Luxury Institute News

March 29, 2013

Courting Roger

Moët & Chandon is the latest luxury brand to sign Roger Federer as their ambassador. What does he have that they all want? Laura Archer meets him in Dubai to find out

By Laura Archer
March 2013

When it comes to putting on a show,  Dubai knows how to pull out all the stops. Its “more is more” mantra has made it a city of superlatives—the biggest this, the tallest that, a ski slope in the desert, islands fanning out like palm fronds in the Arabian Gulf—and now it rises again, phoenix-like, out of the flames of a global recession with yet more new hotel openings planned for this year.

Nothing is too excessive for this Emirate, and on a surprisingly stormy December morning at the top of the Bhurj Khalifa (the world’s tallest building, as if you had to ask), it throws in a lightning storm for good measure, just to ratchet up the wow-factor a few extra notches. But the extraordinary views—all swirling clouds, apocalyptic rumbles of thunder and dystopian skyline—that are captivating the world’s press, assembled here for the unveiling of Moët & Chandon’s new global brand ambassador, are suddenly forgotten as Roger Federer walks into the room.

Click the link to read the entire article which includes several quotes from Milton Pedraza, CEO of Luxury Institute:

March 25, 2013

Forget Tupperware parties. Local trunk shows offer exclusive access.

By Abha Bhattarai
Washington Post
March 22, 2013

Forget the mall. Your next clothing purchase could take place in a local hotel, hair salon or art gallery.

Washington area businesses such as the Four Seasons and the Northern Virginia Art Center have played host to designer trunk shows in recent months, as businesses look for new and unconventional ways to bring in money.

For clothing and accessories companies, the short-lived events provide an easy way to rack up sales without investing in store fronts or pop-up locations.

Click the link to read the entire article which includes several quotes from Milton Pedraza, CEO of Luxury Institute:

March 22, 2013

Affluent women control 68pc of household purchases: Luxury Institute

By Erin Shea
Luxury Daily
March 21, 2013

Affluent female consumers are making 68 percent of their household’s purchases, while more women are becoming the bread winners of their families, according to a new survey from the Luxury Institute.

Women are now more involved in purchasing and financial decisions for the family than ever before. Since this trend is likely to continue, luxury marketers should look to target affluent women to drive sales.

“This means that [marketers] need to pay more attention to how they are marketing to women in a respective and relative way,” said Milton Pedraza, CEO of the Luxury Institute, New York.

“A lot of companies are doing a good job of marketing to women, but we will see more companies and more services that will begin to market to women,” he said.

The Luxury Institute’s WealthSurvey: Marketing to Wealthy U.S. Women study surveyed 800 U.S. women who are 21 years or older and have a minimum gross annual income of $150,000. The survey took place in the last quarter of 2012.

The bread winners

Two-thirds of women surveyed earn at least $150,000 per year from their own salaries. This group of women has a median annual income of $181,000 per year.

More than 40 percent of working women in married or coupled households report being responsible for the majority of their total household income.

Seventeen percent of women surveyed said they provide support for additional familiar members other than their spouse or children. A quarter of these women said they spend at least $100,000 per year on providing support.

In addition, approximately 25 percent of working women are owners or partners in organizations. These women say that the flexibility in schedule and desire to “be my own boss” drove them to this situation.

The number of women in high-leadership roles and entrepreneurial positions will continue to increase.

This could mean an overall shift in corporate atmosphere, which could help marketers reach female consumers.

“We see a growth in women in the highest level in entrepreneurial and leadership positions that will make corporations more collaborative internally and externally,” Mr. Pedraza said.

“Most women understand the needs of other women, women consumers and other consumers.”

Purchasing power

Affluent women are most likely to control the food and clothing – such as apparel, shoes and accessories – purchase decisions for their household.

This group makes approximately 68 percent of the purchases on behalf of their household.

When purchasing, these women have a decided preference for products that are made by established and well-known brands.

Many luxury marketers target this group of affluent women because of their buying power, but some industry sectors are sending a stronger message than others.

The survey found that fragrances and cosmetics, clothing, shampoo and conditioner, shoes, department stores and jewelry and watches are categories that most effectively market to women.

Also, 65 percent of women in married or coupled households are making investment decisions jointly or in consultation with their spouse or partner.

Twelve percent of affluent women surveyed said that someone else makes these decisions for them, so there will likely be more financial services and similar companies that will begin to market to female consumers.

