“Millennial and Gen Z consumers are embracing luxury fashion. The average luxury consumer in these generations owns nine luxury fashion items across accessories, apparel, and footwear, according to A Millennial Approach to Luxury, a recent report from The NPD Group and Stylitics. But, they have a different style when it comes to the purchase journey. This younger luxury consumer favors the convenience and extensive browsing ability afforded to them by online shopping, but also appreciates the luxury in-store experience.”
The affluent consumers at the top 20% of household incomes are sitting pretty financially and their numbers are growing. But it’s not the affluents’ positive financial circumstances that will influence their spending on luxury in 2016. Rather, it will be their mood, feeling and mindset. This new trend report, Brand Stories that Sell to HENRYs: Marketing Luxury in a Brand New Style for High-Earners-Not-Rich-Yet Consumers, reveals how to link brands with the new psychology of today’s largest and most profitable consumer segment: The HENRYs – high-earners-not-rich-yet.
Retailers who are wanting to lure luxury shoppers should arm their sales associates with mobile devices, according to new research. High-end shoppers are savvy, particular and use mobile devices to do their homework before making a purchase. The majority of luxury customers are more willing to interact with a sales associate equipped with a mobile device, as there is a lack of trust between luxury customers and sales associates over product knowledge.
It turns out that wealthy consumers are just as likely as the rest of us to be tempted by a good bargain while they’re shopping. Emarketer recently summarized the Luxury Institute’s findings regarding high-income consumers and their purchasing behaviors. Lately, mobile devices are more important in the purchase funnel for these consumers, especially if they encounter a discount in this channel.
Consumers with household incomes exceeding $250,000 spend more time and money managing their wealth than the rest of us. They also pay attention to advertising and hire qualified professionals to help them with their short and long-term financial plans. In 2013, financial services groups can improve their revenues and market share by promoting their services to affluent consumers who believe the economy has officially turned the corner.
Luxury Brand Retailers can Enhance Relationships with Affluent Customers through Careful Mobile Strategy
Wealthy Americans have been at the forefront of smartphone app use and m-commerce, a trend that is likely to continue. 72% of those affluent smartphone owners who shop via their device said there was no upper limit to what they would be willing to spend on an m-commerce purchase. Yet only a small number of wealthy smartphone owners (12%) have downloaded a luxury brand’s app, representing an opportunity for luxury retailers.
During the recession, ultra-affluent consumers cut back on spending. These cutbacks weren’t made out of necessity. The super-rich reduced spending because many consumers frowned on conspicuous consumption. The latest data from American Express indicates that the sentiment of affluent consumers is changing.
Evidence of “frugal fatigue” resulting from the past two years of reduced spending surfaced in a new survey by The American Affluence Research Center that shows plans for increased spending in 17 product categories by affluent and luxury consumers. The new survey indicates the concepts of “new normal,” “stealth wealth,” and “luxury shame,” to the limited extent they existed, have been replaced by “frugal fatigue” among many luxury and affluent consumers. About 56% believe they are doing their part to help the environment, while 30% feel they should be doing more. The most commonly owned green items are compact fluorescent light bulbs (45%), low flow toilets or faucets (44%), and EnergyStar appliances (40%). Green cleaning products (27%) was the only other item owned by more than 10%. The most frequently anticipated purchases are a hybrid automobile (24%) and EnergyStar appliances (22%).
In a new survey among affluent luxury consumers, some 78% of affluent consumers have at least one social networking profile (usually on Facebook). From the marketers’ point of view, social networking sites seem the logical place to close sales. However, expecting to generate sales with a Facebook page is a misunderstanding of how affluents actually use social media, according to Pam Danziger, president of Unity Marketing and author of the new trend report on the luxury market. “Social media is most valuable to luxury marketers as a way to listen to their customers, not about finding another channel through which to sell to them,” as most affluent consumers use social media “as one more tool to gather information to make purchase decisions.”
Earlier this week, I highlighted several studies that pointed to a subdued holiday 2009 season. But other recently published studies pinpoint a few demographic groups who are still willing to spend and plan to increase expenses over the next couple of months. Not surprisingly, these consumers are generally younger or affluent.
There are clear signs that the luxury sector of the home furnishings market is recovering from the recession. In the first half of 2009, there has been an increase in spending on luxury home furnishings and decor by affluent consumers, according to the latest tracking study of affluent luxury consumer purchases conducted by Unity Marketing.