Through the Looking Glass: Current Trends in the Luxury, Affluent and Wealthy Markets How Your Customers Shop Today and Tomorrow

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1 Through the Looking Glass: Current Trends in the Luxury, Affluent and Wealthy Markets How Your Customers Shop Today and Tomorrow

2 Today's Presentation Introductory Remarks Who Are Your Prospects? What Are Your Prospects Planning to Buy? How Are Your Prospects Shopping Today? How Do You Communicate with Your Prospects? Closing Remarks 2

3 Sources of Today s Presentation Shullman Luxury, Affluence and Wealth Pulse Fall 2014 Wave March 2014 Current Population Survey from the Bureau of the Census 3

4 Typical Ways of Segmenting Prospects Household Income $250,000 to $499,999: 3% (6.6 million) $500,000 or more: 1% (1.5 million) $75,000 to $249,999: 38% (90.6 million) Under $75,000: 58% (140.6 million) Total Adults: million Source: Bureau of the Census, March 2014 Current Population Survey 4

5 Typical Ways of Segmenting Prospects (continued) Personal Net Worth $1 million to $4.9 million: 9% (21.6 million) $5 million or more: 2% (3.9 million) Under $1 million 89% (213.8 million) Total Adults: million Source: Shullman Pulse

6 Typical Ways of Segmenting Prospects (continued) Gender Women: 52% (123.4 million) Men: 48% (115.9 million) Total Adults: million Source: Bureau of the Census, March 2014 Current Population Survey 6

7 Typical Ways of Segmenting Prospects (continued) Generation Seniors: 14% (32.0 million) Millennials: 30% (72.5 million) Baby Boomers: 31% (74.3 million) Gen-X: 25% (60.5 million) Total Adults: million Source: Bureau of the Census, March 2014 Current Population Survey 7

8 Who Are Your Prospects? 8

9 Who Are Your Prospects? Nationally, about 92 million American adults (about 3.5 million in the Chicago area) with household incomes of $75,000 or more as follows: Generation Age Number of Adults Millennials 18 to million Gen-X 35 to million Baby Boomers 50 to million 9

10 Who Are Your Prospects? (continued) Marital Status Married or partnered Single (never married) Widowed/separated/divorced

11 Who Are Your Prospects? (continued) Type of Residence Own Rent

12 Who Are Your Prospects? (continued) Wealth Metrics Average Net Worth $739,000 $768,000 $597,000 $791,000 Average Liquid Assets $439,000 $618,000 $311,000 $376,000 12

13 Who Are Your Prospects? (continued) Agreement with Key Psychographics My family is currently a top priority in my life I like to buy American products and services I tend to buy based more on quality and less on price Friends/family come to me for advice and my points of view I seek out superior service when shopping

14 Who Are Your Prospects? (continued) Agreement with Key Psychographics (continued) I love to shop I like to buy designer or luxury brands When shopping, I look for exclusive products and services I usually buy the brands my parents bought I sometimes buy products endorsed by celebrities

15 What Are Your Prospects Planning to Buy? 15

16 Personal Plans Relating to Home, Kitchen, and Baths Have one or more home, kitchen, or bath plans Plan to buy a home, kitchen or bath related product Plan to remodel or renovate within/outside the home Plan to redecorate within/outside the home

17 Personal Plans Relating to Home, Kitchen, and Baths (continued) Plan to use one or more of the following professionals Retail store design or sales staff Building contractor Interior designer/decorator Landscape designer Architect Landscape architect

18 How Are Your Prospects Shopping Today? 18

19 How Are Your Prospects Shopping Today? The Two Phases of Shopping The Discovery/Search/Research Phase The Buying Phase 19

20 How Are Your Prospects Shopping Today? (continued) 20

21 How Are Your Prospects Shopping Today? (continued) Discovery/Search/Research Phase Preferences Online In person at a store Other

22 How Are Your Prospects Shopping Today? (continued) Buying Phase Preferences Online In person at a store Other

23 How Are Your Prospects Shopping Today? (continued) Buying Behaviors for Recent Luxury/Premium Home Furnishings Purchases In person Online Other

