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Global Luxury AND ASSET MANAGEMENT (GLAM) MONITOR

sentiments and behavioUrs of the world’s affluent and high net worth populations

THE LUXURY CONSUMER’S MINDSET

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DEFINING LUXURY: THE LUXURY CONSUMER’S MINDSET


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Perhaps as expected, there is very little quarterly variation in how luxury brands/services are defined by affluent/HNW respondents. High price remains a relatively peripheral factor, with only 20% citing this as something which they associate with a luxury brand or service. Similarly, an average of only 24% of the total sample define a luxury brand or service as one which has a designer label, although this rose to 27% in Q1 2019.

Quality and exclusivity remain comfortably the most resonant factors among our respondents, with an average of 64% citing the quality of materials or service. Meanwhile, 55% cite exclusivity/rarity as a factor, rising highest among over-40s. Over-40s are also more likely than 18-39s to associate luxury brands/services with those which are only sold in luxury venues.

Some 31% of our respondents identify a luxury brand or service as one which stands out or is iconic, while 29% associate them with being status symbols. Men and Asian respondents in our sample are particularly likely to identify luxury brands as status symbols. Customisation (12%), packaging (7%) and celebrity endorsements (6%) are cited as luxury associations by only a minority of our sample.

Unfiltered Base:  1365 global affluent/HNWIs | Source:  LuxuryOpinions/Altiant

THE LUXURY CONSUMER’S MINDSET: SPENDING ATTITUDE 1/2


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Despite their typically high levels of disposable income, less than a fifth (19%) of our affluent/HNW sample across all three quarters say that money is no object to them. This peaks among 18-39s at 23% and falls to only 16% among over-40s. Over the three quarters of data, it appears that over-40s are more considerate with their luxury purchases, being significantly more likely than the younger cohort to say that they only occasionally spoil themselves (57% vs 46% and 53% overall). Male respondents are also more likely than women to say that money is no object or that they only occasionally spoil themselves (74% vs 69%).

These two spending approaches continue to show interesting variations by region when looking at the aggregated data across all three quarters. 79% of North Americans fall into one of these two categories, 11 percentage points higher than the other two regions. Meanwhile, Asians are the most likely group to say that they stick to a budget (20% vs 14% overall), while Europeans are the most likely bargain hunters (19% vs 15% overall). Across the three quarters so far, women are more likely than men to adopt a conservative spending approach to luxury goods and services (32% vs 26%).

There are potentially signs of a more considered approach to spending emerging from just the Q1 2019 data. The share of respondents saying that they stick to a budget or are bargain hunters rose to 32% in Q1, up from 27% the previous quarter. Whether this is just a natural variation in the data as shoppers tighten their belts in the new year will become evident in the next couple of quarters.

Unfiltered Base:  1365 global affluent/HNWIs | Source:  LuxuryOpinions/Altiant
 


 


THE LUXURY CONSUMER’S MINDSET: SPENDING ATTITUDE 2/2


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80% of our affluent/HNWI respondents for this survey agree that it is worth paying more for better quality goods, rising to 88% among North Americans. North Americans are also the most likely region to agree that luxury goods help them to feel confident, rising to 43% vs the overall average across all three quarters of 36%. 18-39s are also more likely than over-40s to agree with this statement (40% vs 33%).

While branding is evidently important in such an image-conscious industry, many luxury consumers appear to prefer discretion over demonstration. An average of 34% of our respondents across all three quarters prefer luxury products which do not have clearly branded logos/designs. Discrete and subtle brand cues are more likely to be well-received by this sizeable pool of luxury consumers. Customisation also resonates with just over a third of our respondents to this survey, 35% saying that such products appeal to them (although falling to just 30% among the European response). This metric nudged downwards for the third consecutive quarter in Q1 2019 which may be a sign of waning interest in customised products.

While 23% prefer luxury products from their home country, this metric shows considerable regional variation. From a high of 35% among the European response, it falls to just 10% among Asians, indicating how the latter region has a clear preference for internationally-made luxury goods with well-known cues such as ‘Made in Italy’. Indeed, international shopping holidays remain popular for many affluent Asian shoppers, particularly in countries such as the UK where the current exchange rate is conducive to findings bargains.

Unfiltered Base:  1365 global affluent/HNWIs | Source:  LuxuryOpinions/Altiant

 


THE LUXURY CONSUMER’S MINDSET: Luxury purchases (Past 12 Months)


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Travel remains the most popular luxury category with our panellists, with 85% having had a luxury holiday within the past year, 58% doing so multiple times. While 47% of affluent/HNW Europeans took multiple luxury travel holidays, this figure jumps to 68% among Asians, showing how prolific travellers are from key luxury hubs such as China and Japan (see Focus on Tourism section).

The next most popular categories are designer fashion (84%), high-end electronics (82%), leather goods such as handbags and alcohol (both 77%). When looking at multiple purchases across the different categories, key consumer groups for each market emerge. 18-39s are the key age cohort in all four markets, with women significantly more likely than men to be multiple purchasers in all categories except for technology.

