By Rieva Lesonsky
Are you marketing to luxury customers? Then you?ll want to know the results of the latest American Express Business Insights survey. The study of what luxury consumers are doing and spending had some surprising results. Here?s some of what American Express found:
Flash sales stimulate buying: Online discount luxury shopping sites such as Gilt Groupe have stimulated consumers? appetites for luxury fashion. In 2010 flash sale spending increased by 92 percent over the prior year. In 2011, there was still growth of 21 percent in flash sale spending?but customers are spending more on full-priced luxury items.
Full-price spending grows: Full-priced online luxury websites accounted for 25 percent of luxury shoppers? spending in 2011, up from 20 percent in 2010. Leading the pack were Gen Y consumers, who aren?t limiting themselves to discounted luxury but are willing to pay full price.
Gen Y spending on luxury: Gen Y consumers increased their spending on premium luxury fashion by 33 percent in 2011 compared to 2010. Although they represent the smallest group of luxury consumers today, Gen Y?s spending in full-priced online luxury retail grew more than any other group?s, increasing by 31 percent in 2011 over the year prior, compared to Gen X at 23 percent, Boomers at 19 percent and Seniors at 6 percent for the same period. Gen Y also led luxury spending among all groups in specific retail categories such as jewelry, with an increase of 27 percent for 2011 as compared to Gen X and Boomers, which increased 2 percent and 4 percent, respectively, and seniors, whose jewelry spending dropped by 3 percent in 2011.
Seniors go online for bargains: While Gen Y shoppers have moved on from discount online luxury fashion to full-priced online luxury retail, seniors are increasingly flocking to luxury flash sales. This age group led all others in spending growth for online luxury flash sale websites during 2011 at 28 percent, followed by Gen Y at 19 percent, Gen X at 12 percent and Boomers at 9 percent. In contrast, seniors are less likely to go into brick and mortar luxury retailers, where their spending dropped by 1 percent in 2011.
How can your business take advantage of these trends?
Diversify your sales channels. With even seniors less likely to frequent brick and mortar stores, physical locations are likely to become a less important outlet in the coming years. Make sure your ecommerce component is robust by optimizing your site for mobile use on smartphones and tablets, and adding features such as live chat, videos and detailed 360-degree photos of items, and product reviews.
Be open to new markets. If you focus on full-priced luxury products, you may have assumed Gen Y wasn?t your market. Similarly, online flash sale retailers may be surprised to see seniors coming on board. As your target market evolves, be ready to adjust your marketing methods, product offerings and other factors to suit the new breed of customers and how they like to shop.
Listen and learn. Use social media, reviews and other customer feedback to listen in on what customers are saying about your business, your stores, your website and your products. Tailor your product mix and make other changes needed to suit what they want.
Image by Flickr user Mauro Cateb (Creative Commons)
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The views expressed here are the author's alone and not those of Network Solutions or its partners.
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