24 How Are Your Prospects Shopping Today? (continued) Selected Benefits of In-Person Buying Need/prefer to see/touch/smell/try/taste I enjoy shopping Wanted it immediately/to take it with me Wanted customer service/sales help Was in store/store is close Got a better price/deal in-store

25 How Are Your Prospects Shopping Today? (continued) Selected Benefits of Buying Online Convenient/easier Free shipping Better price online Better selection Can do at any time/faster than going to store Don't have to leave home/stores not in area

26 How Are Your Prospects Shopping Today? (continued) The Amazon Phenomenon Shop at Amazon (Base: Shop at Amazon) Enrolled in Amazon Prime Shop at Amazon once a month or more often

27 How Are Your Prospects Shopping Today? (continued) The Amazon Phenomenon (continued) Amazon is better than other stores Amazon is about the same as other stores Amazon is worse than other stores

28 How Do You Communicate with Your Prospects 28

29 How Do You Communicate With Your Prospects? The Primary Communication Channels Include: Media Touchpoints Friends and Family 29

30 How Do You Communicate with Your Prospects? 30 Shullman Research Center (continued)

31 How Do You Communicate with Your Prospects? (continued) Digital Devices Currently Owned Own a smartphone or tablet Smartphone Tablet Have one or more apps

32 How Do You Communicate with Your Prospects? (continued) The one "must have" digital device Smartphone Tablet Internet-connectable television Other devices

33 How Do You Communicate with Your Prospects? (continued) Touchpoints on Which Advertising Recalled in Past 30 Days Television Social media sites In mail sent to your home Radio Magazines (printed or digital) Billboards Newspapers (printed or digital)

34 How Do You Communicate with Your Prospects? (continued) Touchpoints on Which Advertising Recalled in Past 30 Days (continued) Inside stores Gas stations Shopping malls Movie theaters Airports or airport lounges Sporting stadium or arenas Bus stops/subway stations/train stations

35 How Do You Communicate with Your Prospects? (continued) Touchpoints on Which Advertising Recalled in Past 30 Days (continued) Elevators Inside airplanes At a community or social event Office building lobbies Health clubs/gyms

36 How Do You Communicate with Your Prospects? (continued) "Considerable" or "Some" Interest in Advertising on Touchpoints Magazines (printed or digital)* Shopping malls Social media* Television Inside stores Movie theaters At a community or social event * Average of individual components 36

37 How Do You Communicate with Your Prospects? (continued) "Considerable" or "Some" Interest in Advertising on Touchpoints (continued) Health clubs/gyms Sporting stadium or arenas Newspapers (printed or digital)* Elevators Radio Office building lobbies Gas stations * Average of individual components 37

38 How Do You Communicate with Your Prospects? (continued) "Considerable" or "Some" Interest in Advertising on Touchpoints (continued) Inside airplanes Bus stops/subway stations/train stations In mail sent to your home Billboards Airports or airport lounges

39 How Do You Communicate with Your Prospects? (continued) Rankings of Reach vs. Interest: Top 7 for Touchpoints According to Reach Television 1 4 Social media sites 2 3 In mail sent to your home 3 17 Radio 4 12 Magazines (printed or digital) 5 1 Billboards 6 18 Newspapers (printed or digital)

40 How Do You Communicate with Your Prospects? (continued) Rankings of Interest vs. Reach: Top 7 for Touchpoints According to Interest Magazines (printed or digital) 1 5 Shopping malls 2 10 Social media sites 3 2 Television 4 1 Inside stores 5 8 Movie theaters 6 11 At a community or social event

41 How Do You Communicate with Your Prospects? (continued) Ways of Communicating With Family and Friends Social media sites Conversing by telephone Conversing in person Texting Through instant messages Through Skype Online chat

42 How Do You Communicate with Your Prospects? (continued) Ways of Communicating With Family and Friends (continued) In a written message through the U.S. mail or a delivery service Video chat Writing blogs

