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LUXURY CONSUMER INSIGHTS How the Truly Affluent Shop Luxury Online
EXCLUSIVELY FOR PLATINUM® AND CENTURION® MEMBERS FROM AMERICAN EXPRESS® MAGAZINES
Preview of the latest LAB online study: the ONLINE LUXURY INDEX 2013
LAB europe
LUXURY ADVISORY BOARD 2013
&
LUXURY CONSUMER INSIGHTS Contents § Methodology § Audience Profile § Trends: 2011 vs. 2013, Consumer Behavior
§ Comparison Online / Offline purchases
§ Breakdown: product segments, frequency and spending limits
§ Best shopping experiences
§ Last but not least: how to reach this potential
LUXURY CONSUMER INSIGHTS How the Truly Affluent Shop Luxury Online
methodology
LAB europe
LUXURY ADVISORY BOARD 2013
§ Do luxury consumers purchase high-end luxury products online?
§ If so, where do they draw the line? § How much is the online share compared to their total
expenditure for luxury products? § What about off-line? § Which online channels are preferred? § Which product categories?
Methodology What is important for us to find out?
Field time: 16-26 May 2013 Field:
n = 188 CENTURION
n = 397 DEPARTURES
n = 585 TOTAL
United Kingdom
33%
Germany 18%
Italy 8%
The Netherland
s 8%
Sweden 7%
Other 7%
Switzerland 6%
France 4%
Spain 2%
Finland 2%
Austria 2% Denmark
2%
Middle East Region
1%
5
Methodology Origin
47 years
€ 986,000 Gross HHI
Highly affluent, credit worthy and high spending Cardmembers
= REAL HIGH-END LUXURY CONSUMERS
46 years
€ 369,000 Gross HHI
HNWI HNWI
HNWI HNWI
6
Methodology P#TINUM and CENTURION as ‘Filter’
LUXURY CONSUMER INSIGHTS How the Truly Affluent Shop Luxury Online
Audience profile
LAB europe
LUXURY ADVISORY BOARD 2013
8
HHI AVERAGE CONTINENTAL EUROPE
UNITED KINGDOM
HHI TOTAL € 564,000 € 594,000 € 526,000 DEPARTURES € 369,000 € 357,000 € 396,000 CENTURION € 986,000 € 1,216,000 € 758,000
Compared to those who participate in the print surveys, the Online panel is similarly affluent
8
audience profile Average House Hold Income (Gross)
9
Age AVERAGE CONTINENTAL EUROPE
UNITED KINGDOM
AGE TOTAL 46.5 46.4 46.5 DEPARTURES 46.2 45.8 46.5 CENTURION 47.3 48 46.5
Compared to those who participate in the print surveys, the Online panel is 5 years younger on average (with the majority of 72% between 35 and 54 years).
9
Consumer profile Age
10
60% own both – a
Smartphone & Tablet
49% 60%
14% 74%
78%
41% 58%
80%
Smartphone, Tablet & Smartphone & Tablet
Smart TV Tablet
Smartphone
Laptop & Desktop Desktop
Laptop
OWNERSHIP OF DEVICES IN %
Consumer profile High Acceptance of Technology
LUXURY CONSUMER INSIGHTS How the Truly Affluent Shop Luxury Online
Trends: 2011 vs. 2013 Consumer shopping behavior
LAB europe
LUXURY ADVISORY BOARD 2013
Shopping Luxury Products Online Now Widely Accepted Willingness has increaseD
In 2011, 44% stated that they already bought luxury brand products online
25% considered this for the future
In 2013, 86% of these affluent consumers shop luxury products online
Today, 41% admit that their willingness to buy luxury products online has increase in the last 2 years.
2011 2013 yesterday today
12 Source: 2011, 2013 LAB Europe
Luxury Consumers are Multi^Channel Shoppers Online Frequency set to increase
22% 34% 35%
44%
38% 58%
74%
Smartphone Tablet
Desktop Laptop
MOBILE ONLINE
OFFLINE In-Store
LUXURY ITEMS % SHOPPING AT LEAST ONCE A MONTH
% WHO WILL SHOP MORE OFTEN IN THE FUTURE
28% 34%
20% 27%
38% 41%
16%
Offline retail remains No. 1 retail channel, but Online shopping frequency sees 3 times the growth. Mobile, especially via Tablet gaining Momentum.
