Luxury Institute News

May 16, 2013

U.S. 2 Percenters Trade Down With Post-Recession Angst

Posted in Appliances/Bath Fixtures,Fashion,Luxury Brands,Real Estate,Retail
Tags: Armani, Coach, Gucci, Milton Pedraza, Prada, Ralph Lauren —

By Cotten Timberlake
Bloomberg
May 15, 2013

Jennifer Prentice, a medical-equipment saleswoman in Minneapolis, once had no qualms about dropping $600 or more for Gucci purses. Now she spends $300 for Coach Inc. bags and is filling in her Burberry wardrobe with pieces from j.-crew.

“The things we went through over the last couple of years definitely have an impact on what I am doing,” Prentice, 45, said in an interview. “I tend to be less frivolous now.”

While good times keep rolling for the super-wealthy, many Americans at the bottom end of the privileged group with incomes of $250,000 or more are thinking twice. These “two-percenters,” unnerved by the most recent recession, are trading down to less-expensive offerings from Coach Inc. and Ralph Lauren Corp. (RL) rather than pricier goods from Prada SpA (1913) and Giorgio Armani SpA. Even with the stock and real estate markets rebounding, they’re not draining their wealth again, and the shift may prove challenging for the highest-priced brands that can no longer lean on credit card-fueled aspirational customers.

“The rich have lost their exuberance,” said Pam Danziger, president of Unity Marketing, a luxury research firm. “They do not feel as wealthy. They increasingly feel that their wealth is threatened, real or not.”

An increasing share of America’s “ultra-affluent” consumers view themselves as middle-class and are spending like “Henrys,” which stands for High Earner Not Rich Yet, Danziger said. People in the latter category earn $100,000 to $249,999 a year, putting them in the top 20 percent by income, Danziger said.

Spending Falls

Ultra-affluents’ spending on personal and household luxuries as well as experiences such as travel but excluding autos, fell 19 percent last year to $96,568, the lowest in five years, Unity Marketing says. Spending on personal luxuries slid 26 percent, the biggest drop of any of the categories, to $32,283. The ultra-affluents’ spending peaked at $167,919 in 2010, driven by pent-up demand after the recession. Henrys’ spending retreated 8 percent to $34,958 last year.

Luxury spending in the Americas grew 5 percent on a constant-currency basis in 2012, slower than the 13 percent gain the previous year, Bain & Co. estimates. The Americas accounted for 31 percent of the 212 billion-euro ($274 billion) market, the consulting firm says.

Apparel and accessories brands on the way down with affluent consumers include Prada, Armani, PPR (PP) SA’s Gucci, Dolce & Gabbana Srl, Hermes International (RMS) SCA and Gianni Versace SpA, Danziger said.

Names on the way up are Coach, Ralph Lauren, Michael Kors Holdings (KORS) Ltd., Gap Inc.’s Banana Republic, J. Crew Group Inc. and Urban Outfitters Inc. (URBN)’s Anthropologie, she said.

The turning tide is discernible in companies’ recent sales.

Slowing Growth

Gucci-owner PPR’s comparable luxury sales growth slowed to 8 percent in North America in the first quarter from 20 percent a year earlier. LVMH Moet Hennessy Louis Vuitton SA (MC)’s growth excluding acquisitions and foreign-currency fluctuations shrank to 7 percent in the U.S. excluding Hawaii in the first quarter from 16 percent a year earlier. In contrast, Michael Kors in its most recent quarter posted a 41 percent comparable-store sales increase in North America, faster than the 38 percent gain a year earlier.

“The premium brands have really upped their game, competing more fiercely with the luxury brands,” said Danziger, whose consulting firm is based in Stevens, Pennsylvania.

