glam monitor

THE LUXURY CONSUMER’S MINDSET

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DEFINING LUXURY: THE LUXURY CONSUMER’S MINDSET


Luxury consumers use a wide variety of factors to define luxury brands/services as aspirational or premium. Interestingly, these factors go well beyond price and only 20% of our respondents cite high price as something which they associate with a luxury brand or service. Similarly, only 23% of the sample define a luxury brand or service as one which has a designer label, suggesting that luxury operators should not assume that their name alone is enough to resonate with affiuent consumers.

Quality and exclusivity are comfortably the most resonant factors among our respondents. Perhaps as expected, quality is the most widely cited factor, with 65% citing the quality of materials or service. Meanwhile, 56% cite exclusivity/rarity as a factor, rising highest among over-40s. Over-40s are also significantly more likely than 18-39s to associate luxury brands/services with those which are only sold in luxury venues. Luxury brands may sometimes need to tread the line between making themselves accessible to customers, but also maintaining a degree of scarcity and avoiding the mass-market.

Some 31% of our respondents identify a luxury brand or service as one which stands out or is iconic, with 28% associating them with being status symbols. Many luxury shoppers’ purchases are guided by clearly showing off their good taste for individual or desirable goods. Men and Asian respondents in our sample are the most likely group to identify luxury brands with those which are status symbols. Customisation (13%), packaging and celebrity endorsements (both 7%) are cited as luxury associations by only a minority of our sample. 

Unfiltered Base:  982 global affluent/HNWIs | Source:  LuxuryOpinions/Altiant

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


Despite their typically high levels of disposable income, many of our affiuent/HNW sample for this report are surprisingly discerning with their spending. Only 18% say that money is no object to them, rising to 24% of 18-39s  (compared to only 13% of over-40s). Over-40s appear to be a little more considerate with their luxury purchases, being significantly more likely than the younger cohort to say that they only occasionally spoil themselves (61% vs 47%). Our male respondents are also significantly more likely than women to fit into one of these two more conservative  categories.

Some interesting variations also emerge when looking at these first two classifications by region. Only 9% of our Asian respondents say that money is no object, much fewer than for North Americans (27%) and Europeans (17%). Instead, Asians are more likely than average to describe themselves as only occasionally spoiling themselves  (59%).

14% of our respondents describe their spending habits as mostly sticking to a budget and being a bargain hunter. Women are more likely than men to describe themselves in one of these two ways (28% vs 22%), while North Americans are the least likely of the three regions to adopt a restrained approach towards luxury spending  (19%). 

Unfiltered Base:  982 global affluent/HNWIs | Source:  LuxuryOpinions/Altiant
 



 


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


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. The onus is on brands to highlight their quality credentials to luxury consumers, for example via the materials used or the methods of  production.

 As seen earlier in this report, 28% of our respondents in this survey associate luxury brands with status symbols. A slightly higher share (36%) state that luxury goods help them to feel confident, enabling them to convey their good   taste and perhaps, wealth. 18-39s are signficantly more likely than over-40s to agree with this statement (41% vs  31%).

 Nevertheless, overt branding is not always the best way of resonating with affluent luxury consumers as 35% of our respondents to this survey 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, 36% saying that such products appeal to them (although falling to just 29% among the European response).

 The global nature of many luxury categories is reflected in the fact that only 22% prefer luxury products from their home country. While this figure reaches 33% among the European response, it falls to just 10% among Asians,  indicating how the Asian respondents show a clear preference for international luxury goods which are seen as more desirable. Indeed, many affluent Asian consumers position international shopping at the core of their international holidays, often being able to acquire cheaper luxury goods abroad than in their home  countries.

Unfiltered Base:  982 global affluent/HNWIs | Source:  LuxuryOpinions/Altiant

 


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


When looking at several categories of luxury goods or services, travel is the most popular among our panellists, with 85% having had a luxury holiday within the past year, and 59% doing so multiple times. Men (62%) and Asian respondents (71%) are the most likely group to have made multiple luxury travel purchases but engagement remains high across all regions and demographic   groups. 

Travel is closely followed by designer fashion (83%), high-end electronics (82%), leather goods such as handbags (79%) and alcohol (78%), showing that these four categories also enjoy high levels of popularity with our respondents. However, it is by analysing the composition of those making multiple purchases that the key consumer groups for each market   emerge.

For example, for designer fashion and leather goods, 18-39s, women and North Americans are the most likely groups to make multiple category purchases. Meanwhile, men are the more likely gender to make multiple luxury purchases within the high-end electronics and alcohol markets. Automotive is the category with fewest luxury purchases annually, with only 47% doing so, a reflection on the relatively high cost of buying new cars.

Unfiltered Base:  982 global affluent/HNWIs | Source:  LuxuryOpinions/Altiant

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


Planned purchasing trends for the year ahead are broadly equal across the categories, with around a third expecting to buy more, half expecting to buy about the same amount and the remaining share cutting back. The clear exception to this is travel, with 47% of current luxury travellers expecting to increase their engagement with this market next year.

Unfiltered Base:  982 global affluent/HNWIs | Source:  LuxuryOpinions/Altiant

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


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: Social Media Interactions


Despite significant media coverage questioning the ongoing viability of physical stores, it is clear that they remain vital for many luxury brands. The rise of online shopping has undoubtedly hampered footfall in retail stores, many of which are now having to adapt by offering more experiential luxury shopping practices. 85% of our respondents in this survey say that they have bought luxury goods in a physical store such as a branded store, Department Store or duty-free shop within the past 12 months.

However, the impact of online is clear as 71% of respondents have made a luxury purchase online over the period, 60% having done so via a computer/laptop and 38% via a phone/tablet. Perhaps as expected, 18-39s are significantly more likely than the older cohort to be online luxury shoppers. 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.

Unfiltered Base:  982 global affluent/HNWIs | Source:  LuxuryOpinions/Altiant

THE LUXURY CONSUMER’S MINDSET: Purchase Channels


As seen in the previous section, online luxury retailing is growing in popularity and looks set to continue to do so in the coming years. Social media platforms such as Instagram or WeChat are becoming more important for luxury brands looking to drive brand awareness and sales. Half of our sample for this survey say that they have liked or recommended a brand to family/friends/colleagues within the past three months, 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 three-month period. While this figure is highest among 18-39s as expected (25%), that 14% of over-40s do so 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.