13
50% or more
30%-40%
10%-20%
0% percent
28%
27%
38%
8%
TOTAL
The majority of 65% spends 10-40% of their total luxury budget online
Spending On Luxury Products Online ONLINE PORTION OF TOTAL LUXURY Spend?
Approximately what percentage of your total expenditure on luxury items do you spend online?
On average: 32% of total luxury expenditure happens Online 14
15
RESEARCH before purchasing ONLINE
86% of respondents research often, very often or always before they order a product ONLINE
59%
20%
11%
6%
3%
46%
27%
11%
8%
8%
51%
24%
11%
8%
7%
Always
Very o$en
O$en
Occasionally
Never
TOTAL Continental Europe United Kingdom
RESEARCH BEFORE PURCHASING ONLINE
16
RESEARCH before purchasing in-store
82% of respondents research often, very often or always before they order a product IN-STORE.
47%
28%
12%
10%
3%
31%
32%
17%
13%
6%
37%
30%
15%
12%
5%
Always
Very o$en
O$en
Occasionally
Never
RESEARCH BEFORE PURCHASING IN-STORE
57%
31%
45%
57%
70%
Any of these (given authenticity)
Off-price online luxury retailers/shopping communities
Online Only luxury retail offering multiple brands
Online shops of retail w/ physical locations
Brand's own website/shop
17
Preferred online shopping channel
e.g. boss.com, tiffany.com,...
e.g. harrods.com, saksfi#havenue.com,...
e.g. net-a-porter.com, stylebop.com, ...
e.g. vente-privee.com, myhabit.com, ...
PREFERRED LUXURY SHOPPING ONLINE RETAIL CHANNELS (RESPONDENTS IN %)
‘As long as I can be certain that I will receive the original and not a replica/
copy, I have no problem purchasing luxury items through any of these.’
LUXURY CONSUMER INSIGHTS How the Truly Affluent Shop Luxury Online
BREAKDOWN: Product segments, frequency,
and spending limits
LAB europe
LUXURY ADVISORY BOARD 2013
19
Luxury and general product categories
% RESPONDENTS SHOPPING IN MULTIPLE CATEGORIES
22%
24%
32%
31%
37%
52%
57%
64%
64%
74%
80%
64%
91%
95%
19%
20% 21%
25%
25%
39% 45%
50%
55% 56%
59%
61%
78%
86%
Jewellery
Watches
Furniture
Handbags
Interior Décor
Shoes
Accessories
Beauty Products/Cosmetics
Food/Delicacies/Specialty
Apparel/Clothing
Consumer Electronics
Wine/Champagne/Spirits
More than 1 category
At least 1 category
LUXURY ITEMS GENERAL ITEMS
RANKING LUXURY PRODUCTS
% ORDER/HAVE
ORDERED Apparel/Clothing 56% Beauty Products/Cosmetics 50% Accessories 45% Shoes 39% Handbags 25% Interior Décor 25% Furniture 21% Watches 20% Jewellery 19%
LUXURY CATEGORIES (EXCLUDING FMCG)
RANKING
20
Top Categories 2011 2013 % INCREASE
Consumer Electronics 73% 79% +8% Apparel 56% 75% +34% Wine, Champagne & Spirits 52% 62% +19% Beauty Products/Cosmetics 45% 63% +40% Food/Delicacies/Groceries 38% 52% +26% Shoes 36% 51% +41%
Watches 16% 27% +69% Jewellery 12% 21% +75%
Online Shopping Q2. 2013 vs. Q.2 2011 Trending INCREASE ACROSS ALL SEGMENTS
Source: 2011, 2013 LAB Europe
21
Growth potential across all categories % PARTICIPANTS TOTAL POTENTIAL ACROSS ALL CATEGORIES Ranked by current online customers…
19%
20%
21%
25%
25%
39%
45%
50%
55%
56%
59%
61%
25%
26%
30%
28%
30%
23%
28%
23%
21%
19%
21%
20%
56%
54%
49%
47%
45%
38%
27%
27%
24%
26%
19%
19%
Jewellery
Watches
Furniture
Handbags
Interior Décor
Shoes
Accessories
Beauty Products/Cosmetics
Food/Delicacies/Specialty Foods
Apparel/Clothing
Consumer Electronics
Wine/Champagne/Spirits
HAVE ORDERED CONSIDER ORDERING Neither/Nor
”
Big Ticket Items Online? Most Definitely! The Possibilities Are Unlimited! Here is a selection of original open answers from LAB members…
What is the most you spent on a single luxury
online purchase?
