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I'm RICH! $$$$ Take my money! [Marketing to the Affluent]

AllenCrawley

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Seven New Faces of the Global Luxury Consumer [according to Bain & Company]

  1. The Omnivore (25% of spending, at an average €2,350 per year): These shoppers are typically new entrants to luxury. On average, they are younger than the other clusters and have a high willingness to experiment with products and brands. They are primarily women. They tend to purchase high-ticket items, focusing on the jewelry and watch categories. They prefer to shop in brands’ own stores. Many of their purchases are made while traveling. They prefer aspirational brands, and while they have high advocacy for luxury brands, their loyalty level is relatively low. These attitudes are common among Chinese consumers from Tier-2 and Tier-3 cities.
  2. The Opinionated (20% of spending, at an average €1,750 per year): These are highly educated Generation X and Y shoppers. They favor leather goods and watches, and are highly aware of the differences between brands. They shop often within their hometowns, and are influenced by online information and social networks. They dominate China’s Tier-1 cities and are also prevalent in Western Europe and the United States.
  3. The Investor (13% of spending, at an average €1,450 per year): These shoppers pay the greatest attention to the quality and durability of luxury materials. They favor long-lasting leather goods and watches that can be handed down from generation to generation. They carefully evaluate luxury purchases with research and referrals from other consumers. The segment is skewed to shoppers from Japan, the Middle East and mature markets where discretionary spending is more cautiously allocated.
  4. The Hedonist (12% of spending, at an average €1,100 per year): These shoppers are infatuated with luxury goods and the luxury shopping experience. They have a high affinity for brand logos and much of their purchasing is within accessories categories. They are most influenced by advertising. Despite their interest in luxury for show, they exhibit the lowest levels of advocacy for brands, often due to cognitive dissonance sometimes following a purchase. This is the only cluster represented across all nationalities and generations.
  5. The Conservative (16% of spending, at an average €1,000 per year): These are mature and mainstream shoppers, both men and women. They favor watches and jewelry from big-name brands. They shop in multi-brand stores, and are influenced primarily by what friends and family recommend. They are mainly in mature markets, but also in China.
  6. The Disillusioned (9% of spending, at an average €800 per year): These are mostly baby boomer shoppers who suffer from “luxury fatigue.” They purchase leather goods and beauty products. They look for products that last more than one season, but are unswayed by brand messaging or advertising. They tend to shop infrequently and shop online when they can. The segment is dominated by women. They are found in the United States, Europe and Japan.
  7. The Wannabe (5% of spending, at an average €500 per year): These predominantly female shoppers look for entry-level items in beauty and shoes, valuing affordability, and are highly likely to mix and match outside of the luxury spectrum. They are impulse shoppers who demonstrate little brand loyalty, primarily influenced by what their friends say and what they see in fashion publications. They come from the global middle class, especially in the United States, Western Europe and new consumers in Eastern Europe.
Source: Luxury Goods Worldwide Market Study Winter 2014
 
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Young-Gun

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Great thread idea. Will check out the books, just added to my Amazon list. Do you have a recommendation for the single, best of those, for the purpose of interesting examples, case studies, techniques in selling to the wealthy and ultra-wealthy?

You know what basically all wealthy people are extremely NON-FRUGAL and emotional spenders on...

Their offspring.
 

AllenCrawley

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@Young-Gun I would say pick up Dan Kennedy's book on marketing to the affluent. I read your intro post. Care to share some of your experiences selling to the rich?
 

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You know what basically all wealthy people are extremely NON-FRUGAL and emotional spenders on...
Their offspring.
I disagree, at least on the NON-FRUGAL part, for many with 1-Gen wealth. Many wealthy people got their wealth through frugality, and the next generation is usually taught that as well. By the third Gen, the lesson is gone - which is also why [ordinary] wealth often doesn't last past the 3rd Gen.

For an excellent look at this particular topic, I highly recommend "The Millionaire Next Door".
 
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Young-Gun

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@Young-Gun I would say pick up Dan Kennedy's book on marketing to the affluent. I read your intro post. Care to share some of your experiences selling to the rich?

Thanks AC it's now in my Amazon cart.

Been working for most of the week and then finally a bit of time off to decompress! I'm not one of those that can go like forever without a break, so since it's been about 8 months since I got any real time off I'm glad to have Spring Break. The last couple days have gone day on the motorcycle and walking around my neighborhood in the sun. Not getting anything done just living and listening to music :)

It's true that there are different "sorts" of wealthy people - all types - let's take a few that I've randomly imagined and do some thought experiments.

1) The self-made anglo entrepreneur father, and his stay-at-home wife and 2.5 kids.
2) The inherited wealthy, 2 families married each other, both second-generation partners started wealthy and only getting wealthier off investments, family business etc - the trust-funders who have never known life another way
3) The "get rich quick," someone who's jumped lifestyle in a short period, often by luck (lottery winner, lawsuit winner, or even a smart, hardworking person - e.g. some goofy, naive software engineer with a hit game that goes from 50k to 15 mil)
4) Immigrant family that has just worked hard. Not hit the motherlode but, well-off for sure.