“We’ll see a lot of brands in the financial services and brands that are at the bottom try to understand how to develop and brand products to women,” Mr. Pedraza said.

March 19, 2013

The Celebrity Endorsement Game

By Tina Gaudoin

Famous faces have been selling luxury goods for years—but how well do they really work?


This exclusive Departures content includes several quotes from Luxury Institute CEO, Milton Pedraza.

March 18, 2013

Women Earn The Big Money In Wealthy Families, And Decide How It’s Spent

(NEW YORK) March 18, 2013 – The independent and objective New York-based Luxury Institute surveyed wealthy women from U.S. households earning at least $150,000 a year about their economic situation, personal aspirations, family responsibilities and companies and industries successfully marketing to them.

Wealthy women are economic engines within their families, with 67% employed or running their own businesses; 41% report earning more than half of their family’s total income, up sharply from 27% who were bigger breadwinners in 2008. Women have been earning college degrees at higher rates than men since 1985, and educational attainment has produced economic muscle: median salary of the working women surveyed is $181,000; 66% earn more than $150,000, and 20% have annual incomes of $300,000 or more.

“Luxury executives should know that given the trends we see now, we predict that the Millennial women will achieve parity or surpass the achievements of their male counterparts in managerial, entrepreneurial, income and net worth levels in the next 2 decades,” says Luxury Institute CEO Milton Pedraza.

Despite career prowess, 90% of women 35 and older say that their most important aspect of life is family, and 34% say that their long-term career goal is to retire and enjoy more family time. Women control a majority of spending in 78% of households, with food (85%), clothing (78%), shoes (78%), and vacations (62%) also especially dominated by women.

“Shifting gender roles require brands in traditionally male dominated industries to connect with strong, successful women, but new marketing campaigns are not enough,” says Pedraza. “Companies must drive engagement through channels like social media and one-to-one communication with empowered sales professionals who serve as brand ambassadors.”

About 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. 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, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises.

March 14, 2013

63pc of affluent consumers want to opt out of online tracking: Luxury Institute

By Erin Shea
Luxury Daily
March 13, 2013

Sixty-three percent of affluent consumers would choose to keep their online history and Internet activities private through an opt-out tracking policy, according to a new survey from the Luxury Institute.

Affluent consumers do not want their personal information used for other purposes and many consumers do not trust the safety of their information when giving it to a brand. This means that luxury marketers need to earn the trust of their consumers before asking for their participation in online tracking.

“We underestimate the fact that consumers are concerned about their privacy,” said Milton Pedraza, CEO of the Luxury Institute, New York.

“Unfortunately, if brands do not earn consumer’s trust and use their data in a trustworthy way, then consumers will opt out if there is privacy legislation passed,” he said.

“Brands then have to shift to earn the trust of consumers.”

The Luxury Institute’s Luxury Brand WealthSurvey surveyed 1,232 U.S. consumers in December 2012 about sharing their contact details in-store and online as well as their tracking preferences.

Respondents were at least 21 years of age and had a minimum annual income of $150,000.

Respecting the consumer

Although 68 percent of affluent shoppers are willing to give personal information to online retailers, 75 percent say this is because of purchase requirements to complete an online transaction, per the Luxury Brand WealthSurvey.

Women feel more pressured in-store to provide personal information during the checkout process. But only 24 percent shared their personal information during a recent in-store transaction.

Also, 66 percent of consumers feel comfortable sharing email in-store, compared to 78 percent feeling comfortable sharing it online.

Once consumers provide their information to a company, 60 percent feel little to no control over it, while 30 percent think that the security of their information is extremely likely to be compromised.

Luxury marketers need to make sure they are being transparent on their intentions when gathering consumers’ information and need to earn their trust before asking for personal data.

“Brands cannot take data collection for granted,” Mr. Pedraza said. “You need to earn that right to get that data and then use it in a trustworthy manner.”

Do not track

Recent U.S. legislation proves that consumers are seeking more control over their contact information and online activities.

If passed, the Do Not Track Act will let consumers stop companies from gathering their personal information online, but experts agree that there is most cause for concern among mainstream brands rather than those in the luxury sector.

Sen. John D. Rockerfeller IV (D-WV) introduced the “Do-Not-Track Online Act of 2013” in the United States Senate Feb. 28 to help consumers keep their online habits private, which is a reintroduction of a 2011 bill.

The legislation will limit the availability of information that marketers use to place digital and mobile ads.