“Wrist watch €3,500”
“Vintage Charles Eames chairs
€8,000”
“Louis Vui&on bag €3,000”
“Women’s costume €5,000”
“Clothing €1,500”
“Wine €20,000”
“Furniture €60,000”
“Watch €35,000”
“YSL shoes €650”
“Boat €2,600,000”
“Diamond €12,500,000”
“Diamond €25,000”
“iPad-Tablet €800”
“Flight tickets €10,000”
Open Question Participation: CEN: 82% DEP: 77%
“Designer Bag £15,000”
“Powerplate €5,000”
“Louis Vui&on Trunk €15,000”
“Vacation Rental €15,000”
“Car €120,000”
“Perfume €165”
“Champagne €50”
“Diamond necklace €23,000”
“ 22
23
26,5% 28,6% 22,4% 22,5%
43,3%
32,8%
19,3%
4,9%
What Is The Spending Threshold? Threshold quantified in brackets
CENTURION €9,700
DEPARTURES € 3,400
HIGHEST AMOUNT EVER SPENT ONLINE - AVERAGED
24
What is the most you spent on a single luxury online purchase, and what was it? Highest amounts spent on jewels & watches
18.000 €
165 €
675 €
2.112 €
2.163 €
2.650 €
3.200 €
5.943 €
8.700 €
11.755 €
12.000 €
Other
Beauty products
shoes
accessories
clothing
technology
Wine/Spirits
bags
jewellery
furniture
watches
CENTURION
3.800 €
590 €
625 €
625 €
670 €
930 €
1.260 €
1.890 €
3.200 €
3.800 €
5.560 €
5.830 €
other
shoes
accessories
food
beauty products
wine/spirits
clothing
technology
bags
furniture/interior décor
watches
jewellery
DEPARTURES
CENTURION Total Average
€9,700
DEPARTURES Total Average
€ 3,400
25
What Was Your Best Online shopping experience and why?
26
What was your best online shopping experience, and why? One participant delivers a great summary…
“1. Amazon. The breadth of product is incredible. And if Amazon Prime, then shipping usually free. Stores my credit card details. While not in the luxury bracket per se, I would estimate that I spend on general merchandise etc... with Amazon $20,000 p.a. 2. Ocado. So much be#er than any of the supermarket sites. Keeps my favourites, credit card details etc... 3. Burberry. If you cannot find it in store, you can usually find it on line with Burberry. And the runway to reality/made to order following a runway show to buy before it hits the bricks and mortar store is great. Plus, it is not just an e-commerce/digital commerce site. There are also brand experiences.”
”
“
27
Online buying from Ralph Lauren store is a nice experience, you get exactly what you see
women handbag - Parazul - saw them in the Caribbean, could not find locally. Online was perfect.
marks and spencer - even when things go wrong they fix it
Best Online Shopping Experience?
Creme De La Mer due to follow up service
HUGO BOSS online store, good and clear layout, excellent customers' relations
eBay and Amazon for everyday, but Prada is a good luxury site. Levenger. Simple and offers advantages, rather than being a pale imitation of the store.
Good and fast service is always a good experience, and that your additional questions are quickly answered by email. Best so far Saint Laurent.
Mr Porter: very easy and excellent service, very fast. Ralph Lauren: Excellent service.
Hermes; the colour, creativity and a calm website. It matched the experience in store.
Moët & Chandon Group vintage Champagne. Good website, efficient delivery, great packaging.
