Luxury Institute News

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.

July 7, 2011

Wealthy Online Shoppers Rank Top Luxury Retailer Websites; Nordstrom Is Most Visited While Barneys, Bergdorf and Brooks Brothers Tie For First Place Along With Net-A-Porter

(NEW YORK) July 7, 2011 – Wealthy shoppers earning at least $150,000 a year weigh in on their most and least favorite luxury retail websites in the 2011 Luxury Online Customer Experience Index survey conducted by the independent and objective New York City-based Luxury Institute.

Affluent consumers rated sites based on visual appeal, navigability, product selection, use of images and text in helping them better understand product features, security of personal data, ease of purchasing and access to customer service. They also indicated how likely they were to return to the site and to recommend it to family and friends.

Based on 1-100 composite scores, the top-ranked luxury sites are those of Barneys, Bergdorf Goodman, Brooks Brothers and Richemont’s Net-A-Porter, each earning a score of 81. Nordstrom has the most frequently visited site, with 23% of respondents visiting Nordstrom.com in the past 12 months.

Wealthy shoppers considered a total of 16 retail sites:

Traditional Retailers:
-Barneys New York
-Bergdorf Goodman
-Bloomingdale’s
-Brooks Brothers
-Lord & Taylor
-Neiman Marcus
-Nordstrom
-Saks Fifth Avenue

Online Only:
-Bluefly
-eBay Fashion Vault
-Gilt Groupe
-HauteLook
-Ideeli
-Net-A-Porter
-Rue La La
-Shopbop

“Except for Net-A-Porter, key luxury multi-channel retailers significantly outperformed the pure online players, with the flash luxury sites being rated in the bottom tier,” says Luxury Institute CEO Milton Pedraza. “Although the pure online players are growing fast, it is becoming a commoditized product space where the only thing that matters will be long-term customer experiences as evidenced by high customer retention scores and increasing average spending. Net-A-Porter proves that it takes far more than content and algorithms to create lasting customer relationships. Online players should borrow a page from the Zappos playbook and create customer-centric cultures that Outbehave the competition. Customer-centricity is the sweet spot of success in the 21st century.”

For greater details about wealthy customer preferences on all criteria for each of the 16 online luxury retailers, please contact Martin Swanson.

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.

For Further Information, Please Contact:

The Luxury Institute, LLC
Martin Swanson
Vice President
(914) 909-6350
mswanson@luxuryinstitute.com

March 1, 2011

Wealthy U.S. Consumers Rate Bergdorf Goodman Customer Experience Best in Luxury Retail; Nordstrom Excels in Loyalty, Brooks Brothers in Total Satisfaction

(NEW YORK) March 1, 2011 – For the second consecutive year, Neiman Marcus’ Bergdorf Goodman subsidiary earns the top ranking among eight luxury retailers in the 2011 Luxury Consumer Experience Index (LCEI) survey of wealthy shoppers conducted by the independent and objective New York-based Luxury Institute. Respondents rated retailers on store personnel, the shopping environment and whether the overall experience resulted in complete satisfaction.

Brooks Brothers earns the second highest overall LCEI score but ranks first for completely meeting wealthy customers’ needs. Nordstrom receives the third highest LCEI score, and remains the most popular luxury shopping destination, visited by 38% of wealthy shoppers in the past 12 months. It is also earns the highest loyalty, with 98% of shoppers planning to come back.

“The top-tier brands of luxury with resources are now focused on becoming customer-centric global enterprises,” says Milton Pedraza, CEO of the Luxury Institute. “The only way to achieve this is to create establish a self-reinforcing culture of service to your associates and your customers. The work is extremely hard but the financial returns can be dramatic.”

Survey participants had minimum household income of $150,000, with average income of $271,000 and average net worth of $2.4 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.

For Further Information, Please Contact:
The Luxury Institute, LLC
Martin Swanson
Vice President
(914) 909-6350
mswanson@luxuryinstitute.com