NEW YORK — Designer brands still have a ways to go before they please the country’s wealthiest shoppers.
Despite consumers’ growing expectation of a pleasing experience when they shop for apparel, among other things, the offer of skilled salespeople, satisfying surroundings and effective troubleshooting are not necessarily sparking more purchases of designer duds by the most affluent Americans.
Ferragamo was the apparel brand affluent shoppers viewed most favorably among 16 designer names they rated for customer service, yet it was only the 11th most frequently purchased of those labels in 2005. The Louis Vuitton experience was rated second, while the brand of apparel was bought sixth most often last year, and Hermès came in third, but its purchase incidence placed 12th.
That sort of gap was illuminated in the Luxury Institute’s first study of the way designer fashion brands are experienced by adults who fall in the top 10 percent of the country’s households ranked by wealth, those with annual household income of at least $250,000 and net worth of a least $750,000, including home equity. The research was conducted in December and January among 2,114 people, ages 21 and older, with median household income of $395,000 and median net worth of $2 million. About half, or 49 percent, of the participants were women.
At the other end of the customer experience/purchase-incident dynamic, Polo Ralph Lauren was the brand of designer apparel purchased most often by wealthy consumers in 2005, but was rated only 13th for customer experience, and Calvin Klein had the second-highest incidence of purchase, but was ranked last in the realm of experience.
The 16 brands evaluated in the Luxury Institute study were chosen from an initial list of 20 names it identified as apparel brands because they registered enough awareness among participants to produce a statistically reliable response. “We’ve found in department stores, sales associates didn’t have knowledge of the product comparable with associates in our own stores,” noted Nancy Murray, Polo’s senior vice president of public relations and financial communications. In response, Murray said, two years ago the company began placing shop managers in department stores where there’s strong demand for Polo Ralph Lauren products, an effort it renews with the addition of managers every six months. The goal is to better connect with those shoppers.
The wide availability of Calvin Klein and Polo Ralph Lauren goods at discounters, from T.J. Maxx to Costco, is influencing the level of service shoppers associate with those fashion brands, observed Milton Pedraza, chief executive officer of the Luxury Institute.
“We’ve taken an aggressive stance and dramatically shrunken the brand’s presence in traditional off-price chains like T.J. Maxx, versus three years ago,” Murray said, but did not specify. She added, “We do not make goods for Costco or provide them with goods directly or through licensees.”
With luxury products generally being produced in greater volumes and distributed more widely than they have been in decades past, Pedraza said, “the question is how [else] are you going to differentiate your brand? I believe we’ll see a stronger correlation between customer service and purchase incidence in coming years.”
In fact, there is already some evidence of a service/purchase relationship developing between a handful of brands and their wealthiest customers: Coach, Giorgio Armani, Gucci and Christian Dior.
For each of those names, there was a variation of no more than two rankings between the customer’s experience and purchase incidence. The Armani brand was ranked fifth in both categories.
For a few more brands — Chanel, Burberry and Yves Saint Laurent — there was a difference of three places between consumers’ ratings of the two qualities.
Robert Triefus, executive vice president of worldwide communications at Giorgio Armani SpA, said in an interview in July that higher-end customers were seeking elevated levels of service and products, a trend that prompted Armani to introduce made-to-measure apparel and jewelry.
Most significant in creating a sense of satisfaction for affluent apparel shoppers, Pedraza noted, were sales associates who provided good service, followed by salespeople whom the shoppers trusted to convey reliable information. In research conducted in the spring and published in October by Yankelovich Inc., two-thirds, or 2,783 of 4,354 consumers ages 16 and older, said if they are getting bad service, they will leave a store — even if it has exactly what they’re looking for.