TODAY’S LUXURY PURCHASE: Research, Reviews and Deals


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This blog post was originally written by Loyalty 360 and appeared on Loyalty Management Online.

It’s no surprise that the average consumer is concerned with value in the current economic environment. Interestingly, this sentiment expands to the luxury market as well. According to a recent survey from Empathica Inc., a leading provider of Customer Experience Management (CEM) solutions, 30% of luxury consumers bragged about getting a good deal on their purchase. The Empathica Consumer Insights Study[1] of 5,000 North Americans reveals how consumers research and communicate information about their luxury purchases.
There is good value and reasoning in pursuing research on the subject of luxury retail experience and the surrounding consumer sentiment. Emmanuel Probst, Vice President of Retail at Empathica shared their interest in examining this market further, “What Empathica does best is to create an emotional connection between the brand and the consumer. Luxury retail is often where this connection is the most important, because the emotional value of a luxury brand largely outweighs the functional benefit of the products it sells.”

Researching product information, reading reviews and comparing deals is commonplace today and research shows that this extends to the luxury consumer as well. According to Empathica’s study, three in four consumers admitted to spending considerable time researching products and 45% are reading online reviews to support these purchase decisions. There is an abundance of information available from their peers; almost 75% of surveyed consumers shared that they verbally tell others about their luxury purchase, and 28% reported that they share information about their purchase via social media sites, blogs, Twitter, or Facebook. What are they sharing? Not what you might expect. Rather than touting that they spent a lot, 30% of luxury consumers bragged about getting a good deal on their purchase.

As it turns out, luxury consumers are on the lookout for a good deal as much as, if not more than, the non-luxury counterpart. In an article on the affluent customer and loyalty, Linda Dickerhoof, VIPdesk stated, “Affluent consumers are more likely than the average consumer to use coupons. With this demographic, there is no stigma related to coupons or discounts—on the contrary, coupons can be viewed as representative of a new status symbol of fiscal responsibility.” [2]

You may be further surprised to learn, who the luxury consumer is today and what inspires their purchase decisions. Contrary to what my be the typical expectation for this market Probst confirmed, “Luxury consumption spreads well beyond its core market of upper class/upper income households. Our Consumer Insight Panel survey revealed that students and people who are unemployed were an excellent target market for luxury brands. For these consumers, income hardly even matters. They indulge in luxury to reward themselves by living an extraordinary, memorable experience.”

Knowing that these luxury consumers are talking about their experience, posting information about their purchase and researching products and deals, luxury brands today must master customer communication and relationship building efforts to continue to build sales and maintain a loyal following.

“Post-purchase follow-up is so crucial today to encourage active brand advocacy. It’s necessary to ensure the entire experience — from pre-purchase research to in-store interactions with staff, to post-purchase communications — is as fluid and as simple for consumers as possible,” continued Empathica’s, Emmanuel Probst.

Unfortunately, this is still a lesson to be learned by luxury retailers as more than a third of consumers reported that a luxury retailer did not follow-up with them after their purchase. Research from the Luxury Institute found that customer attrition rates in the luxury industry are hovering between 80-90%, with 50% of shoppers with an income of at least $150,000 reporting a noticeable decline in the quality of the customer experience.[3] These luxury brands should be leading the way in optimizing the customer experience and they are missing a huge opportunity to create positive brand advocacy with a group that admits to widely sharing information about their experiences.

In a recent article for Loyalty Management magazine, How Luxury Brands Can Reinvent the Customer Experience, Mark Robeson, SVP of Sales & Marketing at VIPdesk shares, “Three principal ways in which luxury brands can take advantage of this untapped opportunity to reinvent their customer experience stand out: placing the customer experience at the heart of their enterprise, revisiting the power of personal relationships, and embracing the social and mobile revolution.” He continues, “customers who have a true human relationship with a brand typically buy double from that brand and stay loyal for a longer period of time.” [4]

[1] Empathica Consumer Insights Panel – Wave 2 2011, Issue 3.
[2] Linda Dickerhoof, “What do Affluent Customers Want from Their Loyalty Programs?” Loyalty Management, September 2011
[3]Luxury Institute’s Wealth and Luxury Trends 2012 and Beyond, October 6, 2011
[4] Mark Robeson, “How Luxury Brands Can Reinvent the Customer Experience,” Loyalty Management, January 2011

Republished with author's permission from original post.

Linda Dickerhoof
I am very happy to be working for VIPdesk as the company's Director of Marketing and Public Relations. I live in Arlington, VA and am one of a small few who can claim to be an almost-native of the Washington D.C. metro area–my family moved to the area when I was 5 years old, and I never left. I love living in the Nation's Capital and taking advantage of everything that the city has to offer.


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