Michael Kors shares jumped 20 percent this year through yesterday and Coach advanced 6.5 percent. LVMH dropped 2.2 percent. PPR is up 23 percent, benefiting from divestitures of non-luxury retail units. Kors rose 1.4 percent to $62.18 at 9:35 a.m. in New York while Coach climbed 0.5 percent to $59.40. LVMH added 0.3 percent to 136.20 euros and PPR slid 1.9 percent to 170.10 euros in Paris.

Strategic Buying

Affluent shoppers are being strategic, buying a few particular items from the luxury brands that give them the most pleasure and making trade-offs on the rest, Danziger said.

While mixing high- and low-priced fashions has been a trend for years, “it’s even more pronounced now,” said Milton Pedraza, chief executive officer of the Luxury Institute, a research firm in New York. Consumers are buying “high-quality yet low-cost products” so they can “splurge on the superb luxury product.

‘‘They are discerning to a fault these days,’’ he said.

Among these consumers is Jose Bandujo, the owner of an eponymous New York advertising agency, who estimates his spending on personal luxuries has declined as much as 20 percent because he’s investing in a home renovation.

‘‘I have to have a practical need,’’ said Bandujo, 49. ‘‘There are things still in my closet with labels that I never wore, and I find that appalling now.’’

Real Estate

The rich are channeling some of the money they’re saving into homes amid the perceived recovery of the housing markets, said Hana Ben-Shabat, a New York-based partner in the retail practice of the A.T. Kearney Inc. consulting firm.

‘‘Many affluent people are converting their money into real estate and things that have long-term investment returns and are spending less on having the latest Hermes handbag,’’ she said. ‘‘When they do have to buy a handbag, they go buy Coach.’’

She has one caveat: A small cadre of ultra high-net worth individuals, with $5 million and more in net assets, is insulated and not cutting back, she said.

Luxury consumers are shopping more for durability and quality rather than just the name on the label, said Jerome Jacques, a Malibu, California-based handbag designer.

‘‘A lot of people are tired of the vanity,’’ Jacques said. ‘‘They don’t want something that is bling-bling and gaudy. They want something really well-made, that doesn’t shine, and that has value.”

Functional Classics

Before the recession, Jacques produced seasonal collections of 20 designs that he distributed wholesale to now heavily saturated retailers like Macy’s Inc. (M)’s Bloomingdale’s. These days, he’s engineering a perpetual collection of 10 classic and functional bags under a new line called “Article Indefini” that he wants to sell directly to consumers. A luxury handbag should cost $400 to $800, he said. A $7,000 Hermes bag is “ridiculous,” he said.

Lori Hirsch, an attorney from Basking Ridge, New Jersey, in her 40s, said she is among consumers buying fewer goods — in her case one or two outfits a season versus five or six before the recession — partly by stretching out her purchases.

“The economy is not as bounced-back as people make it out to be,” Hirsch said. “I continue to make purchases on an as-needed basis without being extravagant.”

http://www.bloomberg.com/news/2013-05-15/u-s-2-percenters-trade-down-with-post-recession-angst.html

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Wealthy Shoppers Focus On Quality And Price As Brands Blur Lines Between Luxury And Mainstream

Posted in CRM,Customer Experience,Fashion,Luxury Brands,Luxury Market,Press Releases,Retail,WealthSurvey
Tags: Crossover, Luxury Brands, Mass Market, Milton Pedraza, Wealthy Consumer —

(NEW YORK) May 16, 2013 – What specific factors differentiate luxury brands from mainstream brands? What would happen if one type of brand expands into the other’s market? These are among the questions answered by wealthy shoppers with minimum household incomes of $150,000 surveyed by the Luxury Institute.

For 60% of wealthy consumers, particularly those with higher levels of wealth, quality is the overriding differentiator between luxury and mainstream goods and services. Price (55%) is cited as the second biggest point of differentiation. Craftsmanship (48%), prestige (47%) and design (38%) are also critical. Older wealthy shoppers are notably more selective (51% vs. 43%) on craftsmanship than their younger peers.