28
Believe it or not, Ocado - easy website, lots of options, lots of 'did you forget' things which make 'spontaneous' shopping easy, lots of accurate recommendations. (any shop that can do proper recommendations is great for me, I am a lazy shopper and I like others to 'shop' for me)
Purchase from Apple.com - when spending a lot of money it is good to know a site is secure, confirmation emails are received, and payment is to a trusted brand you recognise. I could have made purchase elsewhere and probably saved some money, but I'm willing to pay for security.
Ordering recent designer clothing from yoox.com, got items I haven't found in store because they were sold out.
Free delivery, free returns - no questions asked 28 day return period
I have had many and mostly due to quick delivery, personal service, good prices and special surprise treats inside the boxes.
Several. What they have in common: Excellent service, personal a#ention like genuine handwri#en thank-you notes with the order, calling you if necessary etc.
Buying my Ralph Lauren Pyjamas from a website called Matches as American Express gave me 20% off my order for being a Platinum Charge Card member.
Best Online Shopping Experience?
traditional marketing as basis
29
39%
49%
59%
72%
83%
Internet
TV
Newspapers
Magazines
DEPARTURES/CENTURION
% LAB AGREEMENT: ADVERTISING IN THE FOLLOWING MEDIA IS TRUSTWORTHY AND RELIABLE...
PROMOTIONS THAT TRIGGER THE RESEARCH AND/OR PURCHASE OF LUXURY PRODUCTS DEPARTURES CENTURION
1. Advertisement in DEPARTURES/CENTURION 66% 68% 2. Advertisement in magazines 64% 60% 3. Advertisements in newspapers 46% 42% 4. Advertisements on a website 42% 42%
Online media comparison
30
80%
35%
CENTURION website
Internet
77%
41%
DEPARTURES website
Internet
Luxury brands need to place online campaigns in a fi%ing and trusted environment in order not to devalue their brand image.
% LAB AGREEMENT: ADVERTISING IN THE FOLLOWING MEDIA IS TRUSTWORTHY AND RELIABLE...
PRINT = BASIS
31
Crossmedia is the solution
ONLINE
PURCHASE
RESEARCH ONLINE / IN-‐STORE
Appendix
33
34
What is the most you spent on a single luxury online purchase, and what was it? MOST FREQUENT MENTIONS
13%
0%
0%
1%
1%
2%
4%
4%
4%
6%
7%
8%
8%
10%
31%
other
motoring
boat
accessories
food
beauty products
jewellery
shoes
travel
bags
clothing
furniture/interior décor
wine/spirits
watches
technology
DEPARTURES
15%
1%
1%
2%
2%
3%
3%
5%
6%
7%
7%
8%
15%
26%
Other
Beauty products
diamond
accessories
jewellery
shoes
travel
Motoring
furniture
bags
Wine/Spirits
clothing
watches
technology CENTURION
35
What is the most you spent on a single luxury online purchase, and what was it?
13%
0%
0%
1%
1%
2%
4%
4%
4%
6%
7%
8%
8%
10%
31%
other
motoring
boat
accessories
food
beauty products
jewellery
shoes
travel
bags
clothing
furniture/interior décor
wine/spirits
watches
technology
DEPARTURES
3.800 €
590 €
625 €
625 €
670 €
930 €
1.260 €
1.890 €
3.200 €
3.800 €
5.560 €
5.830 €
other
shoes
accessories
food
beauty products
wine/spirits
clothing
technology
bags
furniture/interior décor
watches
jewellery
36
What is the most you spent on a single luxury online purchase, and what was it?
