There’s a lot of data out there on consumers, and there are thousands of ways to leverage that data. But are companies approaching data science in a way that translates to sales?
This was one of the questions Brian Buchwald, cofounder and chief executive officer of Bomoda, a consumer intelligence firm, asked in developing a tool aimed at helping companies use data science to bolster sales.
Bomoda just released a “Blueprint” report, which combines data gathered from in-depth surveys and market reports to help companies understand consumer behavior. The company chose the luxury market in China as its first subject, and some of the insights were eye-opening while other results were in line with expectations.
For example, the report revealed that Chanel is the “most prominent luxury brand in the eyes of Chinese consumers.” The high-end brand is ranked number one in brand awareness, and Bomoda found that 50 percent of respondents have bought some type of Chanel-branded goods before.
Here, the top 10 luxury brands in China ranked by brand awareness:
5. Louis Vuitton
The research, which resulted in thousands of data points from a sample of over 2,200 participants, also showed when consumers of luxury goods in China search for a brand’s Chinese name, they are “34 percent more likely to buy for authenticity rather than price.” And in contrast to other regions and countries, Chinese luxury consumers view Tory Burch “much more favorably as a luxury brand” than Kate Spade or Michael Kors.
In regard to perception and how luxury brands stack up against one another, Hermès, Chanel, Louis Vuitton and Prada were seen as having greater luxury cachet than brands such as Roberto Cavalli, Tom Ford, Michael Kors and Valentino. This shows Chinese consumers may have a high-level of awareness of a luxury brand such as Valentino, for example, but still perceive it differently against other brands in the market.
In an interview, Buchwald said Bomoda’s approach helps companies gain better insight into consumers because it culls information on a deeper level — a blend of data and behavioral science.
Why China as a first test of this tool? Buchwald said China is a big market, and an important one too. Indeed, luxury companies depend upon Chinese tourists for a large portion of sales. “Chinese consumers are massively important, but they are also misunderstood,” he added.
Bomoda’s 2015 China Luxury Blueprint exposed some other surprises and insights in the area of social media, blogging and advertising. The report noted if a luxury brand “engages too much with Chinese consumers on certain Chinese social media sites, this may backfire and negatively impact the brand’s sales potential. This finding runs counter to a practice that is commonly and effectively used by these same luxury brands in the West to boost sales.”
The report also said “brands looking to increase brand perception should work with online fashion influencers. However, brands looking to directly impact purchase behavior should eschew fashion influencers and instead partner with well-known models.”
Additionally, the research revealed that Valentino, Chanel, Dior, Hugo Boss, Hermès, Stella McCartney and Céline were some of the brands that had the highest percentage of sales in retail stores in China while Jimmy Choo, Alexander Wang, Kate Spade, Moncler and Michael Kors garnered higher sales from e-commerce Web sites outside of China.