Launching an extension into mainstream retail does not appear to be the kiss of death for luxury brands because there is little brand prejudice on the part of wealthy shoppers. If a luxury name branches out into mass-market, 84% of wealthy women and 78% of men would continue shopping with that company. In the case of a mainstream brand migrating up-market, 88% of wealthy women and 79% of men would remain customers.

Of the challenges facing the mainstream offshoot of a luxury brand, 24% of wealthy shoppers say the biggest risk is damage to the luxury brand’s image or reputation; 17% cited perceptions of inferior quality at the lower-priced stores.

“Luxury brands can leverage their edge in quality and craftsmanship with current offerings by communicating these attributes clearly with consumers,” says Luxury Institute CEO Milton Pedraza. “This enhances perceived value and alleviates price sensitivity.”

About Luxury Institute (www.LuxuryInstitute.com)
The Luxury Institute is the objective and independent global voice of the high net-worth consumer. The Institute conducts extensive and actionable research with wealthy consumers about their behaviors and attitudes on customer experience best practices. In addition, we work closely with top-tier luxury brands to successfully transform their organizational cultures into more profitable customer-centric enterprises. Our Luxury CRM Culture consulting process leverages our fact-based research and enables luxury brands to dramatically Outbehave as well as Outperform their competition. The Luxury Institute also operates LuxuryBoard.com, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises.

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May 8, 2013

Neiman Marcus sale could build more customer-focused brand

Posted in Customer Culture,Customer Experience,Fashion,Finance,Luxury Brands,Retail
Tags: Amazon, Customer Experience, Michael Kors, Milton Pedraza, Neiman Marcus, Nordstrom, Private Equity, Randall Ray, Zappos —

By Danielle Abril
Dallas Business Journal
May 7, 2013

While private equity investors of Neiman Marcus Group Inc. consider their exit strategy, a luxury retail expert predicts a move that could result in an increased emphasis on customer relations.

Milton Pedraza, CEO of The Luxury Institute LLC, said he belives that the next logical step for Dallas-based Neiman Marcus is to go public. The move would allow Neiman Marcus the freedom to focus on building relationships with its consumers.

“Neiman will have a very solid structure if they go public,” Pedraza said. “It will be customer-centric rather than shareholder-centric.”

Bloomberg reported earlier this week that TPG Capital and Warburg Pincus LLC, Neiman Marcus’ private equity investors, were considering selling the company or taking it public. The firms held their investment for eight years, 60 percent longer than the norm, according to Bloomberg.

Neiman Marcus declined to comment.

Neiman Marcus could take four different directions, according to Randall Ray, partner with Munck Wilson Mandala LLP. Ray has spent almost 25 years dealing with corporate legal matters and said one thing is clear in this situation: TPG and Warburg will choose the path that ends with the highest profit for them in the least amount of time.

The four options, according to Ray, are: filing an initial public offering, selling to a private equity firm, selling to a strategic buyer and choosing a dividend recapitalization.

Pedraza said it was “less likely” that the firms would sell to another private equity firm.

“It would take a very special private equity firm to do the things Neiman Marcus needs,” he said. “You need patient money to rebuild the brand.”

Pedraza cites online retailers Amazon and Zappos as companies that have benefited from answering solely to the consumer. He also said that other retailers, such as Nordstrom and Michael Kors, have been successful in their transformations to becoming publicly owned.

Pedraza also said the recovering economic climate offers an opportunity for TPG and Warburg Pincus to sell to the general public.

“It’s a good time to go public,” he said, adding that a booming economy would offer the best conditions for the move. Whatever road Neiman Marcus chooses, there will be few clues as to its direction until the transaction is complete.

