Residents of New York and Shanghai have spent an average of between $530 and $920 on luxury goods over the last 12 months, according to the Luxury Digital Behaviour Study by digital marketing company ContactLab.
ContactLab has studied the relationship between consumers and high-end clothing and accessory products in Shanghai and New York, also measuring the positioning and appeal of 20 luxury brands. The survey was carried out through a sample of around 1,000 individuals between the ages of 25 and 54 in each city.
Shanghai confirmed its role as a haven for companies that produce high-end products: in the last 12 months, four out of five residents in the Chinese city have bought at least one luxury item, spending on average around $1,000 on their last purchase. This compares with around $500 in New York. Also, they would be willing to do so again in the next six months, planning to spend over 66 percent more than New York residents for the same type of purchase. In Shanghai, 25 percent of those intending to make a purchase in the next year said their next bag acquisition will be a gift, spending in total (for themselves or for someone else) as much as $1,700.
“Our new study on digital users and luxury brands was created to supply analysts and the market with valuable information that enables a deep understanding of consumer behavior in order to define an integrated strategy for retail and e-commerce channels, both in terms of sales, promotion and communications,” said Massimo Fubini, founder and chief executive officer of ContactLab. “We chose to analyze in detail two particularly important areas such as New York and Shanghai to understand the most significant trends in the luxury goods market.”
In Shanghai and New York, customers turn to a brand’s official Web site for information, and not necessarily its e-commerce site. Magazine recommendations and advocacy from friends and acquaintances, especially decisive for Chinese consumers, are also relevant. One out of three users in New York (35 percent) as well as in Shanghai (31 percent) chooses to be kept informed through e-mail communications sent by brands. To wit, around half of those that went to boutiques to buy a luxury good had received and opened a digital direct marketing message sent by the brand.
The range of quality and the variety on offer are a common motivation to buy online in both clusters, according to the study. Pricing and saving time are the second most important drivers in Shanghai and New York, respectively.
The availability of exclusive products, having greater discretion and privacy when buying, and being better informed about the product’s features and the variety on offer are the main draws to the online channel in New York. The product offering, as well as the buying experience, are identified with brick-and-mortar stores in China.
In New York, consumers show greater affection for brands, while fashion buying in China is closely linked to the display of one’s own spending capacity.
China continues to offer huge opportunities for high-end companies. “Identifying a strategic approach that considers the characteristics of each country remains fundamental for brands to understand their consumers, both in terms of the motivation behind the shopping experience, as well as the choices on offer, whether exclusive or overlapping, between the e-commerce channel or brick-and-mortar stores to finalize sales,” said ContactLab.