How do they spend? Just a few thoughts on each:

1) The self-made man probably wants the best for his family, often one of the most basic motivations for building a business. Most often a fairly mature human being, so safe, reliable cars to keep everyone safe, although he may have a sports car for the weekend. Demands great educations for his kids and probably considers them a bit "better" than the neighbor's kids, has a touch of arrogance about them. Needs nice vacations from the stress of work. He wants his kids to excel in their abilities and accomplishments, like he did. But he also wants to see them struggle a bit less than he did. Probably has a couple expensive passions, collections or hobbies - cars, rare wines, owning land, or something. Else, why would he have kept going to build a highly successful business, rather than just a decent business. Or, he may have true passions that earn very little money and thus he has "surpressed" them in his deep focus on business and profit - but bring them out and he'll be like a kid in a candy shop, and willing to spend.
To sell him, 3 easy options:
1) "practical, safe, reliable, smartest choice for the family"
2) "safety and protection of his family"
3) "find his secret boyhood/youth-reminding passions and make luxury versions of them"


2) The young inherited wealthy, never seen life another way - they're used to being part of the elite. They also have a good shot at having a lot of great financial habits that will keep them in the top 10% or 1% for the rest of their lives. The wealth had to come from somewhere, and for it to last even one generation, someone in the family must know what's going on. They probably mostly want to remain in the elite (might have a "bohemian" rebellion phase when younger but ultimately, most will come around and want to enjoy the family wealth). Education a fairly high priority, but not as high - because no one in the family expects their place to slip, "book learning" not as crucial, except as a signifier of elite status and as a door-opener to things like elected office, most prestigious firms etc.
To sell them, you need to be in front of them first:
1) Market where other luxury purchases are made
2) Have the audacity to charge a lot - they like and respect high-ticket prices
3) Make your product the "elite best" and then charge a huge markup since your raw materials, human resource, and other expenses will be luxury-high
4) Image and elitism sell these type, the 2nd-generation inherited wealthy
5) Prepare to occasionally deal with some pretty obnoxious and entitled folks - you need great customer service
6) Oh yeah, they like being around "other elite" - they like it QUITE A BIT - so try to incorporate some schmoozing between your customers


3) Haven't worked with a ton of get-rich-quick types, and I'm having trouble imagining how they could all be grouped together. Not sure they really could. I bet, though, you could dream up a product or service for "lotto winners" etc and then chase those big winners around - "wealth management for lotto winners" or something, lol. If they're really really made it big, I would expect that customized services and one-off solutions become a big deal... having the finest of the fine, since what else are they gonna spend all that money on... and, don't get locked into a long-term contract with them to make your money, because they might blow all that money on someone else before you know it.
To get those sales:
1) Hustle to find these people before all the money is blown on ice cream..
2) Custom, 1-off, "best of the best" solutions that they can brag about
3) Don't get locked in to long-term situation that will ruin you if they go bankrupt or change their mind on a whim


4) Immigrant, self-made family. Hardest to sell on luxury. Always questioning what they're getting for the money. The most canny, the most difficult customers, the least respectful of my time (probably because they're so freaking busy themselves). Sometimes, language barriers make things even tougher. I respect this type the most as people, but dislike them as customers, because they're difficult to satisfy no matter what you're charging. They want real value for every cent, not prestige, not elite status, not image - they just want value on their investments. Real return. Also frustrating - they rarely have provided me with referrals. Not to speculate too much, but maybe: hard to make connections as an American suburban immigrant family? Or, alternately, they're trying to keep the best value finds a secret for themselves? If you give great referral bonuses, though, they may start networking for you, if you increase the value proposition enough that they see the value of spreading your name around.
To sell them - first, ask yourself if you really want to... then:
1) Promise high value/return on investment
2) Need great customer service or they'll make you tear your hair out
3) To get more referrals from them - give a really good referral bonus, and make sure they know about it

I know there are billion issues people could take with this post, so simply take it as some potentially interesting reading, not fact. Just a few thoughts to get me warmed up this morning :)
 

Young-Gun

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I also wanted to follow up (hope this isn't double-post, it's a different concept than the last):

Welcome to the world of the "Veblen good"
Stuff we all want, but very few of us can afford:
http://en.wikipedia.org/wiki/Veblen_good

Like a Rolls-Royce. If a Rolls was basically the same idea but a cheaper, corner-cutting version, it would be something completely different.

A Veblen good, is a good that's "good" because it's expensive, exclusive, elite.

Jaguar.
Maserati.
Rolex.
First-Class.
5-star (not just supreme service... it's better than all the others... so a truly lavish person can know they're having the best. vacation. ever.)
Covered in gold and diamonds.
Heavy with pearls.
The mink coat.

Finest-Quality Veblen Product + Big Markup + Killer Marketing/Distribution + Elite Customer Service = Luxury Sales Business
 
R

redshep

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@AllenCrawley What are your thoughts on positioning a new bootstrapped product? Would it make sense to try to reach affluent customers (through fewer, exclusive channels) with a limited budget?
 
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TedM

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@AllenCrawley What are your thoughts on positioning a new bootstrapped product? Would it make sense to try to reach affluent customers (through fewer, exclusive channels) with a limited budget?
it's an interesting question....what kind of product and how limited a budget?

here's the challenge: how do you get 5 of your doodads into the right people's hands? build your "Bob" as someone once told me...and figure out what they read, where they vacation, etc...
 

TedM

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Skincare products, <5K
find a salon that caters to your clientele. befriend the owner/manager/someone...get them to recommend it... find a thought-leader in the space...see what other niche high end skincare items have done over the last few years...maybe there is some eyeliner that costs $2,000 that you can only get in 1 salon in paris.

what 3 magazines would you give your right arm to be in? who writes for them?
what is unique and fabulous about your creams and lotions that would make it ideal to feature?
where do people wear what you make?

what age people use or buy this?
what model should wear it?
 
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AllenCrawley

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What are your thoughts on positioning a new bootstrapped product? Would it make sense to try to reach affluent customers (through fewer, exclusive channels) with a limited budget?

I like what @TedM shared.

I'm bootstrapping my product as well. I am using Instagram and Pinterest to really build up a following within my market. I will also be getting my product in the hands of influencers as Ted described.

Find case studies of how companies bootstrap retail products. I was talking with @bensonj the other day and she shared with me a company called Black Milk and how they grew to a multi-million dollar company with a ZERO marketing budget. They may not be a luxury product marketing to the affluent but lots of lessons can be gleaned from their process.

