Luxury Institute News

September 22, 2012

Consumers’ Expectations High for Luxury Brands on Mobile

The highest percentage of high-end consumers expect luxury apps to include a loyalty program

eMarketer
September 21, 2012

Luxury brands have been slow to the mobile party, with marketers steering clients toward traditional brick-and-mortar locations where products could be displayed in elegant surroundings and customers were treated to an impeccable shopping experience. But luxury brands are making up for lost time, according to a new eMarketer report, “Luxury Marketing: Recreating the One-on-One Experience with Mobile.”

Click the link to read the entire article: http://www.emarketer.com/Article.aspx?R=1009366&ecid=a6506033675d47f881651943c21c5ed4

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 “Everything we buy from them is already out of date,” he says.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 Almost 50% of consumers say they’re increasingly unwilling to buy new products for fear that they will be rendered outdated by even newer versions, according to a recent survey of 2,000 people by Marketing Magazine in the U.K.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}

May 21, 2012

Travel apps for smartphones and tablets explode, but how to find good ones?

By Andrea Sachs
Washington Post
May 18, 2012

These days, it’s easier to name the companies that don’t have a travel app than the ones that do. But press us, and we can’t really think of any.

Industry players large (United Airlines, Starwood Hotels and Resorts, England) and small (beach locator, taxi finder, Slovakian ski resorts) are flooding our smartphones and tablets with vacation-related apps. The fingernail-size accessory touches on every component of travel: planning, booking, exploring, idling, photographing, filming, socializing and sharing. An app can map a route, track a flight, convert foreign currencies, edit holiday videos and even tell a German bartender, “Bitte, noch ein Bier.”

Farewell, PC. Hope you enjoy your new life on the basement Ping-Pong table.

“Mobile is a transformational platform,” said Norm Rose, senior technology analyst at PhoCusWright, a travel market research firm. “It’s an essential tool for the traveler.”

Click the link to read the entire article which includes quotes from Milton Pedraza, CEO of Luxury Institute: http://www.washingtonpost.com/lifestyle/travel/travel-apps-for-smartphones-and-tablets-explode-but-how-to-find-good-ones/2012/05/17/gIQARnsyYU_story.html

April 24, 2012

Wealthy U.S. Consumers Favor and Feel More Connected to Luxury Brands Offering a Mobile App

(NEW YORK) April 24, 2012 – The independent and objective New York City-based Luxury Institute, in cooperation with award-winning mobile marketing agency Plastic Mobile, surveyed affluent U.S. consumers about the growing connection between luxury and the emerging mobile market. The results of their research have just been released in the study, “Mobile Apps And Commerce for Luxury Brands.”

“Luxury brands must acknowledge the impact of technology advancements in the mobile space and find a humanistic way to connect and engage with their consumers through mobile,” says Milton Pedraza, CEO of Luxury Institute.

Gucci, Louis Vuitton, Saks Fifth Avenue, and Gilt Groupe are the most frequently downloaded apps by wealthy consumers who have luxury brand applications on their mobile device. Most affluent smartphone owners who are downloading luxury apps are using them to find information on products, services or brands (56%).

Almost all wealthy consumers who have used luxury brand apps report that they have had a good experience with the mobile apps (93%). In addition, 71% report that they feel better connected to luxury brands after downloading and/or using their applications and 64% view luxury brands that offer a mobile application more favorably than brands that do not.

The survey respondents indicate there are a number of features they expect from luxury brand applications and highlight loyalty programs (46%) and early access to sales (45%) as the most important.  In addition, providing sales professionals with a mobile application that can specify details about products (53%), have the ability to check for sizes and availability at other stores (50%) and in-store product inventory (47%) would enrich the luxury shopping experience for affluent consumers.

Of the 63% of wealthy consumers who have made a purchase through their mobile device, just under 20% have bought a luxury product or service. While preference for the in-store experience (45%) is why wealthy smartphone users have not yet fully embraced luxury mobile commerce, the majority of luxury consumers who choose to shop via mobile report that there is no upper monetary limit to how much they would spend (72%). This indicates a tremendous emerging opportunity for luxury brands to connect with consumers through mobile.

