Luxury Institute News

May 31, 2012

The Finer Things

If there’s one man you don’t need to define the word luxury for, it’s MILTON PEDRAZA. As CEO of the New York-based Luxury Institute, he’s the man in charge of decoding the hard-to-pin-down consumers of extravagance around the globe. He tells us just how he does that and offers a guide to his favorite city, Miami.

By Natasha Phillimore
Pacific Plus
May 2012

As experts in the industry of all things luxury go, they don’t come more knowledgeable than Milton Pedraza. He has built his fortune on the back of one of the more elusive segments of consumerism. And, somewhat remarkably, has named Ghandi–the world’s least consumption-driven person–as his inspiration.

“He’s reported to have said, ‘You have to be the change you want to see in the world,”’ says Pedraza. “We take that to heart and treat our clients the way they should treat theirs. It’s worked very well for us and has led to repeat business and a lot of referrals. It is a blessing.”

Click the link to read the entire article which includes quotes from Milton Pedraza, CEO of Luxury Institute: http://voyeur.realviewtechnologies.com/default.aspx?iid=62394&startpage=page0000098

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

Why Millennials Are Spending More Than They Earn, And Parents Are Footing The Bill

By Larissa Faw
Forbes
May 18, 2012

There’s a striking disconnect with today’s Millennials that can be best described through Steve Jobs’ infamous reality distortion field: Millennial lifestyles and spending habits do not reflect their financial realities.

The majority of the 79 million U.S. Millennials are either unemployed, underpaid, or weighed down with student loans. One in four Millennials, for instance, has more debt than savings, according to Bankrate.com. Some 94% of college students currently graduate with debt. The current unemployment rate among workers ages 20-24 is 13%, compared to 8% for older workers, according to the most recent economic data.

At the same time, Millennial college students (without full-time jobs) spend $784 a month on discretionary expenses, especially food and entertainment, according to the Mooslyvania marketing agency. Millennials are the largest demographic purchasing new technological gadgets and fashion apparel. And their spending on jewelry increased 27% in 2011, according to American Express Business Insights. They even start riots at outside retail malls over $200 limited-edition Air Jordan sneakers.

Click the link to read the entire article: http://www.forbes.com/sites/larissafaw/2012/05/18/why-millennials-are-spending-more-than-they-earn/

 

May 15, 2012

Will Christian Louboutin Beauté dilute the brand name?

By Tricia Carr
Luxury Daily
May 14, 2012

French footwear designer Christian Louboutin will begin selling beauty products in late 2013, which could leverage the brand across a mainstream category as long as it does not dilute the name.

Louboutin announced last week that it will partner with Batallure Beauty to create and market Christian Louboutin Beauté products. While some experts say this is a good move to broaden the consumer base, others feel that a beauty line could dilute the brand.

“Christian Louboutin has established a strong brand around a single product line of high-end designer shoe with the immediately-recognizable red sole,” said Karen Kreamer, president of K2 Brand Consulting, Overland Park, KS. ”Extending the brand into beauty products is a good first step before determining how, or if, the brand should be further extended.

Click the link to read the entire article which includes quotes from Milton Pedraza, CEO of Luxury Institute: http://www.luxurydaily.com/christian-louboutin-enters-beauty-biz-with/

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

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/

November 18, 2011

Luxury experiences not up to product standards: Luxury Institute

By Rachel Lamb
Luxury Daily
November 17, 2011

Luxury brands are having a hard time matching high-quality products with premium experiences, making it difficult for them to retain affluent customers, according to findings from a report by the Luxury Institute.

Customer retention is a saving grace in times of economic uncertainty since providing great experiences is what will make consumers continue buying. Personal relationships and experiences are key to this type of success.

“Products have never been a problem,” said Milton Pedraza, CEO of the Luxury Institute, New York. “The industry has gotten its act together and put out superb products in terms of craftsmanship, design and quality.

“But the problem is how to create a relationship from a human perspective,” he said. “When Zappos can out-behave luxury brands in service, there is a huge opportunity to improve human interaction.

“Wealthy shoppers want to engage with luxury brands and are willing to give them personal information if it means that it will increase their customer experience.”

Can spam

A few brands have made an impression on luxury consumers by delivering superb products and customer service.

Approximately 86 percent of consumers do not mind providing personal information to luxury firms if the result is a superior experience, according to the study.

Furthermore, 77 percent will give their email addresses and 50 percent are willing to share product preferences, birthdays and anniversary dates.

The problem is that brands often do not reach out to customers in the right way or in the right increments.

“Luxury brands spam their customers every day, and they get turned off,” Mr. Pedraza said.

“If you earn the confidence of your customer over time, you should be able to text them or call them and that is the human interaction that generates transaction and sales,” he said. “If you just send offers on a mass basis without differentiating, it really is just spam.”

There are some brands that have gone above and beyond, according to the responses by consumers in the Luxury Institute study.

Four Seasons, Ritz-Carlton, Marriott and NetJets excelled in the travel and hospitality category, while fashion brands such as Gucci, Jimmy Choo, Ralph Lauren and Rolex were at the top of their sectors.

Brickbats

Debt crisis in Europe and in the United States slowed spending during October, but not so much that sales went into negatives.

Nordstrom’s same-store sales rose 5.4 percent in October, but decreased from a 10.7 percent increase in September.

On the other hand, Saks Fifth Avenue’s comparable sales dropped to 1.8 percent in October from September’s 9.3 percent gains.

Meanwhile, Neiman Marcus reported comparable sales that grew 6.4 percent for three months ending Oct. 30.