Here's a link to their case study:

How to Build a Multi-Million Dollar eCommerce Business with 0 Marketing Budget

Their automated embedding of instagram photos by customers with their hashtag into their product pages is absolutely brilliant. Social proof mastery.



@Jill started and built a wildly successful luxury business by building a great reputation on a niche forum and also became great friends with the forum owner. That opened a lot of doors and allowed her to bootstrap her biz. Maybe she'll chime in on this particular topic.


...
 
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AllenCrawley

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Hair Chain Drybar Finds Niche in Affordable Luxury

Ms. Webb launched a line of hair-care products, including the store's signature yellow hair-dryer called Buttercup, which are sold online, at Drybar locations, on shopping channel QVC and at 140 Sephora stores.

excerpt...

WSJ: Drybar is very involved on Instagram and Twitter. How has that become part of the business?

Ms. Webb: I'm very particular about what we put out there. Even on Twitter, I personally respond to a lot of the tweets that we get. And I think that's impactful. I think I do that as much as I can because I know how it feels. You reach out to a company and you just expect that no one will ever get back to you.

http://online.wsj.com/news/articles/SB10001424052702304607104579209970308197960
 
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AllenCrawley

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57pc of affluent consumers look to shop during sales: report

The majority of affluent consumers employ a number of shopping and saving tactics to manage their money, with 52 percent of ultra-affluents regularly comparison shopping.

Luxury marketers often think that affluent consumers want to spend their money as fast as they earn it, but the affluent are actually invested in saving their money. These strategic spending habits call for a revised marketing plan that recognizes that consumers care more than previously thought about what they purchase.

“I think too many luxury marketers think that the affluent and wealthy really get a thrill about making expensive purchases,” said Pam Danziger, president of Unity Marketing, Stevens, PA. ”They don’t seem to realize that rich people get rich not by spending their money, but by being very careful with money.

“The old idea that ‘if you have to ask the price, then you can’t afford it’ has been replaced by the wealthy being focused on price and getting the most bang for their buck and sometimes that means asking for a discount, looking to find the lowest price or making strategic brand substitutes to save money,” she said.
lg.php



For Unity Marketing’s “Luxury Has a Brand New Style” report, 1,335 affluent luxury consumers within the top 20 percent of households by income were surveyed in January 2014 about how they manage their money, their attitudes toward luxury and their purchasing plans for different categories. Sixty percent of respondents were women, and 57 percent were between the ages of 45-70.

Spending savvy
Since the recession, affluent consumers have been saving more and spending less. Sixty-one percent of those surveyed save money from their paychecks, while 51 percent invest in a money market or mutual fund.

Financial institutions have the opportunity to market their services to high income individuals who are interested but may not be as aware of saving strategies.

The consumer segments most interested in money-saving strategies when shopping are females ages 35-54. Neither the youngest nor the oldest affluent consumers regularly deploy money saving strategies when shopping.

Across apparel and accessories, beauty and jewelry, ultra-affluent consumers, or those with a household income of $250,000 or more, have decreased their spending since 2011.

There has been a shift in the perception of status symbols, with men choosing brands not for their lofty price point but because the brand fits their identity. For instance, a man may choose a Mini Cooper over a Mercedes-Benz because it fits his personality.

Mini Cooper

“The #1 danger for heritage luxury brands, like Louis Vuitton, Mercedes, Gucci and the rest, is to think that their brand is too storied that they don’t have to worry about the competition coming from what they consider upstart brands, but what the luxury consumers sees as very compelling indeed,” Ms. Danziger said.

“I hear it all the time that such and such a brand ‘is not mycompetition.’ Nonsense,” she said. “Luxury consumers today have the widest possible range of brands to choose from and many, many times they find that a less exclusive brand offers superior value for the money.

“I’m not saying that the heritage luxury brands need to necessarily reduce price, but they better offer significant and quantitative value to the consumer. They can’t expect the customer to pay a premium just for the brand name anymore.”

Saving plan
To appeal to the newly cost-conscious affluent consumer, brands should focus on the value that an item imparts in relation to the price. This is different than discounts, and focuses on the quality and superiority of a good.

Another way to give value without succumbing to discounting is through rebates or cash back. This tactic is employed by American Express, which rewards its consumers for spending.

American Express offers

Buy one get one discounted offers are also appealing to an affluent audience, since they encourage spending more. However, these offers can go too far. If the deal is buy one get many free and the offer is almost consistently given, consumers will believe that the merchandise at retail is overpriced.

Traditional discounts can be offered, but they need to be used in moderation. Limited time only offers and flash sale sites are ways to clear out merchandise without damaging a brand’s reputation.

An outlet strategy also has to be carefully considered. For example, leather goods maker Coach rapidly expanded its outlet stores, which resulted in the majority of its sales being driven through off-price, which has hurt the brand’s luxury status and ability to price at a premium.

Coach outlet store

If the merchandise is not moving at full price, then the pricing strategy for a brand may need to be revisited, since consumers likely think it is overpriced.

Bridging the gap
The study pointed out men’s retailer Suitsupply, which currently operates 39 stores worldwide, as finding a way to meet consumers’ needs on various price points. The brand sells suits off the rack for about $500 and also has made-to-measure lines costing $2,000.

This price range allows men to begin shopping with Suitsupply and experiencing their customer service early and then grow with the brand into its higher end lines as they earn more money.

Consumers are doing more research before making purchases, carefully considering their spending.

The top 10 percent of affluent consumers have adopted a sense of invulnerability following the 2008 recession that has affected how they approach the purchase of luxury goods and services, according to a new survey conducted by YouGov.