“Mobile has been receiving a lot attention in the retail space lately. The study suggests the mobile strategy for luxury brands must be about enhancing the in-store customer experience and using the platform to help strengthen customer relationships,” says Melody Adhami, President and COO of Plastic Mobile.

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.

About Plastic Mobile
Plastic Mobile is an award-winning mobile marketing agency of thinkers, artists, creators and builders with one common aspiration: to create extraordinary user experiences. Plastic Mobile is at the heart of the evolution of interactive mobile technology, pushing the boundaries and setting the bar for the standard of quality.

Known for many quality, first-in-kind mobile initiatives, Plastic Mobile delivers exceptional client service and highly customized mobile solutions for all platforms. With a diverse, high-profile client list, including Air Miles, Axe and Royal Le Page, they are the proud recipients of myriad awards, including the 15th annual Webby shopping award, “the Oscars of the Internet.” www.plasticmobile.com

April 6, 2012

Make Purchases From Our iPhones? We’d Rather Not, Say the Wealthy

By Lauren Covello
FOXBusiness
April 5, 2012

It’s often said that the rich have the world at their fingertips.

When it comes to shopping, however, it seems they prefer to use their legs.

Sixty percent of wealthy smartphone owners say they rarely or never shop on their mobile phones, according to a new survey released by independent research firm The Luxury Institute. The survey polled individuals who earn $150,000 or more a year and reported an average net worth of $2.8 million.

While the respondents cited several reasons for not indulging in mobile shopping, the biggest reason by far was a preference for the in-store shopping experience. Fifty-one percent said they prefer to touch and feel the products they’re buying than swipe through products on their smartphones.

“They love the in-store experience; some even see it as entertainment,” says Milton Pedraza, CEO of the Luxury Institute…

Click the link to read the entire article which includes additional quotes from Milton Pedraza, CEO of Luxury Institute: http://www.foxbusiness.com/personal-finance/2012/04/05/make-purchases-from-our-iphones-wed-rather-not-say-wealthy/

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 27, 2012

67pc affluent smartphone owners use mcommerce: study

By Rachel Lamb
Luxury Daily
March 26, 2012

More than two-thirds of affluent consumers who own a smartphone have used their mobile device to shop for products and services, but since they prefer the in-store experience, luxury brands have to start creating humanistic experiences on mobile.

Preference for the in-store experience, the cornerstone of luxury marketing, is the main reason why smartphone owners say they do not buy products through mobile. Mobile applications are the most common form of engagement for affluent consumers, indicating that luxury marketers need to step up the in-app experience.

“Consumers are becoming so much more mobile and we need to figure out how to translate that mobility into a humanistic experience,” said Milton Pedraza, CEO of the Luxury Institute.

“Apps are becoming ubiquitous, so it’s what we do with them that make the experience more extraordinary that will make the difference,” he said. “How the app is being used by the consumer or to contact someone who represents the brand is now where the real opportunity lies.”

The Luxury Institute study was conducted over the first quarter of 2012.

Respondents reported an average net worth of $2.8 million.

Complicated commerce
Of the 67 percent of affluent consumers who shop via mobile, 63 percent of them have made purchases in the past 12 months, according to the study.

Furthermore, wealthy consumers who made purchases spent an average of $628.

Event tickets, gift cards, food and technology/personal electronics are the most-common type of mobile purchase, according to the study.

Preference to the in-store experience is the most-used reason for not making a mobile purchase.

However, other issues include “privacy and security issues,” “it seems complicated,” “the brands I purchase from do not offer mobile shopping” and “I don’t know how.”

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

Appetizing
Of the 60 percent of affluent consumers in the United States who have a smartphone, approximately 73 percent of them use apps at least once per day, according to findings from the Luxury Institute.