43 Concluding Remarks 43

44 Concluding Remarks One approach does not fit all customers or prospects. The three generations of interest differ materially according to their ages, marital status, residence types, and psychographics. As they age, the Millennial generation will continue to evolve. Upwards of two thirds of the upscale generations are in the market for home, kitchen, or bath-related products and services. There are changes in how the upscale generations are discovering, researching, and searching for the products and services they will be buying. They expect they can shop any way they want digitally or in person. Keep your eyes on what Amazon does while it continues to evolve as it markets to all adults (generations, income segments, etc.) by offering breadth of offerings, convenience, and sometimes price. 44

45 Concluding Remarks (continued) The traditional advertising touchpoints continue to reach the upscale generations, even though social media brands in aggregate have become a very powerful channel among the Millennials and Gen-X'ers, for whom it is now their #1 source of advertising messages. When considering which advertising touchpoints to employ by their engagement capabilities, note that the generations differ materially regarding the touchpoints they use. Finally, when considering how families and friends potentially spread marketing and brand messages by today s "word of mouth," again note that there are material differences in behavior across generations. 45

46 Thank You 46

47 Appendix 47

48 Table of Contents for Appendix Sources of Today s Presentation 49 Who Are Your Prospects? Personal Net Worth 50 Personal Liquid Assets 51 Personal Plans Relating to Home, Kitchen, and Baths 52 How Are Your Prospects Shopping Today? Discovery/Search/Research Phase Preferences 55 Buying Phase Preferences 56 Benefits of In-Person Buying 57 Benefits of Buying Online 58 How Do You Communicate with Your Prospects? Touchpoints on Which Advertising Recalled in Past 30 Days 59 "Considerable" or "Some" Interest in Advertising 64 Ways of Communicating With Family and Friends 69 48

49 Sources of Today s Presentation The insights and data presented in this report are based on the Shullman Luxury, Affluence and Wealth Pulse Fall 2014 wave, conducted online between August 22 and August 27, 2014, among adults age 18 or older. Five consumer segments were surveyed. In addition to a representative national sample of adults (1,003 interviews), four consumer segments were also targeted to obtain the following number of completed interviews among adults in households with $75,000+ household incomes: $75,000 to $149,999: 303 interviews $150,000 to $249,999: 250 interviews $250,000 to $499,999: 251 interviews $500,000 or more: 252 interviews Results were weighted on demographic characteristics to reflect estimates from the March 2013 Current Population Survey of the Bureau of the Census released in September

50 Who Are Your Prospects? Personal Net Worth Under $100, $100,000 to $249, $250,000 to $499, $500,000 to $999, $1 million or more Average $739,000 $768,000 $597,000 $791,000 50

51 Who Are Your Prospects? (continued) Personal Liquid Assets Under $100, $100,000 to $249, $250,000 to $499, $500,000 to $999, $1 million or more Average $439,000 $618,000 $311,000 $376,000 51

52 Personal Plans Relating to Home, Kitchen, and Baths Home-Related Plans (Net) Buy new bedding/sheets, etc Remodel or renovate a room in your house Buy flooring, rugs or carpeting Redecorate your home Buy new living room furniture Remodel or renovate garden or plantings Buy new kitchen appliances

53 Personal Plans Relating to Home, Kitchen, and Baths (continued) Buy new bedroom furniture Buy new bathroom fixtures Buy new outdoor furniture Buy new family room furniture Buy new dining room furniture Construct/remodel/renovate outdoor living space Buy a home security/alarm system Buy a pre-owned home

54 Personal Plans Relating to Home, Kitchen, and Baths (continued) Employ a gardener/landscaper Buy china, crystal, and/or silver Buy a newly constructed home Employ an interior designer or decorator Employ an architect Buy a vacation or second home Design or build a new home

55 How Are Your Prospects Shopping Today? Discovery/Search/Research Phase Preferences Online (net) Online on a computer Online on a tablet Online on a smartphone In person at a store By mail order By phone/by calling the store Through a personal shopper

56 How Are Your Prospects Shopping Today? (continued) Buying Phase Preferences Online (net) Online on a computer Online on a smartphone Online on a tablet In person at a store By mail order By phone/by calling the store Through a personal shopper

