link.png The New Face of Luxury← Back

 
The luxury retail industry is a wide-ranging, global phenomenon, however it emerges that brands are losing out. Marketing company Epsilon and consulting firm Luxury Institute have published a new report entitled “The New Face of Luxury: Breaking down the myths and stereotypes of the luxury shopper”. The report establishes that luxury brands need to identify who their potential customers are, in order to capitalize fully.
 
The report identifies four different categories of luxury buyers:
 
Aspirational Shopper
Moments of Wealth
Dressed for the Part
True Luxe
 
At the bottom of the scale is the ‘Aspirational Shopper’, who rarely has the means to buy into luxury, contrary to the ‘True Luxe’ shopper, at the top end of the scale, who can afford to buy luxury items without having to worry about cost. Brands need to understand how potential customers might progress from one group to another. 
 

Image source - Epsilon
 
The report brings to light a general misconception that the typical customer is wealthy women of 45 year old or more. However findings reveal that 57.4% of true luxury shoppers are males between 25 and 44 (mostly Asian or Middle Eastern), more than half of which are single. Understanding this can enable luxury labels to attract and better connect with their clientele.
 
In their effort to recruit and retain customers, it also emerges brands need to focus on providing a luxury shopping experience that customers actually want. Whilst it’s important for brand to engage in digital mediums with the growth of luxury online retail, online sales still represent less than a quarter of overall sales as customers seek an exclusive shopping experience. The report establishes that it’s important for customers to be able to physically experience luxury products prior to buying and to receive exclusive in-store treatment.
 
Milton Pedraza, CEO of Luxury Institute says that “Luxury brands lose half of their top customers every year.” The first step is therefore to clearly distinguish who these buyers are, and what they expect of the luxury shopping experience in order to retain them, as well as recruiting new ones.