Presented to attendees of the Luxury Summit in Naples, FL, April 8, the “2014 Survey of Affluence and Wealth” found that although luxury goods and services have seen sales growth, marketers have encountered troubles when targeting a more confident consumer. In the wake of the Great Recession, the affluent have become more secure and confident in their “shopping prowess” to ensure they remain at the top of economy (see story).

“I am not sure what luxury status means anymore or whether it means anything at all,” Ms. Danziger said. “I’ve heard in focus group research that labeling something ‘luxury’ just means over-priced.

“In this economic environment, where income inequality is evil and the 1 percent are villianized, the idea of conspicuous consumption is giving way to conscious consumption and part of that new conscious consumption equation is buying responsibly,” she said. “Not just goods and services that are responsibly produced, but that one can wear, enjoy and participate in responsibly.

“Maybe spending $5,000 on a handbag isn’t a responsible choice anymore when perfectly good quality and stylish handbags are available at $500. For the vast majority of consumers today $500 for a handbag is quite expensive. So even if one can afford a $5,000 handbag, that isn’t necessarily the responsible choice in today’s socio-political and economic environment.”




TL;DR





Source: http://www.luxurydaily.com/57pc-of-affluent-consumers-look-to-shop-during-sales-report/
 

brandonrush

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@AllenCrawley, you are providing us with so much value in your threads. This one, in particular, is one of my favorites. I just wanted to say thank you for the time and effort you put in to this forum. I'm sure I'm not the only one that benefits from threads like this. I picked up Dan Kennedy's Marketing to the Affluent in hopes to get a better grasp of the topics discussed here.
 

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Online Luxury Sales Are Growing Twice As Fast As The Overall Market

ONLINE LUXURY SALES BOOM:
Online luxury sales are growing twice as fast as the overall market, according to a new report from McKinsey. Last year, online shopping "directly generated more than 13% of offline luxury sales and influenced another 28% of sales." Consumers typically purchase big ticket items in-person, leading many luxury retailers to overlook e-commerce. However, it's increasingly clear that's a mistake — luxury shoppers are typically very digitally-connected, wielding smartphones and tablets while they shop. These consumers are likely conducting a great deal of research, too. Luxury retailers should therefore view their websites and apps as resources that can inform a consumer, provide information about products, and directions to the nearest stores. (McKinsey)

RETAILMENOT'S DEPENDENCE ON SEO: RetailMeNot relies heavily on search engine optimization to maintain its $1.8 billion empire shelling out coupon codes to shoppers. Recent filings with the SEC revealed that 63% of RetailMeNot's Web traffic originates from search results and 96% of its revenue comes from affiliate commissions on sales. The company leverages the fact that many consumers search for promo codes before making a purchase online. Therefore, RetailMeNot's strategy is to be the first result that bargain hunters find when searching for discount codes on search engines. For example, out of 263 coupon-related keywords — such as "Walmart Coupons" — RetailMeNot ranked first in 187 instances when using Google Search. However, this over-reliance on search engines is also a huge risk factor. Google is notorious for penalizing Websites that it feels manipulates search ranking algorithms. Rather than competing with RetailMeNot for search rankings, other coupon distributors could look to alternative methods for delivering promo codes to the masses that doesn't require the cooperation of search engines.

AMERICAN APPAREL'S INSTA-SUCCESS: With nearly 1 million people following its main Instagram account, American Apparel is showing how retailers can leverage social media. The retailer setup regional Instagram accounts that market to a specific region, such as New York City, the UK, and Japan. Each account features local American Apparel employees dressed in the retailer's clothing. "When employees are featured on our accounts, it causes a lot of excitement and allows them to become more creatively involved in the company. We also have discovered new employee models and photographers through our regional Instagram accounts," said American Apparel creative director Iris Alonzo. Instagram might not be effective for every retailer, but American Apparel's bold, colorful aesthetic seems to be a natural pairing for Instagram's retro-fitted images. (Business Insider)

WAL-MART GETTING SERIOUS ABOUT INDIA: Wal-Mart is opening 50 more wholesale outlets in India, which will bring its total to 70 in India. Wal-Mart doesn't operate any retail stores in India, but rather sells merchandise to small merchants via its wholesale posts. Many large U.S. retailers have found it difficult to penetrate the country's $500 billion retail market, which is dominated by small merchants selling to local consumers. eBay just led a $134 million investment in Snapdeal, an online marketplace that directly competes with eBay's own India site, and Amazon only launched an India site in June 2013. (Reuters)

GLOBAL PAYMENTS VIA MOBILE WILL GROW 40% IN 2014: Retailers should gear up for mobile payments, because it's fast-becoming a popular way for consumers to conduct purchases. Globally, payments transacted with mobile devices will rise 40% in 2014 to $507 billion, according to a forecast by Juniper Research.It's important to note that Juniper's number isn't just for "contactless payments" made with smartphones in physical stores. It also includes mobile commerce transactions — using your phone to make a purchase on the Amazon app, for example — which accounts for a much larger share of global mobile purchase volume. (Juniper)

French flash-sale retailer Vente-Privee has surpassed 1 million subscribers in the U.S. The company also doubled its U.S. revenue to $50 million last year, which represented roughly 2% of its global revenue. Vente-Privee began selling in the U.S. in 2011, but it has struggled to compete against Groupon and LivingSocial, both of which have their roots in the U.S. market. (Internet Retailer)

L'Oreal has acquired Chinese skincare brand Magic Holdings, despite pulling its own makeup brand Garnier out of the country. It's the latest sign that retailers are having difficulty competing against local brands in China.



Read more: http://www.businessinsider.com/onli...st-as-the-overall-market-2014-4#ixzz2zkjnGDfI
 
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Bigguns50

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@AllenCrawley Damn... This is one of my favorite threads !Thanks for the great information. Love keeping up on the marketing end.