Affluent consumers are using apps including Facebook, Angry Birds and Words With Friends, making them a prime spot for luxury mobile marketing. However, most high-end brands are not fully grasping the urgency that they not only need to be in mobile, but the leading innovators.

Of affluent consumers who own a smartphone, 80 percent of wealthy U.S. consumers report that they have downloaded an app.

Navigational and entertainment apps are the types of apps most frequently downloaded, including Facebook, Angry Birds and Words With Friends.

That said, these apps provide opportunities for luxury marketing. In fact, some brands have already taken advantage.

For example, department store chain Nordstrom is targeting aspirational consumers through mobile banner advertisements for its Nordstrom Rack locations in the popular gaming application, Words With Friends.

In addition, New York-based department store Bergdorf Goodman used Words With Friends to drive foot traffic to its store with a location-based banner ad promoting an in-house event.

However, what these results are telling marketers is that it is not just young consumers who enjoy gaming apps. The respondents of the study – older, more affluent consumers – are still citing Angry Birds, Facebook and Words With Friends as their favorite apps.

However, there is a fine line between marketing to adults and aspirational consumers.

“Brands do need to be as engaging as social media, but they cannot be gimmicky – they must be honest and real,” Mr. Pedraza said. “It is surprising that Facebook and games have reached all consumers, not just the young.

“That said, it is hard to extrapolate data over the next few years when technology and behavior are spending so quickly,” he said. “The speed of change among all consumers, not just the young but the old and affluent, is very quick.”

http://www.luxurydaily.com/67pc-affluent-smartphone-owners-use-mcommerce-study/

March 3, 2012

What DiorMag says about the brand

By Rachel Lamb
Luxury Daily
March 2, 2012

French fashion label Christian Dior announced the launch of DiorMag, an online magazine that positions the brand as an innovative storyteller, entertainer and purveyor of the height of luxury products.

DiorMag is available as a section on the Dior Web site and includes articles, images, current news and product galleries. DiorMag has the potential to secure brand loyalists and drive transactions, per experts.

“I think what the magazine does is that it tries to  create a lot of relevant and interesting content about the brand and the people behind it,” said Milton Pedraza, CEO of the Luxury Institute, New York. “Therefore, it’s a great vehicle for storytelling that educates and entertains consumers and that enhances the opportunity to have consumers be loyal to the brand because they know the story behind it.

“It meets the criteria for great content, it’s not purely infomercial,” he said. “In this case, it’s well-optimized because it’s telling its own stories with objectivity and decorum, not just a hard-sell.”

Mr. Pedraza is not affiliated with Dior, but agreed to comment as an industry expert.

Dior did not respond before press deadline.

Dear Dior
DiorMag is split up into a few sections including report, monsieur Dior, Dior over the world and all about Dior.

In those sections are topics including woman, Dior Homme, baby Dior, fragrance, makeup, skincare, jewelry, timepieces and Dior phone. These are the sections of the Dior Web site.

Clicking on a topic or section pulls together all of the relevant articles.

One article currently on-site is “in real time,” a live-stream of the fall/winter 2012-2013 ready-to-wear collection today at 9:30 Eastern Time.

Another piece is “Miss au Pluriel,” a video and image gallery of brand ambassador Mila Kunis and the Miss Dior handbag campaign (see story).

The story “2012-1947: Now, then and back again” fully relays the history and depth of the Dior brand, which is a very important part of the magazine.

“Most media is undergoing rapid transformation today as digital convergence keeps lending to new ways for storytelling. interaction and innovation,” said Paul Farkas, president/CEO of Social.TV, New York.

“Luxury brands are now all high-powered media houses and digital magazines are one key way to attract consumers with enhanced and extended content,” he said.

Storied telling
DiorMag is one in a few brands that are upping connectivity through online publications.

For example, French fashion brand Chanel’s Chanel News site has a presence as its own site as well as on the brand’s mobile application.

Consumers can learn about the brand history, catch up on current news and see exclusive content.