“Unless Neiman Marcus feels compelled to make this information public, there won’t be a lot of transparency in the process,” Pedraza said.

http://www.bizjournals.com/dallas/news/2013/05/07/sale-of-neiman-marcus-could-impact.html

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May 4, 2013

75pc of affluent consumers would buy luxury brand’s mainstream extension: Luxury Institute

Posted in Luxury Brands,Luxury Market,Marketing,Retail
Tags: Affluent Consumer, Luxury Brands, Mainstream, Milton Pedraza, U.S Retail —

By Tricia Carr
Luxury Daily
May 3, 2013

Most affluent consumers will continue to purchase from a luxury brand that offers a mainstream line, according to a new report from the Luxury Institute.

The quarterly Wealth Report polled wealthy consumers on their perception of luxury and mainstream brands and 24 percent of respondents said that damage to a luxury brand’s image or reputation is a risk when entering the mass market. The report also uncovered shopping habits of wealthy consumers such as the likelihood of making a purchase in-store and online is about equal among respondents.

“One thing for sure is that consumers, regardless of what price point they’re paying, expect great quality from luxury brands,” said Milton Pedraza, CEO of the Luxury Institute, New York.

“Millennials expect great quality and boomers expect great quality, regardless if they are buying a luxury brand or mainstream brand,” he said.

Luxury Institute surveyed wealthy consumers with annual household income of at least $150,000 for the Quarter 2 Wealth Report.

Going mainstream
The Wealth Report found that wealthy consumers are open to mainstream brand extensions from luxury marketers.

Eighty percent of respondents said they would buy goods or services from a mainstream offshoot of a luxury brand and 75 percent said they would buy a luxury brand’s mainstream line.

Eighty-four percent of women and 78 percent of men would continue to purchase from a luxury brand that has a mainstream extension.

Meanwhile, 88 percent of female respondents and 79 percent of male respondents would continue to buy from a mainstream brand that offered an up-market line.

If a luxury brand were to launch a mainstream line, 28 percent of respondents reported being skeptical about consumer acceptance.

Also, 24 percent of respondents believe that damage to the luxury brand’s image or reputation is a risk and 20 percent said quality concerns.

Mainstream lines are doable for luxury marketers because consumers will accept them, but the level of quality and brand DNA should still be in the products.

“You do need to differentiate your brand offerings with quality, with design, with craftsmanship and with pricing,” Mr. Pedraza said.

When asked what differentiates luxury from mainstream, 60 percent of respondents said quality. Among this portion are many respondents on the higher end of wealth and income.

Fifty-five percent said that price is a differentiator between luxury and mainstream. Many who chose price earn less than $200,000 per year and have a net worth less than $1 million.

Additionally, 48 percent said craftsmanship is a differentiator between luxury and mainstream, 47 percent said prestige and 38 percent said design.

Craftsmanship was chosen more often by older respondents.

“The standards have gotten so high,” Mr. Pedraza said. “They expect quality in both, but the quality of a luxury brand has to be dramatically higher than mainstream.”

Shop till they drop
The Wealth Report also found that new technologies drive store traffic instead of keeping consumers away from bricks-and-mortar.

Seventy-eight percent of respondents said that they made a purchase in-store in the past year and 77 percent made a purchase online.

Fifty-seven percent of respondents made purchase decisions based on information they gathered while shopping, but 58 percent gathered their information online via desktop.

But ultimately digital could be considered the most effective channel to trigger purchases since 69 percent of respondents made a purchase on the Web based on information they found online.

Luckily, far less respondents, or 25 percent, participate in showrooming – buying online after gathering information in-store.

“As a retailer, it should be about a seamless relationship with your customer,” Mr. Pedraza said. “Stop looking at it as channels, but relationship-building between the channels that you use and they use.