Here in MI even though 10,000 millionaires moved out last year, we still have about 170,000...not terrible. And 11 billionaires on Forbes list.
 

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From my experience, most who were responsible for their own affluence understand the value of the dollar and what was required to obtain it. Coming from a VERY middle class upbringing, I am quite frugal in many ways. But I also enjoy my few luxuries. I could wax eloquent about my personal experience or I could give you examples of my customers for countless paragraphs. But at the end of the day, every story is different. Every reason for indulgence is motivated by something wholly unique to that individual, as a result of their unique experiences in life.

This is pertinent. I also came from an upper middle class family. We were very frugal. As a kid I thought we were poor because I would see others spend money without regard to value (e.g. buying something from a convenience store when they could almost as easily purchase it from the supermarket down the road). It was only later that this was keeping people from any sort of financial independence.

Ted mentions "The Millionaire Next Door". A fantastic book.

Marketing to the affluent can be a great opportunity. However assuming rich people are throwing money around like confetti is an idea we need to get out of our heads.
 

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Marketing to the affluent can be a great opportunity. However assuming rich people are throwing money around like confetti is an idea we need to get out of our heads.

MYTH:
All affluent people spend money willingly, sometimes carelessly, on anything and everything because they have the money to do so.

FACT:
Nearly all are extremely frugal about most things and amazingly un-frugal about a few things.
 
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Newspapers, tablets have highest media engagement levels among affluent: report
By Joe McCarthy


Although digital media is usurping more traditional forms, television, newspapers and out-of-home advertising still hold considerable sway, according to a report by the Shullman Research Center.

The “Reaching the Wealthy Consumer” report also looks into the engagement differences between consumers with a net-worth above $1 million and those below. Overall, the monthly pulse suggests that brands should continue to diversify their marketing strategy and continue to invest in traditional platforms.

“We keep hearing about the impending death of traditional media and this [data] suggests that depending on which segments you’re going after, traditional is still vibrant,” said Bob Shullman, founder/CEO of the Shullman Research Center, New York.

“When you look at reach and effectiveness, digital is coming up and the wealthier people are using it, but some of the traditional media are still strong.”

The information found in the “Reaching the Wealthy Consumer” report is based on the Shullman Luxury and Affluence Monthly Pulse Fall 2013 Preview Wave that was conducted online Aug. 20-27 among Unites States adults ages 18 or older.

A total of 1,013 completed interviews were obtained from five sample groups divided among four income brackets: $75,000 to $149,999, $150,000 to $249,999, $250,000 to $499,999 and $500,000 or more.

Reach vs. engagement

Fifty-eight percent of high-net-worth consumers responded that they had seen or heard advertising on television in the past 30 days, which accounted for the highest overall reach of any platform. Web sites, print magazines, mail, print newspapers and emails followed television in terms of reach.

Ralph Lauren ad in April Robb Report

Facebook and Instagram had higher reach potential among consumers with a net-worth under $1 million.

Print newspapers were regarded by higher-net-worth consumers as the most engaging platform for ads, followed by digital newspapers, Twitter and medical offices.

For respondents with a net-worth below $1 million, tablets, digital newspapers, television and printed magazines were the most engaging platforms.

Rolls-Royce tour

Interestingly, shopping malls were regarded as more engaging for the more affluent consumers.

Climbing to the top

A previous report urges marketers to make distinctions between high-income consumers and wealthy consumers.

While not all millionaires have a high annual income, the report argues that they should still be a primary focus for marketers. As the report splits up its survey base, different attitudes emerge that may be useful for marketers (see story).

Also,72 percent of ultra-affluent said that they buy based on quality and less on price, and 64 percent said that they seek out superior service when shopping. This study builds upon the Shullman Research Center’s last study by providing a closer look at Amazon from the consumer’s perspective (see story).

Fifty-nine percent of adults in the United States have made a purchase on Amazon in the past year, according to the survey.

The “Shullman Luxury and Affluence Monthly Pulse” survey suggests that the consumer shift toward Amazon is powered by the engines of competitive pricing and convenience. Although Amazon’s ascent, capabilities and penetration of the luxury market are nothing new, determining the size of jeopardized market share will help luxury brands find a common ground with the online retailer (see story).

“A lot of marketers are experimenting with a lot of different things, looking for the best solution,” Mr. Shullman said. “It depends on who your customers are.”



Source: http://www.luxurydaily.com/newspape...edia-engagement-levels-among-affluent-report/
 

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A lot of interesting information.

Interestingly, shopping malls were regarded as more engaging for the more affluent consumers.
This is interesting. I'm wondering 'why'. Is it the personal service ? Does the shopper need or desire to feel and touch the products they are shopping for ? Or...is it regarded as more of a social thing to do...something they simply enjoy ? And if so...can on-line shopping experiences more closely mimic this experience ?

I've been reading and looking at websites that are very engaging for the consumer. Apparently a trend. I know I enjoy the experience of such websites.

Thanks again Allen. Love this stuff !
 

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60pc of affluent Baby Boomers inclined to use social media: report
By Joe McCarthy
May 23, 2014

The BMW i3 Experience test-drives

Generational distances regarding social media use are not as wide as commonly thought, according to a report from the Luxury Institute.

Eighty-five percent of millennials surveyed for the report said they were inclined to use social media, compared to 73 percent of Generation X’ers and 60 percent of Baby Boomers. As luddites become further marginalized, brands must adopt a marketing approach that prioritizes individuals over segments and personas.

“The surprising part for me is that Boomers, Gen X’ers and millennials are all consuming all of these media at some level,” said Milton Pedraza, CEO of The Luxury Institute, New York. “It’s not as if they’re getting left behind. These are all affluent people, and tech savvy.

“Life stage matters tremendously but because of the new age of data, analytics and one to one marketing, we can look beyond the segments to the individuals and market to them,” he said.

