Online vs. In-Store Shopping

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2 Online vs. In-Store Shopping Since 2005, Retail Sales have grown... GAFO Stores = 16.7% Electronic Retailers = 112.9% $1,192,197 $1,143,426 $1,155,854 $1,136,469 $1,110,155 $1,114,590 $1,088,369 $1,059,599 $1,236,878 $1,213,518 $1,400,000 $1,200,000 $1,000,000 $374,556 $348,126 $325,817 $293,582 $262,912 $223,681$229,153$235,352 $202,251 $175, GAFO Stores Online/Etail $800,000 $600,000 $400,000 $200,000 $0 What kinds of online experiences do today s affluent consumers and tomorrow s want? This new report from Unity Marketing will tell you. It gives an overview of how affluents are using the internet today and data to help you map a path to the future online affluent customer. Online e-commerce is the growth darling at retail, continuing a steady upward trend even during the Great Recession. While GAFO retail, which tracks the sales of the types of stores found in the nation s malls, shopping centers and main streets, grew 17% from , the sales for electronic retailers more than doubled in the same time period. Yes, online retail still is dwarfed by traditional retail, but the trend is clear American shoppers today, and tomorrow, will continue to want the kind of experiences that online retail gives them. Unity Marketing, /4/2015 2

3 Where Affluents Shopped SOURCE: UNITY MARKETING ACTS SHOPPER TRACK SURVEY % 10% 20% 30% 40% 50% 60% 70% 80% Internet or Online websites, (specifically internet-only retailers such as Amazon.com, ebay.com, etc,) 72% Discount department stores and discount mass merchants or discounters websites Clothing and/or fashion accessories stores or websites Department stores or department store websites Home improvement stores, hardware stores, garden centers and/or patio/outdoor living stores or websites Warehouse clubs or websites Personal care, beauty, cosmetics or fragrance specialty stores or websites 2015 (n=1,313; Avg. income $258.7k) 65% 61% 60% 60% 54% 51% Looking across the shopper landscape, we find the affluent shoppers, those with incomes at the top 20% of U.S. households, are the most active and high-powered customers. While they number some 27.6 million households, out of the nation s total 123 million, their spending potential is huge. Affluents spending is projected to reach $6 trillion in 2015, contributing nearly 50% of the total $12.1 trillion of total U.S. personal consumption projected in 2015, as reported by the latest BEA estimates. And where do the affluent heavylifters like to shop most? Online, of course. In Unity Marketing s latest Affluent Consumer Tracking Study (ACTS) Shopper Track survey, which examines affluents shopping behavior, online shopping tops the list of their favorite shopping experiences, used by 72% of the affluent high-end shoppers surveyed in the three-month study period. The next most popular destination is discount department stores and massmerchants, used by 65% of those surveyed, who had an average income of $258.7k. Unity Marketing, /4/2015 3

4 Get online and grow your brand s connection with young affluents Learn how young affluents are shopping online, what features they value most in online websites, what makes sites sticky so they return again and again. Gain insight into the social media habits of young affluents and learn why overly promotional social media efforts fail. Discover how to engage young affluents in social media to drive purchase of your brand. Uncover the importance of mobile access to reach young affluents and how to capture their attention on mobile devices, including ways to attract young affluents to download your brand app and get them to use it. This new report, Affluents Online A Generational Perspective, examines the online shopping patterns of the top 20% most valuable target customers. Filled with descriptive statistics made actionable through analysis and case studies, this report gives marketers aiming to attract the high-spending, heavy-lifting affluent shoppers to their online destinations the insights they need to deliver the kind of shopping experiences they crave. What s more, it provides a forward-looking perspective on the young affluent shoppers, aged years and members of the Millennial and GenXer generations, who are growing in spending power and in the life stage where their spending reaches its peak (see chart to left). This new report will help your brand prosper online today and tomorrow with a view of the young affluent HENRYs who are growing their wealth and spending power toward ultra-affluence by Unity Marketing, /4/2015 4

5 Introduction & Key Findings 2 Research Objectives & Methodology 6 Affluents Online 9 How they use internet in their luxury lifestyles 10 Use of mobile devices 11 Mobile app strategies 14 Shopping Online 20 Online shoppers profile 21 Time spent online 23 Strategies for marketing luxury online 26 Trends in online shopping 27 Favorite online shopping destinations 28 Flash sales sites: yesterday s news 30 Services affluent & luxury online shoppers value 31 Marketing strategies that influence online shoppers 36 How affluents discover new websites 38 Showrooming: Do affluents use it? 39 How online shopping compares to in-store shopping 41 About Social Media 45 Social media activity & affluents connections 47 Social media usage & trends 50 Affluents & Facebook (usage, friends, why use, activities) 52 Social media strategies for luxury brands 60 LinkedIn, Twitter 61 Connecting with brands on social media 64 Top social media brands 67 How the best social media brands use it 73 About Mobile Devices & Mobile Apps 79 How affluents use their mobile devices 80 Type of apps & paid/unpaid 81 Use of mobile devices for shopping 83 Luxury brand apps 85 Strategies to integrate mobile strategies with in-store to create future retail 86 Unity Marketing, /4/2015 5