In fact, Chanel’s new video for its Boy handbag collection, “My New Friend Boy” was released on the Chanel News site (see story).

In addition, Christian Louboutin has its own “Louboutin Times” newspaper that it uses to relay information and exclusive content.

“This is the next generation of digital marketing,” said Chris Ramey, president of Affluent Insights, Miami.

“Ease of shopping, along with speed and pleasure, add value to luxury brand magazine,” he said.

However, there are some drawbacks to a digital magazine.

“There are some clunky areas that will be fixed, and their contents page will become more attractive,” Mr. Ramey said. “A couple times I found myself back on the site rather than the magazine – and it wasn’t always natural where to explore next.”

However, Dior, Chanel and Louboutin have something that other brands do not – their history.

Legacy and heritage are two of the main weapons that old luxury brands have in their arsenal, per Luxury Institute’s Mr. Pedraza.

“This isn’t for every brand,” Mr. Pedraza said. “If you’re not well historically-endowed, you’ll have a hard time getting this across.

“However, Dior is fortunate that it has this legacy that it can draw on and contemporize,” he said.

http://www.luxurydaily.com/what-diormag-says-about-the-brand/

July 1, 2011

Mobile marketing equally important for luxury consumers, employees: Luxury Institute exec

By Kayla Hutzler
Luxury Daily
June 30, 2011

NEW YORK – For luxury brands, integrating mobile marketing is just as important for employees as it is for consumers, according to a speaker at the Luxury Interactive conference.

Mobile should be a focus for luxury brands since data continues to prove that upscale consumers are downloading and using branded mobile applications at increasing rates. Mobile should also be used by sales professionals to increase productivity and create stronger customer relationships.

“In today’s highly commoditized luxury world, brands need to focus not only on outperforming the competition but also out-behaving them,” said Milton Pedraza, CEO of the Luxury Institute, New York.

“Ritz-Carlton, Apple and Nordstrom are not perfect, but the probability that consumers are going to have an extraordinary customer service experience with them is high, as compared to their competitors,” he said.

The Luxury Institute conducts research on wealthy consumer behaviors and spending habits and helps determine customer experience best practices.

Sales drool
Beneficial customer relationships can be formed more easily and at greater rates when employees use mobile devices.

“Mobile devices are for building [personal] relationships,” Mr. Pedraza said.

To optimize the use of mobile by employees, Mr. Pedraza suggested a few tips for luxury brands.

When an employee can access a customer’s past spending habits and provide him or her with personalized suggestions and support, a long-term customer relationship can be formed.

Hence, brands should look to create a customer database that employees can access via search on a mobile device.

For example, luxury department store chain Nordstrom recently revealed plans to start using iPod touch devices to quickly and effectively help customers check-out and find products in-store.

Inventory information for the sales professional’s store location, as well as nearby stores, should be available at the employee’s fingertips, as well as the option to order a particular item for a customer.

Employees should also have access to customer relationship metrics through mobile apps.

“We believe that you need to use these mobile devices to deliver real-time feedback to your sales professionals on data capture, net sales, products sold and clients,” Mr. Pedraza said.

“This is not just data or a mobile device, it is a great tool for sales professionals to self-assess and increase productivity,” he said.

Appy hour
Twenty-nine percent of wealthy consumers are downloading and using luxury branded mobile apps, according to Mr. Pedraza.

There are three main things that wealthy consumers expect from these apps: fast download time, exclusivity and customization options and easy access to customer service representatives.

“You need to find your point in mobile where you get the most leverage,” Mr. Pedraza said.

Overall, a brand’s ultimate goal should be to increase the customer experience.

Mobile apps should make it easy for consumers to research, shop, reach customer representatives and complete transactions.

“A brand’s focus should be to create extraordinary mobile experiences for both the sales associates and the customers,” Mr. Pedraza said.

“They can do this by focusing on what builds relationships and executing the fundamentals extraordinarily well,” he said.

http://www.luxurydaily.com/mobile-apps-equally-important-for-employees-consumers-expert/

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