Luxury Institute News

August 7, 2012

10 Things Apple Won’t Tell You

From customer service to app safety and even how its devices affect our relationships, here are 10 things Apple won’t likely tell you about its products and its business.

By Quentin Fottrell
SmartMoney
August 6, 2012

1.”Our customers are worn out.”

All that initial excitement over the first iPhone or iPad has quickly given way to what analysts are dubbing “upgrade fatigue” — with even Apple’s most loyal customers upset about the steady stream of newer models. In fact, when people buy Apple’s latest product, the company is usually already preparing its replacement, says technology consultant Patchen Barrs, who has owned 25 Apple products over the last 20 years. “Everything we buy from them is already out of date,” he says. Take a count: Since 2001, there have been six iPods, two iPod minis, six iPod Nanos, four iPod Shuffles and four editions of the iPod Touch. Apple has released five iPhone models since 2007 and has had three iPads since 2010.

Of course, newer models have their upsides: They’re usually slimmer, faster and have additional features like better cameras and improved screen quality. And Apple, which declined to comment for this story, has said that such improvements more than justify the fast pace of their new additions. (In March, for example, Apple spokeswoman Trudy Muller said the latest iPad delivered a “stunning” screen display.) But that argument isn’t enough to appease some cash-strapped consumers. Almost 50% of consumers say they’re increasingly unwilling to buy new products for fear that they will be rendered outdated by even newer versions, according to a recent survey of 2,000 people by Marketing Magazine in the U.K.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://www.marketwatch.com/Story/Story/?guid={61E63842-DFED-11E1-961B-002128049AD6}

April 4, 2012

Wealthy Smartphone Users Like Angry Birds and Facebook

By Robert Frank
Wall Street Journal
April 3, 2012

Millionaires don’t get to be millionaires by playing games on their phones right?

Wrong. According a new study from the Luxury Institute, 73% affluent smartphone users (with an average net worth of $2.8 million) used smartphone apps every day. The most frequently downloaded apps for millionaires included Angry Birds, Facebook and Words with Friends.

Of luxury consumers with smartphones, 28% of them own an iPhone, 22% own an Android, 16% own a BlackBerry and 2% own another smartphone, the study said.

Click the link to read the entire article: http://blogs.wsj.com/wealth/2012/04/03/wealthy-smartphone-users-like-angry-birds-and-facebook/

April 3, 2012

Wealthy smartphone users less likely to play games, tweet

Wealthier smartphone users are less likely to play games or tweet and will opt for news, travel or finance apps, according to a new study.

By Natasha Baker
Reuters
April 2, 2012

The research by The Luxury Institute focused on app usage among wealthy consumers, who earn an annual income of $150,000 or more. They tend to be older, with a mean age of 52.

“As you get older and have family and significant others, aging parents, and a lot more assets and investments, you’re going to need apps for far more relevant things than playing games and chatting with your peers,” said Milton Pedraza, CEO of The Luxury Institute.

The findings are in contrast to smartphone usage as a whole, which research firm Nielsen showed is dominated by games and social networking categories.

The wealthy use Facebook and Angry Birds, the two most downloaded apps of 2011, but overall, higher-income consumers use apps for entertainment far less than the average smartphone user, according to Pedraza.

While wealthy consumers are only slightly more likely to have a smartphone than the general population, Nielsen said the breakdown of devices owned differs considerably.

Forty-five percent of wealthy smartphone users own an iPhone, followed 35 percent with an Android device and a quarter who had a Blackberry. But Nielsen found that overall Android had 46 percent of market share, followed by the iPhone with 30 percent and Blackberry with 15 percent.

“Google’s strategy with Android is that they have multiple manufacturing partners,” explained Jonathan Carson, the CEO of digital at Nielsen. “There’s a broader choice with Android in the number of devices, and that may offer some opportunities for lower-end consumers.”

He added that the iPhone has always done quite well with high-income consumers.

Carson also noted an upswing in the number of smartphone users adopting iPhones within the last few months, which he attributes to the iPhone 4S, and Apple’s strategy to keep lower-priced models on the market at lower-price points to appeal to a wider range of consumers.

The study also showed that more than 80 percent of affluent consumers have downloaded apps and many have opted for paid apps and in-app upgrades. But on average, wealthier consumers download about half as many apps as the average consumer.

Among wealthy smartphone users, 67 percent have used their mobile device to shop for products or services online with tickets, gift cards, food or electronics the most popular purchases.

“There are a large number of people that still love to shop in the store, and I don’t think it’s only older people,” Pedraza said, adding apps can augment the in-store experience.