“Consumers will become seamless in how they engage brands across channels and the word ‘channel’ will become a useless term,” he said.

http://www.luxurydaily.com/75pc-of-affluent-consumers-would-buy-luxury-brands-mainstream-extension-luxury-institute/

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April 29, 2013

Now made in China: Taste

Posted in Automobiles,China,Fashion,Luxury Brands,Luxury Leaders,Luxury Market,Marketing,Politics,Wealthy Consumer
Tags: Audi, Bottega Veneta, Hermès, Louis Vuitton, Milton Pedraza, smartphones —

5 Things Big in Beijing, Headed for Buffalo

By Quentin Fottrell
SmartMoney
April 28, 2013

Despite the ubiquitous “Made in China” label on everything from clothing to toys, China has been slow to export its own products and culture. Most Americans couldn’t name a single Chinese brand, a survey released this month found. Only 6% of could think of one, according to international marketing firm HD Trade Services. Some respondents mistakenly identified Japanese brands like Honda, Sony and Toyota as Chinese. Indeed, Chinese companies often sells products under non-Chinese names. Volvo Car, for instance, is owned by China’s Zhejiang Geely Holding Group.

“Branding was an alien concept in old China,” says Stanley Kwong, managing director of China Business Programs at the School of Management of University of San Francisco. “China had been making products for companies like Wal-Mart and Apple, but has not developed many brands.” It’s been easier for China to make a product than build a brand, experts say. Popular Chinese cosmetic brand Herborist is labeled “Made in Shanghai,” for instance, and the box for Apple’s iPhone — although made in China — is labeled “Designed by Apple in California.”

Click the link to read the entire article which includes several quotes from Milton Pedraza, CEO of Luxury Institute: http://www.marketwatch.com/story/how-chinese-tastes-are-reshaping-american-malls-2013-04-26

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April 15, 2013

Versace, Roberto Cavalli outlets to heighten South Florida as a luxury shopping destination

Posted in Luxury Brands,Outlet
Tags: Florida, Luxury Market, Milton Pedraza, Roberto Cavalli, Versace —

By Miriam Valverde
Sun Sentinel
April 14, 2013

They are two of the most sought-after designer brands, and Sawgrass Mills now has them.

Versace and Roberto Cavalli outlet stores are slated to open this summer rounding out a roster of new high-end retailers as the Sunrise mall continues the ongoing expansion of its luxury outlet wing.

The coming of Versace, however, is particularly an exclusive grab for Sawgrass: it will be the only outlet in Florida, the mall said. It will also be one of a handful nationwide.

“They are very meticulous. They have to make a good call,” said Milton Pedraza, chief executive of the Luxury Institute, a New York-based research and consulting firm. “They don’t plant flags and open doors in every city.”

Click the link to read the entire article which includes another quote from Milton Pedraza, CEO of Luxury Institute: http://www.sun-sentinel.com/business/fl-versace-florida-20130414,0,4862364.story

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April 12, 2013

Bentley’s showrooms, Flying Spur propelled Q1 units sold 25pc

Posted in Automobiles,Luxury Brands
Tags: American Express Publishing, Bentley, Departures, Flying Spur, Milton Pedraza —

By Erin Shea
Luxury Daily
April 12, 2013

British automaker Bentley Motors reported a 25 percent increase in units sold during the first quarter of 2013 due to the release of the Flying Spur and eight new dealerships.

The automaker announced that global deliveries to customers in the first quarter of 2013 increased by 25 percent to a total of 2,212 vehicles, compared to 2012’s first quarter sale of 1,759 vehicles. Bentley’s unique position in the luxury auto market could also explain why its sales increased.

“As high-end as they are, these Bentley vehicles are understated and they are for everyday use,” said Milton Pedraza, CEO of the Luxury Institute, New York. “I do think that putting out new vehicles has been fabulous [for Bentley], but it is because the cars are everyday cars.”

“They are not showy,” he said. “They are high-performance cars that can be used everyday.”

Mr. Pedraza is not affiliated with Bentley, but agreed to comment as an industry expert.

Bentley did not respond by press deadline.

Securing a position
In addition to selling more vehicles, Bentley introduced a new vehicle to its lineup and opened new dealerships in the first quarter.

The automaker did a three-city tour for the launch of the Flying Spur in the United States.

