When it comes to luxury marketing, it really does pay to know the targeted consumer.
That’s because all luxury consumers aren’t alike, according to a new survey done by The Shullman Research Center. Bob Shullman, in a presentation for the Luxury Marketing Council on Wednesday at the New York Athletic Club, said the differences — which depend on household income, overall wealth, age and gender — present a challenge as well as an opportunity for luxury marketers.
Among the general takeaways from the survey: Amazon is more popular than Wal-Mart; luxury consumers prefer buying for themselves rather than for others; the potential for higher taxes is slightly tilting the consumer toward a mind-set of spending less, and upscale luxury consumers (those with more than $250,000 in annual household income) are more optimistic about the economy and their own personal financial situations.
By gender, with an income bracket of $250,000-plus, 46 percent of men were either very optimistic or optimistic about the economy, compared with 21 percent of women. In contrast, 37 percent of women in the same income bracket reported that they were pessimistic about the economy, compared with 30 percent of men who shared that viewpoint. The drill down by age, in the same $250,000-plus income bracket, shows younger consumers are more optimistic than their older counterparts: 55 percent of those under 35 years old were very optimistic or optimistic about the economy compared with 13 percent who said they were pessimistic; those between ages 35 and 54 were split with 31 percent reporting optimism versus 34 percent citing pessimism, and 45 percent of those over age 55 leaned toward pessimism versus 25 percent who said they were optimistic.
Shullman said the older consumers may be more pessimistic due to “more experience [and] more bumps” along the way.
Among respondents with $250,000-plus in annual household income, of those who said they are millionaires, 39 percent said they were either very optimistic or optimistic about the economy, versus 35 percent who said they were pessimistic about the economy. In the same income bracket, of those who said they are “nonmillionaires,” 29 percent were very optimistic or optimistic versus 30 percent who cited pessimism.
Amazon was the retail winner across the board for all income brackets, beating Wal-Mart and Target in third place. Home Depot was in fourth place and Best Buy in fifth, with eBay rounding out the top six places shopped.
As for shopping plans over the next 12 months, 8 percent in the $75,000-plus income bracket plan to buy designer apparel or accessories, versus 12 percent in the $250,000-plus level and 15 percent in the $500,000 annual income range.
The percentages were in the same upward trend for plans to buy jewelry costing $500 or more: 10 percent in the $75,000-plus level, versus 17 percent of those at $250,000-plus and 26 percent at $500,000-plus. And for purchases of premium cosmetics, 10 percent in the $75,000-plus range plan to make a purchase in the next 12 months, versus 21 percent at the $250,000-plus level and 25 percent at $500,000-plus.
All respondents said they’ve bought luxury products or services in the past 12 months. At the $75,000-plus bracket, 25 percent said the purchase was made traditionally, while 24 percent said the buy was made digitally. In the $250,000-plus level, 47 percent said purchases were made traditionally versus 33 percent made digitally. For those in the $500,000-plus bracket, 57 percent chose brick-and-mortar versus 44 percent who said they bought via a digital device.
The top category for the most-recent luxury purchase across all income levels was designer apparel or accessories. For those at $75,000-plus bracket, second was fine jewelry followed by premium cosmetics, premium fragrances and a fine watch. In the $250,000-plus level, second was premium cosmetics, followed by fine jewelry, premium fragrances and a fine watch. In the $500,000-plus income level, second was fine jewelry, followed by premium fragrances and a tie between a fine watch and premium cosmetics.
Also interesting for luxury marketers were the consumers’ own descriptors of luxury: Words used by both men and women regardless of income bracket were best, comfortable, designer, nice and quality. Of those in the $250,000-plus income bracket, women and men chose different descriptors: Women used descriptors such as house, beautiful, pampered, furs, relaxing, cashmere and elegant; men more often said value, top, leather, diamonds, waste, overpriced and Mercedes. Common descriptors used by both genders in the same $250,000-plus bracket were quality, fancy, nice, comfortable, fine, best and rich.
Shullman concluded that marketers of products where “one size fits all” can rely on the common descriptors, but should rely on gender-preferred descriptors if promoting to a targeted audience by gender and income.
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)