attitudetowardsluxuryand purchasinghabits · cheap - related to the price common - related to the...

Attitude towards luxury and purchasing habitsResults of the survey

Milan, March 2017

Status used to be about the possession of certain objects. Now, so many people have so much. The result? Status has

become less about 'what I have' and much more about 'who I am': namely, more ethical, creative, connected,

tasteful.

The proportion of people who declared to buy luxury products because they like to show off them is low (just 56%).

On the other hand, most of the respondents (82%) buy luxury products for the positive feeling they experience while purchasing

them.

Attention to sustainability and ethics seems to be a worldwide issue (except in Russia and in Japan).

Premium quality remains a ‘must have’.

All the markets pay a lot of attention to quality.

Wealthy Chinese are the top spenders when it comes to quality: 93% of them declared to buy luxury products because they are premium

quality products.

Spain (92%) and Russia (91%) get into the top 3 while Italy (90%) is placed in 4th position.

90% of Chinese consumers like to buy luxury products which are hand-made and 89% avoid buying luxury products that do not respect

ecological sustainability.

Luxury consumers are now exposed to a lot of stimulus, coming both from print advertising,

television and online.

Traditional media channels (TV, cinema and print advertising) are still considered “top influencers” of the luxury world by most of the

respondents but …

… digital channels has the same influence with millennials as print has (respectively, 58% and 59%).

Online channels increases the need for high-quality, personalized content at scale.

To solve this challenge, some luxury brands start to open up a dialogue with consumers, involving them in the marketing process. VIPs, actors, designers remain top influencers but now people pay

attention also to YouTubers and bloggers.

Physical stores are still popular.

Following an impulse is one of the main reasons why people buy luxury products: when looking for luxury goods, 66% of

consumers declared to be influenced by seeing the product in a physical store.

Moreover, 63% of consumers still prefer the experience of shopping inside physical stores.

57% of luxury consumers prefer mono-brand physical stores.

Multi-channel mobility seems to be the way to succeed with millennials.

47% of worldwide luxury purchases are made abroad or travelling at airport (52% among millenials).

Millennials are also the most digitally influenced: 42% of luxury products purchases made by millennials take place online; 19%

on a mobile device.

78% of online luxury purchases are made at global level in multi-brand stores (e.g. Amazon, Net à Porter, Yoox).

Breakdown of respondents

8

Approach at a glance

The survey was conducted online by peoplewho declared to have purchased at leastone of these luxury categories in thelast 6 months:

• Apparel and footwear• Bags and accessories• Cosmetics and fragrances• Jewellery and watches.

Respondents selection criteria

*Esomar Social Economic Grade is built on the occupation status of each respondent for every country

Respondents had to be above than thenational average in terms of total familyannual income.

The respondents belong to Esomar* SocialEconomic Grade A or B.

Febraury 8th - Survey launched March 3nd - Survey closed

Timing

9

More than 1,300 respondents from across 11 countries

Mature MarketsEmerging Markets

64%

36%

Percentages may not sum up exactly 100% due to rounding

10

Profile of the respondents

Age

Gender

Profession

Status

11%

32% 32%

14%

5% 6%

18-24 25-34 35-44 45-54 55-60 60+

Millennials43%

Generation X46%

Baby Boomers11%

54% 46% 18% 82%

Single In a relationship

Full time employed

81%

Self Employed15%

Part time employed

2%

Retired2%

The majority of the respondents (around 64%) are between 25 and 44. Most of them are married, engaged or in a relationship (82%) and employed full time (81%). This is consistent with the selection criteria.

11

36%

34%

17%

13%

34%

42%

17%

7%

35%36%

17%

11%

Mature Mkt

Emerging Mkt

Total

Travel habits

“How frequently have you travelled abroad by plane in the last 6 months for both leisure and business purposes?”

“Which areas of the world have you visited in the last 6 months?” (multiple choice)

North America43% Europe

74%

Asia49%

South America18%

Africa19% Oceania

11%

1-2 times 3-4 times 5-10 times +10 times

Mature Markets

EU USA Japan

Emerging Markets

China Russia UAE

All the respondents have travelled abroad by plane and have done so at least once in the last 6 months. Europe is the top destination (74%).

Attitudestowards luxury

13

Inclination towards purchasing luxury products

53%

42%

5%

70%

27%

3%

59%

37%

4%

Mature Mkt

Emerging Mkt

Total

Increased

“In the last 5 years, would you say your inclination towards purchasing luxury products has…”

“And in the last 12 months such an inclination has…”

Stayed the same Decreased

49%47%

5%

62%

35%

2%

53%

43%

4%

Increased Stayed the same Decreased

Mature Markets

EU USA Japan

Emerging Markets

China Russia UAE

In the last 5 years, the purchasing inclination towards luxury products has generally increased across both of the areas, especially among respondents coming from emerging markets. In the last 12 months, there has been a small slowdown, but

only 4% of all the respondents declared that their purchasing inclination towards luxury has decreased.