For example, 18-39s, women and North Americans are the most likely groups to make multiple purchases of designer fashion and leather goods. Meanwhile, men are the more likely gender to make multiple luxury purchases of high-end electronics and alcohol. Automotive has the fewest annual luxury purchases, with only 46% of our sample doing so, a likely reflection on the relatively high cost of buying new cars.

Automotive and alcohol saw the largest rise in the share of non-purchasers in Q1 2019 vs the previous quarter, up by 8% and 5% respectively. This may be due to the post-Christmas lull in shopping revenues in general, but also in the case of alcohol, some consumers’ looking to improve their health in the new year.

Planned purchasing trends for the year ahead look broadly positive with only around 15% of users in each category expecting to cut back on their category purchases in the year ahead. Wealth management and travel appear to be the most favourably positioned, with fewer than 10% expecting to cut back. That wealth management saw this share drop by almost half to less than 5% in Q1 2019 vs Q4 2018 could signal a growing need among affluent/HNWIs for financial advice in these uncertain economic times. Two in five plan to increase their luxury travels over the next year, while 55% of current non-users expect to enter the market, boding well for the high-end travel industry.

Unfiltered Base:  1365 global affluent/HNWIs | Source:  LuxuryOpinions/Altiant

THE LUXURY CONSUMER’S MINDSET: Luxury Purchase Intent (Active Past 12 Months)


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Planned purchasing trends for the year ahead look broadly positive with only around 15% of users in each category expecting to cut back on their category purchases in the year ahead. Wealth management and travel appear to be the most favourably positioned, with fewer than 10% expecting to cut back. That wealth management saw this share drop by almost half to less than 5% in Q1 2019 vs Q4 2018 could signal a growing need among affluent/HNWIs for financial advice in these uncertain economic times. Two in five plan to increase their luxury travels over the next year, while 55% of current non-users expect to enter the market, boding well for the high-end travel industry.

Unfiltered Base:  1365 global affluent/HNWIs | Source:  LuxuryOpinions/Altiant


THE LUXURY CONSUMER’S MINDSET: Luxury Purchase Intent (Inactive Past 12 Months)


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Travel is also the most likely market to see a positive conversion of non-users, with 60% of the panellists who have not undertaken luxury travel planning to take a luxury trip next year.

Unfiltered Base:  720 global affluent/HNWIs who have not purchased from the selected categories | Source:  Luxury   Opinions/Altiant

THE LUXURY CONSUMER’S MINDSET: Purchase Channels


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Physical stores remain a vital part of the luxury industry, and continue to account for the majority of sales. Over the Q3 2018-Q1 2019 period, an average of 84% of our respondents had bought luxury goods/services in a physical store. However, there are signs that this is becoming less common, as the allure of shopping online rises. Q1 2019 saw the share of our respondents fall for the third consecutive quarter which, while relatively small in percentage terms, could be a signifier of shifting shopper preferences. Over-40s and women remain the most likely in-store advocates.

In each of the past three quarters, around 60% have purchased luxury goods/services online via a computer/laptop, 38% having done so via their mobile phone/tablet. Perhaps as expected, 18-39s are significantly more likely than the older cohort to be online luxury shoppers. North Americans are also most likely to be online shoppers, particularly via computers/laptops (77% did so in Q1 2019). Creating user-friendly and attractive shopping platforms for different devices is key for luxury brands and services to remain competitive in this growing part of the market, particularly in North America. 

Unfiltered Base:  1365 global affluent/HNWIs | Source:  LuxuryOpinions/Altiant

THE LUXURY CONSUMER’S MINDSET: Social Media Interactions


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With online retailing continuing to grow in popularity, social media interaction has become increasingly important for many brands via platforms such as Instagram or WeChat. Over the Q3 2018-Q1 2019 period, an average of half of our sample have liked or recommended a brand to family/friends/colleagues, while 44% have followed a brand. 18-39s and North Americans are the most likely groups to be social media advocates for luxury brands.

Meanwhile, a robust 19% of our sample say that they have purchased a luxury brand via social media over the past nine months of the study. While this figure is highest among 18-39s (24%), 16% of over-40s also do so which shows how these sites can also resonate with more mature luxury shoppers. An almost identical share and composition of our sample say that they have sent a private message to a brand via social media (19% overall). Unfiltered Base:  982 global affluent/HNWIs | Source:  LuxuryOpinions/Altiant


All research data presented in this GLAM monitor has been sourced from Altiant’s manually validated in-house panel of Affiuent and High Net Worth Individuals (HNWI), LuxuryOpinions®. This first iteration encompasses Q3 and Q4 2018, with the quantitative online survey carried out continuously over these two quarters presented. In order to protect the integrity of the data, respondents are prevented from participating in the research twice in a single year. For any additional questions about this research, please contact glam@altiant.com

 
Publications contained in the Altiant Knowledge Center are free to use, we simply require proper attribution. In no event shall Altiant be liable for any indirect, special or consequential damages in connection with any use of the provided data. Altiant does prohibit the selling of any information contained within or derived from these reports and monitors.