personal Relationships; Pentamillionaires most likely to be close with specific sales professionals at Barneys, Bergdorf Goodman

(NEW YORK) October 11, 2012 – U.S. consumers with at least $5 million in assets and $200,000 in annual income share detailed opinions and observations about their relationships with salespeople in six luxury categories in the new 2012 Luxury Customer Relationship Index survey from the independent and objective New York-based Luxury Institute.

High-ticket categories show higher rates of customers who deal with a specific salesperson.  Watches (49%) lead all categories in terms of proportion of customers who maintain relationships with salespeople, followed by jewelry (40%) and men’s ready-to-wear (38%). There is a noticeable drop-off in rates of personal relationships at luxury retailers (30%), handbag brands (27%) and women’s ready-to-wear (21%).

Across categories, 70% of ultra-wealthy customers who transact and communicate with a specific salesperson say that this relationship causes them to spend more on goods and services in stores and on the Web. The biggest positive impact on sales comes when customers maintain relationships with salespeople in luxury retail, and in both men’s and women’s ready-to-wear categories.

In luxury retail, Bergdorf Goodman (51%) and Barneys (49%) enjoy the highest rates of maintaining relationships with ultra-wealthy customers, with larger chains like Bloomingdale’s and Nordstrom seeing lower incidence of relationships. In the middle are Brooks Brothers (36%), Neiman Marcus (32%), Lord & Taylor (30%), and Saks (26%).

“Luxury retailers know that relationships drive sales,” says Luxury Institute CEO Milton Pedraza. “The right hiring, education programs and Customer Culture help to promote more productive relationships and higher sales.”

About the 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.

October 3, 2012

Meet The Millennial 1%: Young, Rich, And Redefining Luxury

By: Larissa Faw
Forbes
October 2, 2012

Two Millennials walk into a bar wearing denim jeans, Converse sneakers, and carrying iPhones. They are identical except for one factor: one makes more than six figures a year, while the other is unemployed and lives at home. Affluent Millennials may be hard to pick out of a crowd, but they are redefining the luxury industry.

There are currently 11.8 million Millennials age 18-30 living in U.S. households with annual incomes exceeding $100,000, according to the Ipsos Mendelsohn Affluent Survey. Plus, never before has such a large group of young people been raised by wealthy parents: 34% of today’s Millennials have been wealthy throughout their lifetime, say American Express and the Harrison Group.

“There are more out there than you expect,” says The Luxury Institute’s Milton Pedraza. “If you are a 28-year-old working as a creative executive, you are making $130,000 a year and are most likely are single. It’s not as if you have a lot of assets. You might have some debt, but there’s still a lot of disposable income to go to technology, travel, and entertainment.”

Click the link to read the entire article which includes quote(s) from Milton Pedraza, CEO of Luxury Institute:
http://www.forbes.com/sites/larissafaw/2012/10/02/meet-the-millennial-1-young-rich-and-redefining-luxury/