14

TotalMatureMarkets

EmergingMarkets EU USA Japan China Russia UAE

Cosmetics & fragrances

19% 21% 16% 22% 15% 23% 21% 11% 13%

Watches 16% 15% 18% 14% 16% 21% 21% 14% 19%

Jewellery 22% 17% 30% 18% 17% 7% 24% 36% 33%

Bags and accessories

14% 15% 12% 14% 14% 21% 13% 12% 11%

Shoes 12% 13% 9% 13% 16% 11% 8% 10% 10%

Clothes 17% 19% 14% 19% 22% 18% 12% 17% 14%

Jewellery is the top category: a trend boosted by emerging countries

“Thinking about the last 12 months, in which of these categories did you buy the most products?”(multiple choice)

Italy Germany Spain

France UK Switzerland

*EU

Luxury consumers purchased goods fairly evenly across the product categories during the last 12 months. Jewellery is the top category, with most consumers

coming from Russia and the Emirates

15

ImpulseWhen I see something

I like

TrendTo keep up to date

with fashion

OfferWhen something is on

sale/ discount

NoveltyWhen I get bored of

my current items

RoutineAlways buy new luxury

products

NecessityWhen I need it

Cosmetics & fragrances

28% 22% 16% 7% 13% 12%

Watches 30% 26% 17% 9% 8% 8%

Jewellery 38% 22% 13% 8% 8% 10%

Bags and accessories

31% 26% 17% 11% 6% 8%

Shoes 34% 29% 12% 7% 8% 9%

Clothes 29% 34% 14% 7% 8% 7%

Reasons to buy? Follow your impulse and go with the flow

“Which is the main reason for purchasing new luxury items?” (multiple choice)

Following an impulse or the latest fashion trends are the main reasons why people buy luxury products. In particular, jewellery and shoes are the category where people are more used to follow their impulses, while with clothes

consumers tend to go with the flow. Instead, routine and necessity seem to be the main drivers in cosmetics and fragrances purchasing. These trends are confirmed also per geographic area.

16

Some advice for luxury brands: quality first, pay attention to design and reputation and offer premium feel and comfort

“Thinking of when you look for luxury products, which are the most important aspects that you take into consideration?” (multiple choice)

Design

14%

Premium feel and comfort

11%

Value for money

9%

Quality of the materials

17%

TOP

5

Quality of the

materials

21%

Design

16%

Brand reputation

11%

Premium feel and comfort

15%

Design

12%

Brand reputation

15%

Top3

Mature Markets Top3

Emerging Markets

There are 5 key assets that people are looking for when they buy luxury products: the main one is the quality of the materials (17%), followed by design (14%), a strong brand reputation (12%), a premium feel and comfort (11%) and a good perception of price-value alignment (9%). These are 5 ‘must have’ that brands should always care about when they are about to launch a

new product: otherwise the “trade down” effect would be more than a risk.

Brand reputation

12%

17

All the markets pay a lot of attention to quality

“I buy luxury products because they are premium quality”

China93%

41

Spain92%

2

758

Italy90%

Germany90%

US88%

UK84%

Russia91%

369

EAU88%

France81%

10Japan80% 11

Switzerland74%

Note: the percentage per country refers to respondents who answered «important» or «definitelyimportant».

Wealthy Chinese are the top spenders when it comes to quality (93%). Spain (92%) and Russia (91%) get into the top 3, while Italy (90%) is placed in 4th position.

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27%

20%24%

13%

11%4%

Mature Markets

Poor - related to the quality

Cheap - related to the price

Common - related to the spread

Unstylish - related to the style

Basic - related to the design

Boring - related to the feelings

Luxury products must not be either «poor» or «common»

“What would you say is the opposite of luxury for you?”

14%

15%

30%

12%

23%

7%

Emerging Markets

Mature Markets

EU USA Japan

Emerging Markets

China Russia UAE

POOR COMMON

In emerging markets, quality remains important but here there is a greater attention to the

exclusivity of goods.

19

US and China never miss the latest trend

“When it comes to buy luxury products, for me it’s important to buy the latest trend”

US97%

41

China97%

2

758

Spain68%

Russia66%

France63%

UK57%

UAE68%

369

Italia64%

Germany54%

10Switzerland40% 11

Japan38%


The USA and China are the countries where we find the highest proportion of trend followers.