The marketing firm Plastic Mobile polled 603 consumers whose mean income was $295,000 and net worth was $2.8 million for The Luxury Institute study.

http://www.reuters.com/article/2012/04/02/us-app-wealthy-idUSBRE83108920120402

March 23, 2012

Wealthy U.S. Smartphone Users Reveal Details on Shopping, Spending and Use of Mobile Apps; Facebook, Angry Birds and Words With Friends Top List of Favorite Apps

(NEW YORK) Mar 22, 2012 — For the newly released WealthSurvey, “Mobile Apps And Commerce Among Wealthy U.S. Consumers,” the independent and objective New York City-based Luxury Institute, in conjunction with mobile agency Plastic Mobile, interviewed U.S. consumers earning at least $150,000 per year about their smartphones and how they use them for shopping and entertainment.

Apple is the dominant smartphone brand for high-income users. Of the 62% of wealthy Americans who own a smartphone, 45% have an iPhone, 35% use an Android-based device, and 25% own a BlackBerry.

More than 80% of wealthy smartphone users have downloaded mobile apps to their phone, and the most popular categories of downloaded apps are weather (63%), news (51%), travel (42%), business/finance (39%) and sports (34%). Wealthy users have downloaded an average of 15 mobile apps and use half of them frequently. Almost half (48%) of affluent consumers use five or fewer apps on a regular basis.

Facebook is the app used most frequently by wealthy smartphone users, followed by weather apps, maps, Google and the Safari browser. Facebook is also the app that wealthy smartphone users say is their favorite. Nearly as popular are the games Angry Birds and Words With Friends.

Top reasons for not downloading apps are lack of interest (49%) and a desire to keep phone functionality simple (32%). Not wanting to pay is a reason cited for not downloading apps by 20% of wealthy smartphone users, but 59% have paid for applications and 55% of those who have downloaded free apps have upgraded to pay versions. Two in five wealthy users are willing to pay for apps priced between $0.99 and $1.99, while 23% are okay with paying between $2 and $4.99 for a mobile app. Only 18% would pay more than $5.

With regard to commerce, 67% of wealthy smartphone users shop on their devices and 63% regularly buy goods or services. Half of shoppers make purchases at least monthly, with almost 80% spending more than $100 on mobile phone transactions in the past year, and 25% spending in excess of $1,000. Event tickets (39%), gift cards (29%), and food and electronics (both 27%) are the top purchase categories.

The chief reason for not shopping on mobile phones is preference for the in-store experience, cited by 51% of users who do not use their device for commerce. Another 29% say that privacy issues keep them from making purchases on their phones.

“The study showed an incredible opportunity for mobile in luxury,” says Melody Adhami, president and COO of Plastic Mobile. “Not only are affluent Americans using mobile, but they are really taking advantage of its benefits, with more than 80% of consumers downloading apps.”

“Smart luxury firms recognize the potential of their mobile presence to boost sales and get closer to their customers,” says Milton Pedraza, CEO of the Luxury Institute. “Customers clearly view smartphones as part of the new shopping experience.”

Respondents reported an average net worth of $2.8 million.

For details from this WealthSurvey and others, visit LuxuryInstitute.com.

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, 2011

Fear of What’s in Store

By Romy Ribitzky
Portfolio
June 3, 2011

The month of May isn’t traditionally a good one for retailers, and this one wasn’t an exception, as many chains open for at least one year reported muted sales. Bad weather and rising concern over volatile energy prices kept consumers at home.

It didn’t help that the Easter holiday fell in April this year and that Mother’s Day was a lackluster gift-giving holiday with mom not getting expensive gifts overall.

Of 24 retailers, about 60 percent missed expectations and 40 percent beat expectations, according to a poll by Thomson Reuters.

Even typical trend-bucker Target felt some weakness. “Our guests continue to shop cautiously in light of higher energy costs and inflationary pressures on their household budgets,” Target’s CEO Gregg Steinhafel told the Associated Press.

However, at the other end of the spectrum, high-end luxury sales, jewelry, and e-commerce enjoyed strong growth in May, as did the hotel and restaurant industries, according to the MasterCard Advisors SpendingPulse report, a monthly macroeconomic indicator that measures national retail sales per sector.

But perhaps the best standout continues to be e-commerce. Now in its 22nd month in positive territory, and posting its seventh month of double-digit gains at 15.9 percent, e-commerce sectors continue to dominate across the board says Michael McNamara, Vice President, Research and Analysis for MasterCard Advisors SpendingPulse in a statement.

