LUXURY CONSUMER INSIGHTS LAB LUXURY ADVISORY How the...

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


methodology

LAB europe


§  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’


Audience profile

LAB europe


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


Trends: 2011 vs. 2013 Consumer shopping behavior

LAB europe


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.’


BREAKDOWN: Product segments, frequency,

and spending limits

LAB europe


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


Food/Delicacies/Specialty Foods

Apparel/Clothing



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.


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

32

Irena Raltcheva DEPARTURES & CENTURION Magazine

[email protected]

THANK YOU!

questions?

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


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


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


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



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




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




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


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?

LUXURY CONSUMER INSIGHTS LAB LUXURY ADVISORY How the...

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