Many affluent consumers would opt-out of online tracking if this legislation passed, according to Luxury Institute’s survey.

Eighty-two percent of affluent customers have already placed their phone numbers on do-not-call lists and the majority reported that they would do the same if there was a similar online option for blocking their Internet activities.

However, luxury marketers can overcome this negative mindset on information sharing by establishing relationships with customers, since 46 percent of respondents said that knowing a specific sales associate makes them more likely to give out contact information while shopping in-store.

“The way to do this is to have sales associates contact the customers directly,” Mr. Pedraza said. “Establish the communication with real humans and that will customize the experience.

“Relationship building is paramount when privacy is a concern,” he said.

March 11, 2013

Wealthy Shoppers Careful About Surrendering Personal Data; Awareness of dangers drives caution

(NEW YORK) March 11, 2013 – The independent and objective New York-based Luxury Institute surveyed U.S. consumers with minimum household income of $150,000 about their attitudes on privacy and their experiences with companies collecting and handling their personal data.

The majority of wealthy shoppers (68%) are inclined to divulge personal data to merchants online, although 75% report this is due to requirements for completing their transaction. Only 24% indicate sharing their contact information during a recent in-store experience, with women feeling more pressure by brands to provide personal details during purchasing experiences. Email is the type of personal data consumers feel most comfortable sharing both in-store (66%) and online (78%). In addition, 46% of customers say that knowing an individual salesperson makes them more likely to divulge contact details while shopping in-store.

Wealthy customers show a penchant for being left alone: 82% have placed their phone numbers on do-not-call lists, and 63% say they would do the same if there were a similar online registry for blocking the tracking of their Web activities. Half of consumers have already fully disabled or edited tracking on their browsers.

Almost 60% of wealthy shoppers feel little or no control over their personal data once a company has it, and 30% say that the security of their data is extremely likely to be compromised.

“Luxury firms must optimize respecting privacy while earning trust in order to collect valuable customer data and use it to create value for customers,” says Luxury Institute CEO Milton Pedraza. “Should privacy legislation be enacted, the brands that will be superbly successful will be those that have built genuine, trusted, long-term human relationships with their customers.”

About 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. 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, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises.

March 6, 2013

Why Care About Gen Y?

Aloft Hotels sees them, as well as Millennials, as the perfect target to build lifelong loyalty. Here’s how they are achieving that goal.

By Caryn Eve Murray
Hotel Interactive
March 05, 2013

The generation is celebrated for its youth, momentum, propensity for bold statements and for always going new places. That’s how Starwood describes Aloft, a relatively new generation of its hotels being welcomed into the hospitality world. A baby born in June 2008, Aloft Hotels could well be called the Millennials of the marketplace. This upstart is defined by loft-like interiors, dynamic public spaces for socializing without a loss of privacy, a bar scene showcasing up-and-coming music talent and guest rooms offering easy hookup to personal media.

So it comes as no surprise that Aloft Hotels are, in fact, something of an architectural counterpart to the very generation of guests they target: travelers born sometime in the early 1980s and beyond, now ripening into successful and peripatetic young adulthood. These Millennial Generation guests are gaining recognition as an enviable catch for anyone, and Aloft in particular.

“When Starwood thought of launching Aloft it was looking at the changing trends in the marketplace and understanding how travelers are traveling differently – the different demographics as well as the psychographics,” said Paige Francis, vice president of global brand management for Aloft. “The next generation of travelers would be the Millennials and those that share that mindset as well.”

In other words, said Francis, the brand recognizes that youthful thinking isn’t just found in the very young. “Who is actually coming to our door?” she said. “As you know, this appeals to a larger variety of the population, depending on their mindset. The self-driven early adopter, tech-savvy social person isn’t just limited to an actual age segment.”

Indeed, as Millennials come of age, suitcases in hand, they become a force the greater industry cannot ignore. Even the most traditional bed-and-breakfast segment has had to come to grips with the question of whether to shake the dust off its doilies, and strip its floral wallpaper, judiciously, to attract them.

“It’s not that baby boomers are exiting, they are still going to travel,” said Milton Pedraza, chief executive officer of the Luxury Institute, a ratings and research company that focuses on high-end branding. “But the emerging Gen X and Gen Y, the Millennials, are traveling too. Their world is so interconnected, they learn about new destinations and want to go sooner than we ever did as baby boomers…Global travel today is second nature, especially to these American consumers.”

