Luxury Institute News

June 29, 2013

Neiman Marcus’ Karen Katz: ‘Willing to push the envelope’

By Danielle Abril
Dallas Business Journal
June 28, 2013

Neiman Marcus Group Inc. is known for its luxury merchandise, exclusive customer loyalty perks, and an online presence that has gone global. But behind the designer, hand-stitched curtains, stands a polished, humble woman armed with the confidence to take a risk.

“She’s been willing to push the envelope,” Steven Dennis, a former senior vice president at Neiman Marcus Group, said of CEO Karen Katz. “She has a strong appreciation for innovation and a stronger understanding of where today’s consumer is going.”

Katz, 56, has been with the Dallas-based luxury retailer since 1985, working her way up from her first job …

Click the link to read the entire article which includes several quotes from Milton Pedraza, CEO of Luxury Institute: http://www.bizjournals.com/dallas/print-edition/2013/06/28/minding-the-store.html

June 27, 2013

Wealthiest U.S. Women Find Jewelry And Relationships At Tiffany, David Yurman And Cartier; Ralph Lauren And Brooks Brothers Suit Pentamillionaire Men

(NEW YORK) June 27, 2013 – The Luxury Institute surveyed ultra-wealthy U.S. consumers with minimum net worth of $5 million about luxury brands they buy and the relationships they have with luxury sales professionals.

Tiffany & Co. is the jewelry brand most widely purchased by ultra-wealthy women, followed by David Yurman and Cartier. These three leaders in market share are also the top three jewelers where ultra-wealthy women have a preferred salesperson.

In the women’s fashion and accessories category Michael Kors holds a commanding 36% market share, followed distantly by Prada, Burberry, Louis Vuitton, Chanel, Gucci and Marc Jacobs.  These top seven brands vary widely in their ability to build relationships with ultra-wealthy women, with Marc Jacobs falling behind the rest while Prada leads the pack.

Among pentamillionaire men, Ralph Lauren and Brooks Brothers hold the largest market share in the men’s fashion and accessories category.  Overall, ultra-wealthy men are less likely than women to build relationships with salespeople.

Pentamillionaire men and women both agree that the top ways salespeople build lasting relationships are by making them feel comfortable, communicating honestly, earning their trust and recognizing them on store visits. More than half of ultra-wealthy women who purchase from both jewelry and fashion brands say they appreciate handwritten thank you notes.

“Relationship selling is not something exclusive to markets like high-end automobiles, real estate and wealth management services,” says Luxury Institute CEO Milton Pedraza. “Even in luxury jewelry and fashion, relationships cultivated by trust and an understanding of customer preferences can help boost both the frequency and size of sales.”

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 20, 2013

Ultra-Wealthy Shoppers Flock To Nordstrom But Barneys, Bergdorf And Neiman Cultivate Relationship Business

(NEW YORK) June 20, 2013 – The Luxury Institute surveyed consumers with minimum net worth of $5 million about top luxury retailers they purchase from, and the relationships they maintain with luxury sales professionals.

Nordstrom boasts the largest share of pentamillionaire purchasers, with a majority of ultra-wealthy consumers buying something from the Seattle-based luxury retailer in the last year.  Rounding out the top three in terms of popularity are Bloomingdale’s and Neiman Marcus.

Marquee names selling higher-ticket luxury items make up for a lack of widespread appeal with deeper customer relationships. Sales professionals at both Barneys New York and Neiman Marcus rise above the competition in building relationships with pentamillionaire clients.  Similarly, Bergdorf Goodman’s market share among ultra-wealthy shoppers is just one-fourth the size of Nordstrom’s, but the prevalence of customer-salesperson relationships at Bergdorf is triple the rate at Nordstrom.

Sales professionals at more mainstream retailers like Nordstrom and Bloomingdale’s are far less likely to have cultivated exclusive relationships.  Relationships are more prevalent among women than men, and those under the age of 65 compared to those who are older.