“Customer retention is in the 10 percent–20 percent range, which is pretty dismal,” Mr. Pedraza said. “There is a lot of slowing all over the world, and BRIC markets have masked the fact that the luxury industry is slowing down dramatically in Europe and a risk of a slowdown in the U.S.

“When there is less growth, the more urgent it is to hook return customers,” he said.

The best way to do so is to provide exceptional experiences. These can come in many forms.

For example, notifications by email of early sales went out to 39 percent of wealthy shoppers this year, down from 45 percent in 2010.

Consumers do want emails, but would prefer if they were customized, the study said.

Another type of personalized service that has increased over this year is the availability of free shipping on purchases and returns.

Retailers such as Gilt Groupe and Nordstrom have used this technique to up their customer service

This is the most important “special touch” offered by luxury brands, according to the Luxury Institute.

“There is so much opportunity in the industry to retain customers,” Mr. Pedraza said. “The biggest opportunity is to take the data that is collected and use it to build long-term relationships.

“The more you know about a customer, the more you will be able to customize the offers, whether it is with a handbag or ready-to-wear,” he said.

“There is a huge opportunity, but it is being wasted by a lot of luxury brands.”

http://www.luxurydaily.com/luxury-experience-not-up-to-standards-with-products-luxury-institute/

November 14, 2011

Lagging Lexus aims at creating exciting, sporty new image

By James R. Healey and Chris Woodyard
USA Today
November 13, 2011

When Toyota was preparing for the 1989 launch of Lexus, the man appointed to birth the luxury brand, J. Davis Illingworth, often said: “We don’t have a single dissatisfied customer.” 

Disingenuous, of course, because the gestating Lexus had no customers at all. But the strongly implied remainder — “… and we intend to keep it that way” — helped raise the bar for luxury car brands.

But now, after phenomenal growth that made Lexus the top-selling luxury auto brand in the U.S. from 2001 through last year, the marque is tumbling. This year, it’s unlikely to finish better than third behind BMW and Mercedes-Benz…

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: http://www.usatoday.com/money/autos/story/2011-11-11/toyota-lexus/51188682/1

Wealthy U.S. Shoppers Weigh In on Personalized Service, Rank Luxury Brands in 16 Categories for Ability to Deliver ‘Over the Top’ Customer Experiences

(NEW YORK) Nov 14, 2011- U.S. shoppers earning at least $150,000 want to interact more closely with luxury firms, but not all brands are meeting the demand. This is among the findings of “Luxury Clienteling 2010-2011,” a new WealthSurvey from the independent and objective New York City-based Luxury Institute.

Most wealthy consumers (86%) are willing to provide personal information to luxury firms if it results in a superior experience. More than three-fourths (77%) are happy to supply their email address.

One type of personalized service found to be valued is the availability of free shipping on purchases and returns, a seemingly small but monumentally important feature.

“Consumers view free shipping as the most important ‘special touch’ that luxury firms must provide,” says Milton Pedraza, CEO of the Luxury Institute. “Nordstrom began offering free shipping and returns in August, and it’s surprising that more firms don’t do the same.”

Below are the top-ranked brands for delivering “over the top” experiences in each of the 16 luxury categories:

Leisure Travel: Hilton, Marriott, Four Seasons and Ritz-Carlton
Private Transportation: NetJets
Wine/Spirits: Grey Goose, Dom Perignon and Mondavi
Jewelry/Watches: Rolex
Home Appliances: Viking, LG, GE, Bosch and Subzero
Home Furnishings: Ethan Allen
Health & Fitness: Bally’s
Beauty/Skincare/Grooming: Clinique and Sephora
Designer Shoes: Gucci and Jimmy Choo
Designer Handbags: Coach
Fashion Apparel: Nordstrom, Gucci and Ralph Lauren
Fashion Accessories: Gucci, Coach and Oakley
Autos: Mercedes, Lexus and BMW
Technology: Apple
Personal Finance: Fidelity
Real Estate: Century 21

For greater details on clienteling best practices, 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

November 2, 2011

Wealthy European Consumers Rank Luxury Hotel, Handbag and Fashion Brands; Loro Piana Loved By Women And Men, Hermès Earns Highest Handbag Score

(NEW YORK) November 2, 2011 – A new series of Luxury Brand Status Index (LBSI) surveys from the independent and objective New York City-based Luxury Institute reveals firsthand impressions and rankings of dozens of luxury brands by high net-worth consumers from the United Kingdom, France, Germany and Italy.

Wealthy European shoppers evaluated each brand on quality, exclusivity, social status and overall ownership experience to tabulate an overall LBSI score. Also considered were price worthiness, willingness to recommend the brand and likelihood of purchase.

Based on overall LBSI scores, the top three luxury brands in each category rank as follows:

  • Hotels (26 brands): Taj Hotels Resorts and Palaces; Mandarin Oriental; Ritz-Carlton
  • Handbags (39 brands): Hermès; Tod’s; Chanel
  • Women’s Fashion (44 brands): Loro Piana; Brunello Cucinelli; Hermès
  • Men’s Fashion (35 brands): Loro Piana; Michael Kors; Brioni

Several country-specific preferences are apparent. In Women’s Fashion, Italians rank Valentino highest, Germans prefer Louis Vuitton, and Alexander McQueen earns top ranking in the U.K.  In hotels, Ritz-Carlton ranks first in France and second in the U.K. behind Mandarin Oriental.

“There is certainly a diversity of taste and preference among wealthy consumers in Europe,” says Milton Pedraza, CEO of the Luxury Institute. “Several brands have succeeded in transcending national boundaries and enjoy wide appeal among the continent’s wealthy.”

Respondents come from households with minimum annual income of €50,000, or £60,000 in the U.K. For greater details on brand rankings in each category and other purchase considerations of wealthy European consumers, 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

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