6 6 Unity Marketing, /4/2015

7 In this study Unity Marketing analyzes the results of a survey into how affluent consumers use the internet and social media in pursuit of their luxury lifestyles. In particular, the results of this research survey is viewed through the lens of age or generational cohort: Young Affluents (24-44 years) years years Mature Affluents (45-70 years) Average Income by Age years years OVERALL $266.9K (IN 000) $0 $50 $100 $150 $200 $250 $300 $350 n=1,200 $241.0 $215.1 $263.5 $300.1 $295.7 $303.3 Young Affluents, aged years and members of the Millennial and trailing-edge GenXers and Mature Affluents, aged years and leading-edge GenXers and Baby Boomers. The survey was conducted in January 2015 among n=1,200 affluents, out of which almost all or 95% (n=1,142) reported using the internet over the past three-months in support of their luxury lifestyles. The average income of the total sample was $266.9k, 40% male/60% female. In our survey sample, the young affluents (24-44 years) have an average income about 25% higher than the mature affluents (45-70 years). Some 24% of the oldest cohort (55-70 years) is retired, which draws the average income down among the mature affluents. Unity Marketing, /4/2015 7

8 This study reveals how affluents of different age groups and generational cohorts use the internet, social media and mobile devices and apps in support of their luxury lifestyles so that marketers can develop strategies to use these marketing and branding tools most effectively. It answers these critical questions for marketing and brand managers: How often do affluent consumers use the internet in support of luxury goods and services purchases, what they buy online, how much they spend? When do they turn to the Internet and why they use it? What are their favorite luxury websites and what specifically do they value about their favorite websites? How do affluent luxury shoppers use social media to learn about luxury brands, share information about luxury brands, and connect with people with similar outlooks on luxury brands? What turns them on about using the Internet for luxury purchasing and research? What is the opportunity for luxury marketers to connect with their customers through mobile media? Age, not Income, Is Most Critical in How Affluents Use the Internet Understanding the internet-powered luxury customer is key to successful online marketing strategies and understanding the differences between online affluents of different generations is the key demographic that distinguishes the best luxury customer online. This is a survey of a highly selective sample Affluents (top 20%; avg. income $266.9k) who purchased any luxury or high-end goods or services in the three-month study period. This report provides descriptive statistics, as well as analysis and ways to take action on the specific findings. It gives you the What-So What-Now What stories from the research. Unity Marketing, /4/2015 8

9 Today s consumer marketers face an increasingly competitive environment with many business and marketing challenges. Unity Marketing leads with research to help businesses gain insights into their core customers and their best target customers the affluent who have discretionary income to spend. Copyright Unity Marketing /4/2015

10 Affluent Consumer Tracking Study Two waves, including special investigations Spring Shopper Track Brand Loyalty & Rewards Fall Product & Services Track Special Investigation: Affluent Attitudes & Lifestyle Consumer Gifting Study In-depth investigation into gift choices and shopping behavior among middle-income to upperincome consumers. Special investigation into how consumers use the internet for their gift research, planning and buying needs. Survey completed April 2015 (n=1,649 consumers HHI $97,900) Millionaire Market Monitor Partnership with American Affluence Research Center, a study of millionaires (net worth of $1 million or more) about their consumer attitudes and motivations Fills a gap in millionaire consumer insights Wealth & affluence are different Millennials on the Road to Affluence New study with important implications for every brand that wants to continue to do business after 2020 To deliver more actionable insights to marketers about the best potential customers in the U.S. consumer market today the affluent top 20%. Copyright Unity Marketing,

11 Qualitative expertise Focus groups, IDIs Expert, influential & channel partner studies Quantitative expertise Survey design Data analysis including statistical data analysis Analyzing survey results for key take aways Marketing & branding consulting How to use research to create more powerful brands and more compelling marketing Boutique marketing research and consulting firm We specialize in business insights into mind of affluent consumer

12 Greater access to new AFFLUENT consumer SAMPLES In-depth data about HIGH-END & LUXURY customers Understanding of BRAND USAGE & AWARENESS Key COMPETITOR BRAND usage & awareness Purchase & usage TRACKING STUDIES CUSTOMER SURVEYS and studies to identify new opportunities Unity Marketing can provide more data about the affluent consumers, combining both qualitative and quantitative research strategies

13 UNDERSTAND your best prospective CUSTOMERS needs and desires Get the COMPETITIVE EDGE Develop more effective MARKETING STRATEGIES RESEARCH your market SHARE customer KNOWLEGDE & INSIGHTS Evaluate NEW PRODUCTS Find best CHANNELS OF DISTRIBUTION Track TRENDS in the market Unity Marketing can help you use the research data you have on hand to greater effect to drive growth for your business. We consult with companies of all sizes, from small to midsized to large multi-nationals. We support retailers, manufacturers and marketers in both B2C and B2B marketing strategies.

14 In addition to this trend report, Pam Danziger and the Unity Marketing team offer a range of tools and resources to help marketers and retailers identify their best customers and channel partners and how to reach them most effectively with targeted marketing strategies and tactics. Unity's research-based approach can help marketers and retailers find new opportunities for growth in their businesses. or call to discuss your marketing challenges. 8/4/2015 Copyright Unity Marketing 2015

15 Internationally recognized expert in business insights for marketers targeting the uppermiddle and affluent consumer segment. Pam is president of Unity Marketing, a boutique marketing consulting firm founded in Leadership in luxury marketing recognized through Global Luxury Award presented by Harper s Bazaar, London May She was named to Luxury Daily's Luxury Women to Watch in She is a member of Jim Blasingame: The Small Business Advocate s Brain Trust and a contributing columnist to The Robin Report. Currently Pam is working on two new books: Shops that Pop! and Millennials on the Road to Affluence Most recent book, Putting the Luxe Back in Luxury: How New Consumer Values Are Redefining the Way We Market Luxury. Previous books, Shopping: Why We Love It, Let Them Eat Cake: Marketing Luxury to the Masses as well as the Classes & Why People Buy Things They Don t Need Unity Marketing, /4/

16 95 Unity Marketing, /4/2015

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