Luxury-hungry Millennials may be driving that growth, finds the latest report from the New York-based Luxury Institute. “Wealthy Americans 35 years of age and younger are avid consumers of a wide range of new media on smartphones and tablet computers,” according to the report. “Seventy-percent own smartphones (40 percent iPhone, 24 percent BlackBerry) and 23 percent already have an Apple iPad.” Their tendency to use their tech toys to make purchases on the go is likely to only continue driving up e-commerce sales. And once mobile payment platforms truly become integrated into mainstream retail, expect Millennials to largely dominate how—and where—retailers spend their ad dollars.

http://www.portfolio.com/views/blogs/executive-style/2011/06/02/same-store-sales-muted-in-may-but-ecommerce-shines#ixzz1OFHAnQWu

April 5, 2011

High Net-Worth Millennials Focused On Financial Success and Digital Lifestyles, Tuning Out Old Media; Luxury Institute Survey Shows Generation Y Spending Dozens of Hours Online Consuming and Creating Media on Multiple Devices

(NEW YORK) April 5, 2011 – A new survey by the independent and objective New York City-based Luxury Institute shows wealthy individuals 35 years of age and younger avidly consuming a wide range of new media on smartphones and tablet computers, and quickly losing the television, radio and print newspaper consumption habits of their parents. Seventy-percent own smartphones (40% iPhone, 24% BlackBerry) and 23% already have an Apple iPad.

More wealthy Generation Y consumers watch online video (78%) than those who regularly read a printed magazine (76%) or newspaper (68%). Their average of 100 minutes weekly spent watching online videos, combined with 227 minutes spent watching DVR playback, exceeds 289 average minutes watching live television. Internet radio is closing the gap, too, with average listening time of 75 minutes per week, compared to 150 minutes for terrestrial radio.

“This is clearly a tipping point, with the rising generation of wealthy consumers consuming media in vastly different ways than anyone did just a decade ago,” says Milton Pedraza, CEO of the Luxury Institute. “Luxury firms face a challenge to adapt accordingly but also a tremendous opportunity to engage younger customers,” adds Pedraza, noting the propensity of wealthy millennials to create content of their own in the form of blog and video posts, as well as Facebook and Twitter status updates.

For complete details on attitudes, demographics and device ownership of wealthy millennials, visit LuxuryInstitute.com.

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

February 9, 2011

What’s up with the pricey Rolex app?

By Elizabeth Zelesny
Luxury Daily
February 8, 2011

Rolex is showcasing its 100 years of watchmaking history via a pricey mobile application, which is a digital version of the book by Guido Mondani Editore.

The 100 Years of Rolex application lets users swipe through content about the company and its major milestones. It allows users to search Rolex models by model production year, reference and value. But how much is too much for an application such as this?

“If there is no differentiation it is very hard to get consumers to get an expensive luxury app,” said Milton Pedraza, CEO of The Luxury Institute, New York. “The app needs to have tremendous quality and design.

“If you are going to do that in an application, you have to have a difference that is worthy of the price,” he said.

The Luxury Institute is not associated with Rolex. Mr. Pedraza agreed to comment as a third-party expert.

The application is available for purchase in the Apple App store for $11.99.

Inside the app
Within the application, users have the ability to know the up-to-date value of all models produced by Rolex.

The application includes all Rolex models with related detail sheets and estimates. It allows consumers to collect and invest on the go.

The 100 Years of Rolex app runs through all watch models manufactured by the brand during its first century of production. It provides detailed descriptions of all models and more than 500 high-quality images.

Users can add a watch or a reference to their favorites, which provides easy access to have it on hand at any time.

Affluent watch connoisseurs can discover how much a particular Rolex is worth with one click.

Why so much?
Applications for the iPhone and iPad geared to watch-collectors and enthusiasts have started to flourish in the Apple App Store.

The booming App Store has witnessed a wide range of prices.

When the App Store launched in 2008, the most popular applications were either free or cost $0.99 or $1.99.

App developers are pushing their boundaries with the pricey applications, especially if consumers believe there isn’t any “bang for your buck.”

Generally, expensive apps are, well, expensive because of their complexity and completeness, but also because of the value they provide.

The Rolex application is complex, but can watch-collectors find this information elsewhere? Yes.

Even though the price of the application is inexpensive for affluent consumers, they would not want to pay money for an essentially useless application.

The information from the app can be found via the Internet or the “100 Years of Rolex” book.

Developers have begun to fiddle around with app prices to maximize revenue from sales.

They are trying to find the spot where the price is low enough to get as many sales as possible, but not too low so that they can still make a profit.

At the end of the day, the reason why some applications are expensive is supply and demand.

“I think consumers will test the application, and if they don’t like it, they will send word of mouth about it,” Mr. Pedraza said. “Word spreads fast in this digital world.”

http://www.luxurydaily.com/what%E2%80%99s-up-with-the-pricey-rolex-app/