Bentley partnered with American Express Publishing’s Departures magazine to host a series of three “One Night Only” events in the U.S., the first of which took place March 26 in New York. Other cities include Miami and Los Angeles.

Furthermore, the automaker’s sales were likely increased by the price range of vehicles that put it in an ideal spot in the luxury auto market.

“Bentley brought down the price [of a vehicle] from ridiculous to high value,” Mr. Pedraza said. “That combination of eye candy, high performance and everyday use makes them successful.”

“They are smart cars,” he said. “They are sensible, but also extremely addictive and that is a wonderful combination.”

Staying strong
Many luxury automakers experienced an increase in profits last year.

Automakers such as BMW, Mercedes-Benz, Audi, Lexus, Porsche, Bentley Motors and Rolls-Royce Motor Cars reported above-average sales for 2012.

This was partly due to marketing campaigns as well as an attractive buying economy for affluent consumers, experts said.

Also, these sales records likely resulted from strong branding efforts and signal an increase in competition for attention.

In addition to its growth in sales, Bentley noted that the U.S. remains its largest market.

During the first quarter, 632 Bentley vehicles were delivered to customers in North and South America, more than any other region.

Since the bounce back of the U.S. economy, affluent consumers are now ready to confidently spend again. This attitude helps high-end automakers such as Bentley.

“The U.S. economy is so resilient that it continues to be the best market for luxury goods and services,” Mr. Pedraza said.

“We have such a large critical mass of wealthy people,” he said. “We have more multi-billionaires than anywhere in the world and they are confident.”

http://www.luxurydaily.com/bentley%E2%80%99s-new-vehicle-showrooms-boost-sales-25pc-in-q1/

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March 25, 2013

Forget Tupperware parties. Local trunk shows offer exclusive access.

Posted in Fashion,Luxury Brands,Marketing,Wealthy Consumer,Women
Tags: Milton Pedraza, Trunk Shows, Washington —

By Abha Bhattarai
Washington Post
March 22, 2013

Forget the mall. Your next clothing purchase could take place in a local hotel, hair salon or art gallery.

Washington area businesses such as the Four Seasons and the Northern Virginia Art Center have played host to designer trunk shows in recent months, as businesses look for new and unconventional ways to bring in money.

For clothing and accessories companies, the short-lived events provide an easy way to rack up sales without investing in store fronts or pop-up locations.

Click the link to read the entire article which includes several quotes from Milton Pedraza, CEO of Luxury Institute:
http://www.washingtonpost.com/business/capitalbusiness/forget-tupperware-parties-local-trunk-shows-offer-exclusive-access/2013/03/22/20a54950-8ff5-11e2-bdea-e32ad90da239_story.html

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March 14, 2013

63pc of affluent consumers want to opt out of online tracking: Luxury Institute

Posted in Luxury Brands,Marketing,WealthSurvey,Wealthy Consumer
Tags: Do Not Track Act, Milton Pedraza, Privacy, relationship building —

By Erin Shea
Luxury Daily
March 13, 2013

Sixty-three percent of affluent consumers would choose to keep their online history and Internet activities private through an opt-out tracking policy, according to a new survey from the Luxury Institute.

Affluent consumers do not want their personal information used for other purposes and many consumers do not trust the safety of their information when giving it to a brand. This means that luxury marketers need to earn the trust of their consumers before asking for their participation in online tracking.

“We underestimate the fact that consumers are concerned about their privacy,” said Milton Pedraza, CEO of the Luxury Institute, New York.

“Unfortunately, if brands do not earn consumer’s trust and use their data in a trustworthy way, then consumers will opt out if there is privacy legislation passed,” he said.

“Brands then have to shift to earn the trust of consumers.”

The Luxury Institute’s Luxury Brand WealthSurvey surveyed 1,232 U.S. consumers in December 2012 about sharing their contact details in-store and online as well as their tracking preferences.

Respondents were at least 21 years of age and had a minimum annual income of $150,000.