“Technology may make it easier for sales professionals to maintain relationships,” says Luxury Institute CEO Milton Pedraza. “But simple and personalized approaches like follow-up phone calls or handwritten thank you notes still prove tremendously effective.”

Respondents also ranked the comparative importance of the qualities they seek in sales professionals from luxury retailers, such as recognizing them when they visit the store, receiving calls and emails with special product offers, and making them feel comfortable.

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 11, 2013

Wealthy to spend less on luxury items they don’t need

By Angela Johnson
CNN Money
June 10, 2013

NEW YORK (CNNMoney) — The improving economy isn’t going to spur a mad dash to luxury stores among the U.S.’s wealthiest shoppers, a new survey shows.

Wealthy consumers are expected to cut back on spending on non-essential items during the second half of the year; seeking products and experiences that hold more value instead, according to a survey released Wednesday by the Luxury Institute.

Of the more than 500 “pentamillionaires” — those with a net worth of $5 million or more — surveyed, more than 80% say luxury goods, such as jewelry, watches, and handbags, have declined in significance.

“Even among the wealthiest customers, luxury goods and services are considered less important in today’s economy,” said Luxury Institute CEO Milton Pedraza in a statement.

Click the link to read the entire article which includes multiple quotes from Milton Pedraza, CEO of Luxury Institute: http://wtkr.com/2013/06/10/wealthy-to-spend-less-on-luxury-items-they-dont-need/

Wealthy to cut back on pricey stuff, spend more on experiences

By Shan Li
Los Angeles Times
June 10, 2013

Wealthy shoppers will refrain from scooping up expensive handbags, shoes and other discretionary items even as the economy recovers and the stock market soars, a study found.

In the second half of 2013, the rich will rein in their spending on material things and seek out experiences that may garner more satisfaction, according to a Luxury Institute survey.

“People are less interested in watches and more interested in building lasting memories,” said Milton Pedraza, chief executive of the Luxury Institute. “Even among the wealthiest customers, luxury goods and services are considered less important in today’s economy.”

Click the link to read the entire article which includes several quotes from Milton Pedraza, CEO of Luxury Institute:
http://www.latimes.com/business/money/la-fi-mo-wealthy-spending-20130610,0,5516627.story

June 10, 2013

Affluent Shoppers Make Mobile an Essential Stop in the Purchase Funnel

Discounts get affluent mobile shoppers to buy

eMarketer
June 10, 2013

The wealthy consumer is highly likely to own a smartphone or tablet, and the devices are becoming critical shopping tools for these high-income individuals. In April 2013, the Luxury Institute surveyed US internet users ages 21 and older with gross incomes above $150,000 and found that more than eight in 10 owned a smartphone, while 56% reported owning a tablet. These penetration rates are well above those for the overall US population on smartphones or tablets.

As affluent consumers become increasingly comfortable with their smart mobile devices, they are turning to them throughout the purchase process. The Luxury Institute found that the most common smartphone mcommerce activity was looking up store information. After this came product research and comparison shopping.

On tablets, consumers were most likely to look up product images and read user reviews and recommendations. This points to the increasing importance for luxury retailers to make sure they have an attractive, interactive tablet showcase for their products, as tablets serve as “lean-back” devices, which consumers often use to get to know potential purchases.

When it came to making actual purchases, the store still won out as the most common place to make a purchase among affluent consumers, cited by 78% of respondents. Purchasing via the desktop web was right behind, however, cited by 77%. Women were 6 percentage points more likely than men to make a purchase through this means, while men showed a greater proclivity to buy on mobile.

Mobile websites on tablets were the place where the greatest percentage of shoppers made mobile purchases, at one out of five affluent consumers. Another 11% used a tablet app to make a purchase. Fourteen percent of affluent consumers used the mobile web on a nontablet device to buy and 12% used a mobile app.

