• High quality (47%) and fashionable (32%) are the features most associated with the top well-known luxury brands
• The lack of a “luxury” experience represents the main barrier to e-commerce, in fact on-line sales represent only 16% of total sales
• Off-line shopping outperforms e-commerce, but 40% of traditional sales are strongly impacted by digital touch points and content
• Top 6 touch points with highest impact on brand awareness and intention to buy are boutique experience (61,3%), boutique windows (60,8%), official brand websites (54,7%), face to face opinions of friends/family (52,1%), search engines (45,8%) and on-line fashion publications (43,5%)
September 10th, 2015 – LuxHub, the strategic consulting practice of Havas, reveals its first global observatory on The Luxury Customer Journey that examines the path to purchase for luxury fashion goods. The proprietary study, conducted in 8 markets with over 6,400 consumers and 25 brands, gives luxury fashion companies a clear understanding of the strategic roadmap they need to develop to engage their target in each market, with a strong focus on their digital transformation.
The Luxury Customer Journey (LCJ) provides an initial snapshot of the most important marketing KPI’s (top of mind, spontaneous and total awareness) before delving deeper into the more relevant content and touch points that build brand awareness and intention to buy, from traditional press and celebrity endorsement to digital word of mouth and bloggers. The study explores customer behaviour and their expectations during their e-commerce and boutique experiences, in-store mobile usage, interaction with brands’ social media pages, as well as the meaningfulness of specific content provided by the brands. It also tests consumer appreciation of the newest experience innovations.
The study confirms people aspire to luxury fashion brands because they provide the thrill associated with the sense of belonging to a selected tribe while providing the unique opportunity to show off personal connoisseurship. However, in the more mature markets during the recent economic slowdown, customers have become increasingly price and quality conscious. They are willing to pay more if they are provided with better, customized, meaningful experiences and services while they approach, select and purchase a luxury product. Even customers in emerging markets are increasingly gaining ground, moving quickly up the Luxury Pyramid, from affordable and accessible logoed products to niche and exclusive goods.
In this evolving landscape, The Luxury Customer Journey aims to unveil and highlight the most significant differences in the behaviour and expectations of the modern luxury consumer in the key European markets, the US, Middle East and China.
Some key takeouts from the Global results:
The features most associated with the top well-known luxury fashion brands are: high quality (47%), followed by fashion as in being considered ‘fashionable’ (32%), while only 26% of the 6.400 interviewees perceived them as recognizable.
The number one reason people buy a luxury good is self-reward (51%), followed by a special sales/convenience price (48%), proving that there is a strong rational approach towards purchase today that threatens many luxury brands’ founding conviction in emotional added value. As regards reasons to buy, China and the Middle East stand out for: purchasing abroad; new collection launches (underlining their passion for the “new”); and religious or national holidays emerging as important.
The study confirms that despite the boom of on-line sales, e-commerce is still not widespread for luxury fashion brands (16%), even if it’s perceived as more comfortable and convenient. The physical point of sale is still the most reassuring channel, confirming that touching and seeing a product is still an essential part of the shopping experience. The luxury experience itself represents the main barrier to e-commerce as on-line boutiques are not always able to meet customer expectations. However, even if off-line shopping still outperforms e-commerce, over 40% of traditional sales are strongly impacted by digital content, online advertising and web editorial.
The majority declare they know exactly what they want before entering a boutique to purchase a fashion luxury good. This is particularly evident in the Middle East (64%) and China (78%) where customers are very clear about what they want to buy, collecting product and brand information prior to visiting the point of sale for the purchase.
The path to purchase is almost never linear, involving interaction with different content and communication assets from owned (i.e. official websites), to paid (i.e. print advertising) and/or earned equity (i.e. word of mouth). The research shows that Millennials and the Middle East and Chinese markets have the most holistic approach to the customer journey, quickly accessing a huge amount of cross platform content. Brand storytelling is extremely important for Chinese consumers while Millennials pose a harder challenge for mature markets where brand heritage and roots have yet to become relevant for them.
The Luxury Customer Journey defines the top 6 touch-points with the highest impact on brand awareness and intention to buy: boutique experience (61,3%), boutique windows (60,8%), official brand websites (54,7%), face to face opinions of friends/family (52,1%), search engines (45,8%) and on-line fashion publications (43,5%). The weight of each touch point changes in each market and with regards to specific target audiences. For example, social media and, in particular, social CRM activities are more significant in the Middle East and China.
Smartphones are increasingly used in the physical point of sale to complete a purchase. In the US, 40% of the panel interviewed uses their mobile to compare prices, 40% of the Chinese to buy the product at a cheaper price on-line; while Europeans remain the most reticent, with 28,3% claiming they don’t use their phones at all while shopping.
All Global luxury consumers are interested in content that provides them with practical and personal advice on new trends and seasonal must-have products related to their age, profile, and taste. Customized services and special treatment are also expected as well as exclusive offers following a subscription to a brand web site and/or loyalty program.
Isabelle Harvie-Watt, Global CEO Havas LuxHub, says: “Brands, particularly the traditional luxury fashion brands, need to shift their focus to their customers and on how to engage them. They need to know their data; they need to understand their customer; they need to be global yet increasingly local and personalized in their approach; they need to become much more digital but at the same time experiential. The Luxury Consumer Journey analyses customer behaviour and expectations in depth in 8 strategic markets in the world. It is an incredible tool and should be the base for the definition of any strategic marketing plan today.”
The Luxury Customer Journey is based on a quantitative on-line survey that involved 6.400 interviews to affluent consumers across 8 markets including the US, China, UK, Spain, France, Italy, Germany and Middle East (Saudi Arabia and United Arab Emirates).
800 interviews (CAWI) were conducted in each market to people aged 25-65 y.o., who had purchased one of the selected brands* over the last 3 years (fragrances, beauty and eyewear excluded).
50% of the sample was recruited adding an income filter (> $100,000 for US, > ¥100,000 for China, > £100,000 for UK, > €60.000 for Spain, > €80.000 for France, Germany and Italy), with the exception of the Middle East.