Respecting the consumer

Although 68 percent of affluent shoppers are willing to give personal information to online retailers, 75 percent say this is because of purchase requirements to complete an online transaction, per the Luxury Brand WealthSurvey.

Women feel more pressured in-store to provide personal information during the checkout process. But only 24 percent shared their personal information during a recent in-store transaction.

Also, 66 percent of consumers feel comfortable sharing email in-store, compared to 78 percent feeling comfortable sharing it online.

Once consumers provide their information to a company, 60 percent feel little to no control over it, while 30 percent think that the security of their information is extremely likely to be compromised.

Luxury marketers need to make sure they are being transparent on their intentions when gathering consumers’ information and need to earn their trust before asking for personal data.

“Brands cannot take data collection for granted,” Mr. Pedraza said. “You need to earn that right to get that data and then use it in a trustworthy manner.”

Do not track

Recent U.S. legislation proves that consumers are seeking more control over their contact information and online activities.

If passed, the Do Not Track Act will let consumers stop companies from gathering their personal information online, but experts agree that there is most cause for concern among mainstream brands rather than those in the luxury sector.

Sen. John D. Rockerfeller IV (D-WV) introduced the “Do-Not-Track Online Act of 2013” in the United States Senate Feb. 28 to help consumers keep their online habits private, which is a reintroduction of a 2011 bill.

The legislation will limit the availability of information that marketers use to place digital and mobile ads.

Many affluent consumers would opt-out of online tracking if this legislation passed, according to Luxury Institute’s survey.

Eighty-two percent of affluent customers have already placed their phone numbers on do-not-call lists and the majority reported that they would do the same if there was a similar online option for blocking their Internet activities.

However, luxury marketers can overcome this negative mindset on information sharing by establishing relationships with customers, since 46 percent of respondents said that knowing a specific sales associate makes them more likely to give out contact information while shopping in-store.

“The way to do this is to have sales associates contact the customers directly,” Mr. Pedraza said. “Establish the communication with real humans and that will customize the experience.

“Relationship building is paramount when privacy is a concern,” he said.

http://www.luxurydaily.com/63pc-of-affluent-consumers-want-to-opt-out-of-online-tracking-luxury-institute/

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March 11, 2013

Wealthy Shoppers Careful About Surrendering Personal Data; Awareness of dangers drives caution

Posted in Internet/Web,Luxury Brands,Retail,WealthSurvey
Tags: do-not-call, Luxury Market, Milton Pedraza, Personal Data, Privacy, Wealthy Consumers —

(NEW YORK) March 11, 2013 – The independent and objective New York-based Luxury Institute surveyed U.S. consumers with minimum household income of $150,000 about their attitudes on privacy and their experiences with companies collecting and handling their personal data.

The majority of wealthy shoppers (68%) are inclined to divulge personal data to merchants online, although 75% report this is due to requirements for completing their transaction. Only 24% indicate sharing their contact information during a recent in-store experience, with women feeling more pressure by brands to provide personal details during purchasing experiences. Email is the type of personal data consumers feel most comfortable sharing both in-store (66%) and online (78%). In addition, 46% of customers say that knowing an individual salesperson makes them more likely to divulge contact details while shopping in-store.

Wealthy customers show a penchant for being left alone: 82% have placed their phone numbers on do-not-call lists, and 63% say they would do the same if there were a similar online registry for blocking the tracking of their Web activities. Half of consumers have already fully disabled or edited tracking on their browsers.

Almost 60% of wealthy shoppers feel little or no control over their personal data once a company has it, and 30% say that the security of their data is extremely likely to be compromised.

“Luxury firms must optimize respecting privacy while earning trust in order to collect valuable customer data and use it to create value for customers,” says Luxury Institute CEO Milton Pedraza. “Should privacy legislation be enacted, the brands that will be superbly successful will be those that have built genuine, trusted, long-term human relationships with their customers.”

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