And even if affluent shoppers have plenty of cash at their disposal, that doesn’t mean a deal won’t help them convert. On tablets, special deals or price discounts were the No. 1 reason respondents would purchase via these devices, with 43% indicating that would sway them. On smartphones, special deals tied with ease of use, at 45%, as top reasons to complete a purchase on the device.

http://www.emarketer.com/Article/Affluent-Shoppers-Make-Mobile-Essential-Stop-Purchase-Funnel/1009954

June 7, 2013

Wealthy Will Spend Less on Jewelry for Rest of Year, Survey Finds

Posted in Uncategorized

A new survey predicts that high-end jewelry “may be under some pressure” for the rest of 2013, with 25 percent of affluent consumers saying they plan to spend less on that category.

By Rob Bates
JCK Magazine
June 2013 Issue

The survey by the New York City-based Luxury Institute polled consumers with a net worth of at least $5 million and minimum annual household income of $200,000.

The survey also found that spending on handbags was projected to fall, with ultra-wealthy respondents preferring to spend on travel, dining, and wine.

“They are definitely going to the ‘experential’ categories,” Luxury Institute president Milton Pedraza tells JCK. “Travel is healthy, technology is healthy.”

Pedraza believes the “economy is not as healthy as people think.”

“Even though real estate is robust and the stock market is robust, there is a lot of uncertainty out there,” he says. “There is some pent-up demand, but also a lot of caution.”

http://www.jckonline.com/2013/06/06/wealthy-will-spend-less-on-jewelry-rest-year-survey-finds

June 4, 2013

Better Economy Spurs Ultra-Wealthy To Spend More On Travel, Dining And Wine, But Appetite Cools For Jewelry And Handbags

(NEW YORK) June 4, 2013 – For its 2013 State Of The Luxury Industry report, the Luxury Institute surveyed pentamillionaire consumers with net worth of at least $5 million and minimum annual household income of $200,000 to learn about current preferences and future spending on luxury goods and services for the remainder of 2013. Respondents also shared evaluations of the overall luxury market.

One-third of pentamillionaires plan to step up spending on leisure travel in the second half of 2013, making hotels, airlines and cruise operators big beneficiaries of additional spending by America’s wealthiest shoppers. Restaurants are poised for a pick-up, too, with 20% of ultra-wealthy consumers planning to spend “more” or “much more” on dining out in the final six months of the year, and 19% also pouring more dollars into wine.

Additional categories seeing significant upcoming spending interest are health & fitness (17%) and vacation real estate (17%).

Rebounding home values and the surging stock market are not spreading cheer or riches universally. More than 80% of pentamillionaires say luxury goods are less important in the current economic environment. Jewelry sales especially may be under some pressure, with 25% of the ultra-wealthy saying they will spend less or much less through the remainder of 2013. Handbags are the focus of planned spending cutbacks by 20% of those surveyed.

“Even among the wealthiest consumers, luxury goods and services are considered less important in today’s economy,” says Luxury Institute CEO Milton Pedraza. “Luxury brands can capture these increasingly discerning ultra-wealthy consumers by providing unrivaled quality, craftsmanship and service.”

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 3, 2013

Can the Tysons malls stay on top?

By Abha Bhattarai
Washington Post
June 2, 2013

Fourteen years after Spanx was founded, company executives began scouting locations for their first-ever retail store.

The answer, they say, came quickly: Tysons Corner Center in McLean.

“We needed somewhere where we could reach mothers, daughters and grandmothers all in one place,” Spanx founder Sara Blakely said at the time of the store’s opening, late last year. “The [Tysons] area already had a strong customer base online. It was a very good location for our first store.”

It was the same model Apple had followed more than a decade earlier, when it picked the mall as the site of its inaugural retail store. In the years since, Tysons Corner Center and its upscale sibling, Tysons Galleria, have become coveted launch pads for big-name brands entering the Washington market.

Click the link to read the entire article which includes several quotes from Milton Pedraza, CEO of Luxury Institute: http://www.washingtonpost.com/business/capitalbusiness/can-the-tysons-malls-stay-on-top/2013/05/31/f47ea49a-c7c9-11e2-8da7-d274bc611a47_story_1.html