57 How Are Your Prospects Shopping Today? (continued) Benefits of In-Person Buying Need/prefer to see/touch/smell/try/taste I enjoy shopping Wanted it immediately/to take it with me Wanted customer service/sales help Was in store/store is close Got a better price/deal in-store Just prefer in-person/not comfortable online Easier in person/hard to buy on Internet No need to go online Online not secure/safe/don't trust it

58 How Are Your Prospects Shopping Today? (continued) Benefits of Buying Online Convenient/easier Free shipping Better price online Better selection Can do at any time/faster than going to store Familiar with product/website Can do research Don't have to leave home/stores not in area Don't need salesperson/agent Get points/coupons for shopping online

59 How Do You Communicate with Your Prospects? Touchpoints on Which Advertising Recalled in Past 30 Days Television Social media sites (net) Facebook Websites In s In mail sent to your home Radio Magazines (printed or digital) Billboards

60 How Do You Communicate with Your Prospects? (continued) Touchpoints on Which Advertising Recalled in Past 30 Days (continued) Newspapers (printed or digital) Magazines: printed Newspapers: printed Inside stores Smartphones/tablets (net) YouTube Gas stations Shopping malls Movie theaters

61 How Do You Communicate with Your Prospects? (continued) Touchpoints on Which Advertising Recalled in Past 30 Days (continued) Smartphones Twitter Tablets Medical offices Google Pinterest Airports or airport lounges Sporting stadium or arenas Newspapers: digital

62 How Do You Communicate with Your Prospects? (continued) Touchpoints on Which Advertising Recalled in Past 30 Days (continued) Instagram Magazines: digital LinkedIn Bus stops/subway stations/train stations Tumblr Elevators Inside airplanes Skype At a community or social event

63 How Do You Communicate with Your Prospects? (continued) Touchpoints on Which Advertising Recalled in Past 30 Days (continued) In digital games Office building lobbies Health clubs/gyms Flickr VK Vine

64 How Do You Communicate with Your Prospects? (continued) "Considerable" or "some" interest in advertising (Base:) Saw or heard advertising on specific touchpoint Skype Magazines: digital Tumblr Google Magazines: printed VK Vine Shopping malls Instagram

65 How Do You Communicate with Your Prospects? (continued) "Considerable" or "some" interest in advertising (continued) (Base:) Saw or heard advertising on specific touchpoint LinkedIn Television Pinterest Flickr Inside stores Newspapers: printed Movie theaters YouTube Twitter

66 How Do You Communicate with Your Prospects? (continued) "Considerable" or "some" interest in advertising (continued) (Base:) Saw or heard advertising on specific touchpoint At a community or social event Health clubs/gyms Tablets Sporting stadium or arenas Elevators Facebook Websites Radio In s

67 How Do You Communicate with Your Prospects? (continued) "Considerable" or "some" interest in advertising (continued) (Base:) Saw or heard advertising on specific touchpoint Smartphones Office building lobbies Medical offices Gas stations Newspapers: digital Inside airplanes Bus stops/subway stations/train stations In mail sent to your home Billboards

68 How Do You Communicate with Your Prospects? (continued) "Considerable" or "some" interest in advertising (continued) (Base:) Saw or heard advertising on specific touchpoint Airports or airport lounges In digital games

69 How Do You Communicate with Your Prospects? (continued) Ways of Communicating With Family and Friends Social media sites Conversing by telephone Conversing in person Through Facebook Texting Through instant messages Through Skype Online chat

70 How Do You Communicate with Your Prospects? (continued) Ways of Communicating With Family and Friends (continued) Through Instagram In a written message through the U.S. mail or a delivery service Reading Twitter posts Posting to Twitter Video chat Through Snapchat Through Pinterest Through YouTube Reading blogs

71 How Do You Communicate with Your Prospects? (continued) Ways of Communicating With Family and Friends (continued) Through Google Through LinkedIn Through Tumblr Writing blogs Through Vine Through myspace Through flickr Through foursquare Through Vimeo

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