The Luxury Institute surveyed 1,200 consumers 21 and older with an annual household income of at least $150,000.

Less boundaries

T
he report aims to get marketers to reconsider media consumption in general. The dynamic of how consumers “consume” is messier than the laser-drawn segments of millennials, Gen X’ers and Baby Boomers suggests.

Age provides broad indications of consumer behavior, but individual behavior is more granular, rife with the unexpected.

Baby Boomers do watch more television, with respondents averaging seven hours per week, but millennials are also flipping through channels, with these respondents averaging four hours per week. About 70 percent of all segments surveyed watch previously recorded programs on DVR.


Bang & Olufsen’s newest television

Similarly, while two-thirds of affluent millennial respondents listen to online radio sites such as Pandora and Spotify, 41 percent of baby boomers do as well.

Online video is watched by 82 percent of millennial respondents, 65 percent of Gen X’ers and 53 percent of Baby Boomers.

Video still from LVMH-owned Nowness’ “Mine All Mine”

Baby Boomers spend 2.87 hours per week reading newspapers and magazines, compared to 1.12 hours by Millennials and 1.58 by Gen X’ers.

Although there is a clear hierarchy of preference and habit for each segment, consumers regularly travel between media depending on the circumstance.

Rather than use a blanket-approach to address the habits of different age groups, brands must enact a granular system.

As Ed Brill from IBM recently wrote, “Transactions, multichannel interactions, social media and syndicated data from loyalty cards and other customer-related information have increased the ability for retailers to create a consolidated, constantly updated view of customer behavior and preferences.”

The abundance of touch points gives marketers insights on a person-to-person basis, allowing them to devise customizable interactions for each consumer.

“Marketers need to go beyond stereotypes and propensities, and start doing real one-to-one marketing now,” Mr. Pedraza said in a press release. “The data and analytical firepower are there to build relationships, and wealthy consumers, especially millennials, demand it.”

Specifics

Granularity has become a buzzword recently, with commentators encouraging brands to discard generic personas and replicable stores.

Boston Consulting Group’s “Shock of the New Chic: Dealing with New Complexity in the Business of Luxury” report asserts that consumer interests are fragmented along far too many lines for a brand to have identical stores in different locations. Also, the nomadic nature of luxury consumers forces brands to reassess the nature what each store should achieve (see story).

Forrester recently argued in its “Digital Customer Experience” report that 2014 will be a year of major innovation. Most prominently, brands everywhere will develop user-centric designs and experiences or face the consequences of a consumer exodus (see story).

“We have to look at individual needs, lifestyles and life stages and combine something that’s optimal for each person,” Mr. Pedraza said.

Final Take

Joe McCarthy, editorial assistant on Luxury Daily, New York





Source: http://www.luxurydaily.com/60pc-of-affluent-baby-boomers-inclined-to-use-social-media-report/
 
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Exciting information !
I wonder if it's more challenging for the big players to adjust to this new way of marketing.

I shop at Kroeger grocery store. They have a LOT of organics, great employees, and a well organized, clean store.

They also have a rewards type card I use for discounts. One a month I receive coupons for many of the items I already bu along with competing products. They also include coupons for free products. Good marketing. We in-win.
 

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6 luxury marketing trends to watch

By Marko Muellner

For luxury marketers, 2014 is predicted to be the year that tips the scales, with more than half of affluent shoppers discovering, actively browsing and shopping for luxury items via digital channels. This evolution is spurred by shoppers who are online to save time, yet remain likely to finish the purchase in-store.

According to an April 2013 Luxury Institute study on the multichannel purchasing habits of United States Internet users with incomes of at least $150,000, 48 percent of respondents sourced information about luxury fashion online via a computer. Yet only about a quarter actually completed the purchase online.

Also, eMarketer found that a whopping 74 percent of purchases researched on mobile devices are completed in-store.

Which brings me to the first trend to watch:

Mobile
We tend to think of mobile consumers as similar to desktop consumers, but on different devices. This is just not true.

Most mobile time, is, well, mobile. Digital marketers have always struggled to predictably drive offline traffic to retail, but data suggests this is changing.

With more than 70 percent of daily Facebook and Twitter users on a mobile device, digital marketers must think mobile-first.

For luxury marketers this is particularly challenging as device constraints and consumer expectations limit the richness of the experience.

But with skill and creativity, many luxury marketers are embracing the constraints without compromising brand promise.

Understanding the purchase intent journey
We have been trying to figure out what makes people buy as long as we have been selling, but it is a fragmented challenge and capturing the data at every step has been impossible.

We have made a lot of progress thanks to companies such as Datalogix and others and, as a result, luxury marketers are on the verge of the next evolution, having almost completely wired the journey.

The key, like most things in our modern world, is the smartphone.

In this next phase of digital marketing, understanding how and why consumers buy will be essential to attracting the next generation of affluent shoppers.

Omnichannel continues to gain momentum
Luxury marketers’ ability to reach any given consumer across devices will emerge and quickly mature. This will enable marketers to better understand the customer journey and the patterns likely to drive discovery, exploration and consideration.

With more than half of U.S. affluent consumers soon discovering new luxury products online, it is imperative that luxury marketers understand how these trends converge.

Making connections between channels will be essential as well. Can I schedule a consultation from my phone? Can I easily share what I have liked on the Web site with an associate?

Social + mobile + storefront = Magic
Mobile applications are the key bridge from digital to the store. Look for major innovation in a few categories that will extend this magic, specifically apps that enable shoppers to feel connected to the luxury experience, such as Tourneau’s virtual watch tray that allows online research with pick-up in-store or social shopping apps that enable consumers to “like” and manage products through Pinterest, Wanelo, Polyvore and ShopKick.