And unlike the backpack-toting, hostel-focused youngsters of their predecessor generations, said Pedraza, “they are not into roughing it. They want to experience luxury and at least a minimum level of quality in the premises and amenities. They are not willing to compromise on that and they shouldn’t. The world has much higher standards now for travel and hospitality and a lot of options.”

The rapid expansion of Aloft bears this out. Some 63 hotels have been launched so far, with another five to open this month, said Francis. “Clearly this is a product that has been answering a need,” she said. That is as true in the U.S. as it is overseas, where Aloft is making advances into China, India, Malaysia, Latin America and Thailand.

“Generation Y is poised to become the largest consumer buying group,” Francis said. “They are a very quickly growing group defining the present and will continue to define our future.”

But inns and bed-and-breakfast establishments, which grew popular by serving up tidy slices of the past, have been rethinking their Millennial strategies too. In the spirit of last year’s concurrent presidential campaign season, innkeepers launched “Doily Decision 2012,” a tongue-in-cheek social media debate that tackled the importance of adherence to old-time traditions in the face of a youthful, text- and WiFi-driven world of travel.

“A lot of B&Bs have transcended the doily,” said Jay Karens, chief executive officers of the Professional Association of Innkeepers. But, he said, appealing to the Millennials is not just about tossing out the old – or keeping it – or necessarily being gadget-friendly.

“That’s a fallacy,” he said, referring to the notion that if you capture cutting-edge tech, you capture the Millennials’ hearts and wallets too.

“Where B&Bs are hitting the sweet spot is a more contemporary experience.” He said B&Bs appeal to Millennials now by offering an antidote to what he called “the typical corporate experience.” That often means a slightly more modern environment and a strong desire to build relationships, one-on-one.

The most successful hoteliers build their Millennial business on relationships, not transactions, said Pedraza. “For follow-ups, they don’t just send a generic email, they make a phone call. They suggest something for next year’s vacation. This is authentic human interaction as opposed to commercial gobbledygook speech.”

Millennials are being courted along the whole spectrum of inn styles, he said. “They run from the old-fashioned Victorian to the super modern and super elegant with everything in between,” Pedraza said. “There are plenty of innkeepers on that bell curve, offering the modern sophisticated experience. It might be a 200-year-old home but they have updated their interiors so it looks more like Pottery Barn than Laura Ashley.”

In Vermont’s Mad River Valley, Janice Hurley Hollis opted to mix allegiance to tradition with an advance into the bold and new. Hollis, operations manager of The Round Barn in Waitsfield, Vt., took stock of the 12-room inventory at the 19th century property and charted a varied course.

“Our travelers are changing,” she said “and we were thinking of what we can do at the property to make sure we attract all kinds of guests. We looked at our rooms and asked, ‘are there one or two rooms we could change the style in so we could have broader appeal?’ In our property we have a lot of traditional rooms done in the style you would expect. We went in one of the rooms, the Wait Room, and we did it over as a more modern style that doesn’t have wallpaper. We painted it a nice relaxing bluish tone with chocolate browns. It is not as busy as some of our other rooms.”

Much of the accommodations do, however, remain intact. “There are people who want to come and feel like they are staying in an older farmhouse and they want the wallpaper and that feeling,” she said. “We would never change the whole style of the property.”

Still, with the Wait Room as the inn’s first of a handful of Millennial-driven changes, the Round Barn also ramped up its digital welcome mat, updating its website and strengthening its Facebook presence. Online marketing means bold and beautiful imagery, she said. “We use lots of visuals,” she said. “And we stick to the three rules of marketing: People don’t read, people don’t read, people don’t read.”

She believes the inn and B&B segment is the market’s most Millennial-friendly because of its easy flexibility. “You always have to be conscious of who is the next traveler, and how do we maintain the balance of appealing to our current guests while appealing to our future guests. Finding something that appeals to everyone. B&Bs can do that. You are not coming to a hotel where the whole hotel appeals to one type of traveler.”

But whether the property is an inn, a major hotel or even a cruise line or tour, the ingredients for appeal are the same. “You need to have a bold customer culture, something that differentiates you and the way you deliver your experience,” said Pedraza. “The way people greet you, check you in…the people you interact with have to create a fabulous human experience.”

In the end, he said, it comes down to living up to the Millennials’ own expectations. “They think: ‘You have collected data on me, you know my needs and my desires and you had better deliver them, or I will consider your kind a dinosaur in the digital age.’….So don’t neglect the Millennials, they are the future.”