18.000 €
165 €
675 €
2.112 €
2.163 €
2.650 €
3.200 €
5.943 €
8.700 €
11.755 €
12.000 €
Other
Beauty products
shoes
accessories
clothing
technology
Wine/Spirits
bags
jewellery
furniture
watches
CENTURION
15%
1%
1%
2%
2%
3%
3%
5%
6%
7%
7%
8%
15%
26%
Other
Beauty products
diamond
accessories
jewellery
shoes
travel
Motoring
furniture
bags
Wine/Spirits
clothing
watches
technology
EXCERPT - RANKING
37
Luxury Categories (EXCLUDING FMCG) ADDITONAL LUXURY ONLINE BUYERS
RANKING LUXURY PRODUCTS
% ORDER/HAVE
ORDERED Apparel/Clothing 56% Beauty Products/Cosmetics 50% Accessories 45% Shoes 39% Handbags 25% Interior Décor 25% Furniture 21% Watches 20% Jewellery 19%
% CURRENTLY BUYING ONLINE
19%
23%
23%
25%
26%
28%
28%
30%
30%
Apparel/Clothing
Beauty Products/
Shoes
Jewellery
Watches
Handbags
Accessories
Interior Décor
Furniture
CONSIDER ORDERING
% BUYING ONLINE IN THE FUTURE
5.040 €
2.840 €
2.150 €
820 €
970 €
650 €
450 €
1.150 €
400 €
850 €
2.260 €
460 €
1.840 €
2.050 € 920 €
730 €
540 €
420 €
260 €
800 €
300 €
370 €
500 €
330 €
Watches
Furniture
Jewellery
Handbags
Interior Décor
Shoes
Accessories
Consumer Electronics
Beauty Products/Cosmetics
Wine
Apparel
Food
DEPARTURES CENTURION
1,5
2,0
2,0
2,0
2,7
4,3
6,0
8,4
10,8
10,9
12,5
16,5
Watches
Furniture
Jewellery
Handbags
Interior Décor
Shoes
Accessories
Consumer Electronics
Beauty Products/Cosmetics
Wine/Champagne/Spirits
Apparel/Clothing
Food
Total
AVERAGE NUMBER ORDERS PER YEAR
AVERAGE AMOUNT PER ORDER DEPARTURES vs. CENTURION PARTICIPANTS
Number of Orders and Amount per Order (NOT Luxury Specific) The Spending Depends On The Degree Of Affluence
38
39
Do They Shop Exclusively Online? ONLINE RETAIL special importance
% BUYING LUXURY ITEMS EXCLUSIVELY ONLINE MARKET COMPARISON
8%
11%
11%
11%
12%
15%
18%
18%
18%
20%
23%
26%
Jewellery
Furniture
Watches
Interior Décor
Handbags
Shoes
Accessories
Apparel/Clothing
Food/Delicacies/Speciality Foods
Beauty Products/Cosmetics
Wine/Champagne/Spirits
Consumer Electronics
Luxury Items
TOP 3 – LUXURY GOODS 1. Apparel/Clothing 2. Accessories 3. Shoes
40
Online buying from Ralph Lauren store is a nice experience, you get exactly what you see
women handbag - Parazul - saw them in the Caribbean, could not find locally. Online was perfect.
marks and spencer - even when things go wrong they fix it
Best Online Shopping Experience?
Creme De La Mer due to follow up service
HUGO BOSS online store, good and clear layout, excellent customers' relations
eBay and Amazon for everyday, but Prada is a good luxury site. Levenger. Simple and offers advantages, rather than being a pale imitation of the store.
Good and fast service is always a good experience, and that your additional questions are quickly answered by email. Best so far Saint Laurent.
Mr Porter: very easy and excellent service, very fast. Ralph Lauren: Excellent service.
Hermes; the colour, creativity and a calm website. It matched the experience in store.
Moët & Chandon Group vintage Champagne. Good website, efficient delivery, great packaging.
41
Believe it or not, Ocado - easy website, lots of options, lots of 'did you forget' things which make 'spontaneous' shopping easy, lots of accurate recommendations. (any shop that can do proper recommendations is great for me, I am a lazy shopper and I like others to 'shop' for me)
Purchase from Apple.com - when spending a lot of money it is good to know a site is secure, confirmation emails are received, and payment is to a trusted brand you recognise. I could have made purchase elsewhere and probably saved some money, but I'm willing to pay for security.
Ordering recent designer clothing from yoox.com, got items I haven't found in store because they were sold out.
Free delivery, free returns - no questions asked 28 day return period
I have had many and mostly due to quick delivery, personal service, good prices and special surprise treats inside the boxes.
Several. What they have in common: Excellent service, personal a#ention like genuine handwri#en thank-you notes with the order, calling you if necessary etc.
Buying my Ralph Lauren Pyjamas from a website called Matches as American Express gave me 20% off my order for being a Platinum Charge Card member.
Best Online Shopping Erfahrung?