Luxury marketers should also watch and learn from mass-market retailers’ innovation and use of digital wallets such as Apple’s Passbook and Google Wallet that can store gift cards as well as brand-specific apps that enable shoppers to manage and receive in-store redeemable mobile offers from anywhere.

The last mile
Vicinity-based mobile notifications that pull information from the app categories above are closing the last mile between the retailer and the consumer.

This year, Apple’s iBeacon (Bluetooth SMART), NFC and other location-based technology will finally begin to take hold.

Leading luxury marketers know that getting someone into the store is 90 percent of the challenge.

Once there, it is a matter of experience, discovery and driving toward high-value products.

With Apple’s deployment of iBeacons, marketers can now communicate with consumers and track everything from how many got close to the store, entered the store, and which products they browsed and bought.

For digital marketers, the long awaited online to offline closed loop reporting will finally be a reality.

Be everywhere
While luxury marketers are notoriously skilled at creating rich experiences from fashion shows to print ads, they have been slow to go deep on digital.

Content is currently the fuel that drives digital marketing. As Burberry has so deftly shown, reaching new affluent consumers requires broad content creation and distribution strategies.

From Instagram and Vine videos to maintaining a Tumblr, luxury marketers must find key audiences and engage in their worlds, adhering to their rules.

While luxury marketers should never be seen as jumping on the bandwagon, being early adopters of new social mobile technology can give them credibility – watch, learn and be ready to jump-in.

But content strategies are hard to form overnight, so luxury marketers must work now to see how they can apply their essence and promise across emerging platforms. They should do it now so they can be more nimble in the future.

SOCIAL MOBILE convergence and luxury’s traditional focus on building experiences that drive loyalty is great for marketers ready to take advantage of the ability to tell a cohesive brand story across channels.

Brands that are able to personalize the experience throughout the customer journey, up to and including the last mile, will see that the dividends drive serious business value, which will only accelerate as millennials grow in their purchasing power and share of affluent luxury consumers.


Source: http://www.luxurydaily.com/6-luxury-marketing-trends-to-watch/
 

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Interesting.

Just putting thoughts off the top of my head out here.. :wideyed:

So, putting myself in the affluent buyer's seat....I'm shopping on-line and see something I really like. I research it....drive to the store to talk with a real live person and touch (maybe) the product I want to buy. Then I buy it. It just seems we can make this better.

If the reason I go to the store is to talk to a real live person....why not offer a Skype call ? Someone who actually works for the company, like a Sales Assistant. Have a virtual face-to-face on the mobile.

Still can't touch the product though. No way to do this over Skype. What if this Sales Assistant worked in a store that had all the product but it's only for the assistants and the customers who Skype with them ? Not an 'open to the public' store.

Or what if the store had a virtual store on-line ? hmmm...not sure if this would work on mobile. There is a 'virtual world'...forget the name. The sales assistant could walk through with the customer until the sale is made.

That's all I've got. Prolly :cookoo:
 
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Affluent consumers disappointed by in-store experiences: report
By Nancy Buckley
July 22, 2014

Affluent Consumers

The United States’ wealthiest consumers primarily spend their shopping dollars in-store, but only a quarter of these consumers enjoy the experience of in-person shopping, according to a new survey by Time Inc. and YouGov.

“The Q2 Survey of Affluence and Wealth,” published by Time Inc. and YouGov, seeks to answer the question about United States consumers’ shopping experiences and whether they face enjoyment or disappointment when shopping. The results of the study will likely inform brands of how to positively change in-store and online experiences to appeal more highly to affluent consumers.

“I think the luxury brands need to understand that the people are in charge of their own purchases and it is hard to market to them,” said Jim Taylor, vice chairman of YouGov, Waterbury, CT.

“There was time where marketing was a creation of things that never existed and we used marketing to promote and persuade, but people have no real want for everything that can be produced, it is need based,” he said.

“Consumers don’t give the word luxury as being evenly applied to all things that are stated as being luxurious, the word luxury does not have a fixed meaning.”

The Q2 Survey of Affluence and Wealthsurveyed 941 of the participants from the Q1 report. The annual household incomes of those surveyed were $125,000 and above.

Online vs in-storeThe survey compared the view of luxury items and in-store experiences across the top one percent of consumers, the upper middle class and the core affluent group.


Dior sales person

Seven out of 10 affluent consumers are disappointed by the sales and service staff and believe that they do not make positive personal connections during shopping experiences. Affluent consumers have reported that, if possible, they prefer purchasing items online to avoid the in-store staff.

Another impact of shopping for the affluent consumer is the perception of luxury. Many of these individuals have stated that numerous luxury products do not appeal to them and that the definition of luxury is too often unclear.

Seventy-one percent of the surveyed consumers stated that most new products that are considered luxury are not what they would define as luxurious.

The ability to adapt to the wishes of affluent consumers can increase a brand’s sales and overall reputation.

Reaching consumersThe habits and opinions of luxury consumers, borne out by research, can guide how brands sell products.

Targeting and attracting the business of affluent consumers is fundamental to a retailer’s economic success, according to a survey conducted by Unity Marketing.

Understanding the retail trends and the competition among the affluent consumers is vital to staying competitive. Gaining this knowledge will help brands, both luxury and mass market, correctly target advertising campaigns and online and in-store promotions to accommodate the wishes of affluents (see story).

Affluent consumers are vital to luxury brands, but brands have to gain a better understanding of these individuals and create products they desire.

“People are concerned about preserving quality,” Mr. Taylor said. “The desire for extraordinary quality products is not going away, people do want the best in the category.

“Brands need to understand what their core market place values are and stick to it,” he said. “The perception of brands of the general component of the market is going downhill, a brand does not necessarily speak a specific value.”