There is an average gap of 30 points between them and the other countries placed in the middle of the rank.

20

Attitude towards luxury products

“Here is a list of statements about the relation you might or might not have with luxury products.Please let us know to what extent you agree with each of them”

56%

57%

60%

63%

68%

82%

88%

22%

24%

21%

21%

24%

13%

10%

22%

20%

19%

16%

I buy luxury products because I like to show off the them

I tend to wear only luxury products and accessories (not commonproducts)

I tend to buy luxury products impulsively

I buy luxury products because I like have things that other peoplehaven't heard of yet

For me it's important to buy the latest trend

When I buy a luxury product I feel happy/confident

I buy luxury products because they are premium quality products

Agree Neither agree nor disagree Disagree

Luxury is not anymore perceived as showing off but, instead, as a personal status about lifestyle. It is not related anymore to possessing the product, instead it is more intangible. Most of the respondents buy luxury products for the positive feeling they experience while purchasing them.

21

Luxury, ethics and sustainability

“And to what extent do you agree with each of these statements related to what “luxury” means in terms of sustainability and ethics?”

TotalMatureMarkets


I like to buy luxury products which are hand-made.

75% 72% 80% 74% 88% 44% 90% 76% 67%

I tend to buy luxury products that are not produced by exploiting the workforce of the poorest country.

66% 67% 64% 69% 78% 39% 73% 46% 69%

I avoid buying luxury products that do not respect ecological sustainability

63% 59% 69% 57% 84% 44% 89% 41% 64%

I buy local luxury brands to support the local economy.

59% 59% 58% 57% 88% 38% 77% 28% 60%

Buying hand-made products is valued by all the countries, especially China. Sustainability also seems to be a worldwide issue, except in Russia and in Japan.

Americans show an inclination towards buying local products (this may be the first “Trump effect” on the luxury industry!).


Luxury as a lifestyle

23

Physical stores are still popular, but online browsing is gaining in popularity

“Thinking about when you look for luxury products, which are the most important aspects that you take into consideration?” (multiple choice)

66%

52%

45%

45%

44%

43%

41%

40%

36%

35%

27%

Seeing the product in a physical store

Seeing the product in an online store

Seeing it advertised online

Seeing it wore by my network/people Ipersonally know

Word of mouth: everyone is talkingabout it

Seeing an ad on a papermagazine/newspaper

Seeing it at a fashion show

Seeing an ad on TV

Seeing it wore by public personalities

Influencers on social networks talkabout it

TV personalities talk about it

Store & Fashion Shows

Online

People

82 % 82 %

78%

Media

75%

24

Media channel fragmentation

“Which of the following media do you consider as the “top influencers” of the luxury world?” (multiple choice)

TV & CinemaMagazines & Newspapers

Online & Social Network

Radio /Web Radio

62% 53% 11%67%

MagazinesMainstream

TV

Satellite TV with thematic

channels

51% 42% 38%

Online

35%

Social Network

NewspapersRadio /

Web Radio

30% 21% 11%

Print advertising still plays an important role but luxury consumers now are exposed to a lot of stimulus, coming both from television than online.

NET

25

Advertising trends among generations

“Which of the following media do you consider as the “top influencers” of the luxury world? -NET” (multiple choice)

Millennials

Generation X

Baby Boomers

73%

64%

61%

59%

64%

67%

58%

50%

49%

9%

13%

8%

The influence of magazines and newspapers is strong especially among baby boomers, while millennials are more used to build up their personal idea of luxury watching TV and scrolling down the

social media pages.

Magazines & Newspapers

62%

Online & Social Network

53%

Radio /Web Radio

11%

TV & Cinema

67%

26

Also YouTubers and bloggers are now top influencers of the luxury world

“Which person do you consider as the “top influencer” of the luxury world?” (free text) Luxury brands could keep this slide in mind when they choose their celebrity representatives.

Luxury shopping experiences

28

47% of worldwide luxury purchases are made abroad or travelling at airport

“Consider the last 12 months. How many of your luxury products purchases take place in your home country, abroad or while travelling at airport?”

53%

31%

16%

Total

Home country

Abroad

Travelling atairport

59%26%

15%

Mature Markets

41%

40%

20%

Emerging Markets

Mature Markets

EU USA Japan

Emerging Markets

China Russia UAE

Consumers coming from emerging markets show a greater tendency to buying products abroad.

29

54%31%

16%

Generation X

Mobility is important expecially to millenials

“Consider the last 12 months. How many of your luxury products purchases take place in your home country, abroad or while travelling atairport?”