Source: http://www.luxurydaily.com/affluent-consumers-disappointed-by-in-store-experiences-report/
 

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Dolce & Gabbana presents multichannel campaign for new skincare collection
By Nancy Buckley
August 28, 2014

Dolce & Gabbana Aurealux collection

Dolce & Gabbana is embodying the its Latin roots in a new line of facial products that aim to enhance a woman’s natural beauty.

The new beauty collection translates to “gold” and “light” and reflects the natural aura of women. The campaign is being brought to the attention of consumers through a Web page that presents Dolce & Gabbana as likely trying to accommodate to a digital consulting platform that may allow consumers greater interaction with the brand outside physical store locations.

“The main goal of this page is to educate consumers by engaging them with the various touch points on the single Web page,” said Amanda Rue, senior strategist at Carrot Creative, New York.

“The quiz adds an interactive and personalized element to the site,” she said.

“Skin care varies from person to person and this element creates a level of personalization and customization that is unique to an individual. The customized skincare regime creates a seamless way to promote multiple products in a way that tailored to the individual. Because it appears to be unique for the individual, it is likely that this will drive sales of complementary products.”

Ms. Rue is not affiliated with Dolce & Gabbana, but agreed to comment as an industry expert.

Dolce & Gabbana was unable to comment by press deadline.

Golden glow
Dolce & Gabbana has created a platform for Aurealux that has several different features. These include two videos, a quiz, graphs and detailed information about the products.

The Web page begins with a description of Aurealux as an advanced skincare ritual with concentrated Gold Flavo-Silk Tricomplex. This ingredient is crafted from gold silk cocoons and combined with Italian olive oil extract and Vitamin B3. The formula demonstrates the ability to promote and preserve the skin’s beauty through complexion, moisture and the skin’s elasticity.


Aurealux collection

Gold Flavo-Silk Tricomplex is found in all the Aurealux products. The formula was introduced to consumers through a video that tells a story about the Sicilian products.

The gold silk cocoon is a rare, but the life fostering qualities have been removed from the cocoon for Dolce & Gabbana products. The video discusses the combination of the products to form Aurealux.


Gold Flavo-Silk Tricomplex video

Another video was formed to promote the Aurealux collection. This video features each product.

The Web page also presents a quiz for consumers to discover their skin care ritual. This is based on skin type, what the consumer is looking to enhance, how they cleanse their face and what products are currently used in their skincare ritual.

At the completion of the quiz consumers are given a suggested skincare ritual based on the Aurealux products.


Skincare quiz

Other features of the Web page include graphs that show the percentage of people who have used the products and their opinion on the immediate effects and the four weeks later results.

The five products aim to bring the aura of a woman out through natural beauty of her face.

New introductions:

Promoting a new collection can be done in several different campaigns. Some brands opt for a video, others turn to celebrities, while others create informational digital pages.

For instance, Italian fashion label Giorgio Armani highlighted its Frames of Life eyewear collection with a narrative story told through text and a video.

Consumers were first introduced to a scrollable shoppable narrative before viewing a campaign video, both of which follow a man and woman while they try to run into each other again after “The Encounter.” Through this campaign, Armani showed that eyeglasses are more than just accessories, but a part of life, affecting how consumers see the world (see story).

Also, menswear label John Varvatos released a video for the fall/winter 2014 collection that corresponds with a broader social effort to raise money for the Ringo Starr Peace & Love Fund.

The social video featured Ringo Starr with several other celebrities playing drums, and a microsite explained his foundation along with the photo campaign featuring the hashtag [HASHTAG]#PeaceRocks[/HASHTAG]. The combination of Ringo, his foundation and the hashtag campaign blended with the John Varvatos brand generated awareness of the fall/winter 2014 collection (see story).

Presenting a new collection to consumers can be difficult, but with a multichannel campaign a brand can bring attention to a new product through several facets.

“The Web page creates an environment for visitors to learn more about the new product line, Aurealux,” Ms. Rue said.

“Visitors can explore the new product line, supporting video, product benefits and receive a customized skincare routine,” she said. “This approach encourages visitors to engage with the site to learn more about the new products, while also leading visitors further down the purchase funnel.”
Final TakeNancy Buckley, editorial assistant on Luxury Daily, New York, NY





Source: http://www.luxurydaily.com/dolce-gabbana-present-multichannel-campaign-for-new-skincare-collection/
 

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@AllenCrawley

Sir, do you have any tips on selling a Luxury branded product on Amazon/Ebay? These platforms seem like a race to the bottom as far as quality and price. How does a company with half of a reputation emerge from the margin-less mayhem of people selling similar products? Is the brand alone enough to charge a premium on Amazon/Ebay?
 

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An incredible article over at Luxury Daily on what content marketing looks like for luxury brands. The article includes some great examples of what a few luxury brands are doing around content creation and delivery.

From Snapchat to Youtube to Long Form Video Series to City Guide Apps to Shopable Videos to Personalized Content.

Do take the 5 minutes to read and brainstorm how you can do the same for your brand.



Why and how content marketing works for luxury

By Tammy Smulders

Content marketing is a buzzword in the marketing world, but what does that actually mean and what is its role for luxury brands?

Content marketing, or branded content, is brand-related content with which consumers, or in our case, luxury consumers, actually choose to engage. It has value for the audience first – whether entertainment, information or other value – and the brand second.

Content can live in marketing and media channels, but is not a channel itself. Content can be a spoke or a hub: it can be distributed through media, or part of a destination.

Importantly, content is a means of engagement with current and prospective customers, and gives the luxury brand its own voice.

For luxury brands, the chief value of content marketing lies in its ability to reel in, persuade and evangelize the most discerning audience in a language and elevated aesthetic that is particular to luxury...

Continue reading the full article at:
http://www.luxurydaily.com/why-and-how-content-marketing-works-for-luxury/
 
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