48%

33%

18%

Millennials

Home country

Abroad

Travelling atairport 65%

22%

13%

Baby boomers

30

63% of consumers still prefer the experience of shopping inside physical stores

“How many of your luxury products purchases take place in a physical store, online from a computer/laptop or online on a mobile device?”

22%

15%

63%

Total

Online from acomputer / laptop

Online on a mobiledevice

In a physical store

21%

14%

65%

Mature Markets

23%

17%60%

Emerging Markets

Mature Markets

EU USA Japan

Emerging Markets

China Russia UAE

31

Millennials are the most digitally influenced

23%

19%

58%

Millennials

Online from acomputer / laptop

Online on a mobiledevice

In a physical store

21%

14%

66%

Generation X

22%

6%

72%

Baby boomers

42% of luxury products purchases made by millennials take place online; 19% on a mobile

device.

“How many of your luxury products purchases take place in a physical store, online from a computer/laptop or online on a mobile device?”

32

Luxury consumers prefer mono-brand physical stores and multi-brand online retailers

“Do you mainly buy in a mono-brand store or in multi-brand store?”

43%

57%

Physical store

Multi-brand

Mono-brand

78%

22%

Online

78% of online luxury purchases are made at global level in multi-brand stores (e.g. Amazon, Net à Porter, Yoox). On the other hand, while referring to physical stores, 57% of luxury

consumers prefer mono-brand.

33

Online and abroad purchasing are driven by similar reasons

“What are the main benefits associated with buyingluxury products abroad (not in your home country)?” (multiple choice)

45%

59%

37%39%

75%

51%

43%

65%

43%

Greateraffortability

Ability to get itemsnot available in my

home country

Greater offer -more comparison

allowed

Mature Mkt Emerging Mkt TotalMature Markets

EU USA Japan

Emerging Markets

China Russia UAE

“What are the main benefits associated with buying luxury products online?”(multiple choice)

Orders item 24/7

Ability to order items not available in my home

country

Price comparison

No in-store crowds

57% 47% 48%

39%

Greater affordability

36%

34

Advice for luxury brands: tailor your services to the customer

“What experience do you want to have when buying a luxury product?” (multiple choice)

Personalized promotions

Receive some gift linked to the

purchase Home delivery

45% 44% 39%

Obtain discounts for future

purchasing

35%

Premium store experience

Receive the catalogue at home

Receivee-mails personalized

to my needs

33% 30% 24%

Fidelity club registration

32%

Customization and tailor made services are the keys to conquer the heart of luxury consumers.

35

Some examples of great luxury experiences

“When I bought shoes and the

sales person was patient enough

to show me different sizes of

different designs depending on

my comfort.”

“While I was buying a bespoke

suit, I was drinking champagne

with the tailor.”

“My best experience was when I

bought a watch by Chanel

in New Bond Street.”

“Online purchase of some

cosmetics with excellent

packaging, fast shipping and free

samples.”

“Definitely in the store of

Louis Vuitton in Rome.“

“I purchased a diamond in a store

and it was a great experience. I

liked the design, quality and

style.”

“I have purchased a luxury watch

online and it was delivered within

a short time frame.”

“Mulberry handbag - in store at

Heathrow Terminal 5. Great

customer service and advice.”

“Buying shoes by Salvatore

Ferragamo in its store.”

“Consider the last 12 months. Can you describe your best luxury purchase experience?” (free text)

The future of luxury

37

For consumers, future is linked to a widespread use of e-commerce / m-commerce

“How do you see the luxury goods market emerging in your country in the coming years?” (multiple choice)

TotalMatureMarkets


By a widespread use ofe-commerce/ m-commerce.

48% 45% 53% 41% 65% 43% 37% 67% 65%

By enhancing the usability of luxury products.

46% 44% 48% 28% 40% 28% 45% 33% 28%

By linking the luxury products to technology.

37% 30% 51% 42% 57% 43% 45% 48% 55%

By decreasing the prices of luxury products.

32% 30% 37% 29% 34% 28% 64% 44% 38%

By making the luxury products more ethically.

32% 27% 41% 28% 31% 16% 49% 33% 36%

By enhancing the premium feeling given by luxury

products.22% 20% 26% 21% 14% 20% 25% 21% 32%

Again, emerging markets (China in particular) pay attention to ethics.

38

Emerging technologies will play an important role also in the luxury world

“Do you think luxury world will be disrupted by emerging technologies such as robotics, artificial intelligence, 3D printing …?”

8%

14%

23%

16%

Yes, in morethan 10years

Yes, in 6-10years

Yes, in 3-5years

Yes, in lessthan 2 years

Yes61%

No31%

Don't know8%

61% of worldwide luxury consumers think that the luxury industry will be disrupted by emerging technologies (but not in less than 2 years).

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