Leading Edge Insights into the World of the Wealthy

Transcription

1 New York Vol. 10 No. 1 First Quarter 2014 Leading Edge Insights into the World of the Wealthy Inside This Issue: WealthSurvey: Leveraging Technology In-Store and Online Affluent U.S. consumers weigh in on how brands can bring both the in-store and online experience full-circle by using a mix of technology and human interaction. 2 WealthSurvey: Leveraging Technology to Build Customer Relationships Consumers from U.S. households with minimum annual income of $250,000 share preferences and opinions regarding ways that companies can integrate technology into the shopping experience. 3

2 2 WealthSurvey: Leveraging Technology In-Store and Online Technology continues to blur the line between online and brick-and-mortar retail, transforming the shopping experience. Retailers have a wide selection of hardware and software that can allow them to recognize customers, gather data, customize offers and up-sell like never before. The question is how can brands bring both the in-store and online experience full-circle by using a mix of technology and human interaction. Wealthy shoppers are big fans of online shopping, with one in four planning to make at least 50% of their discretionary purchases in the next year via the Internet a proclivity especially pronounced among younger and higher net worth shoppers. About three out of four (78%) plan to make at least 20% of their purchases online. However, even with the rise of online shopping a large number of affluent consumers still value and prefer interaction with sales professionals. Technology has very little to do with the online and in-store features that wealthy shoppers desire most. In fact, it is actually customer centric policies that consumers want most from their preferred brands. Far and away the most popular website element is free shipping and returns, cited by 92% of respondents as something they would like to see from brands whose sites they shop. Purchasing online and picking up in-store (45%), related product recommendations (44%) and reserving products online to buy in-store (43%) are also popular online features. In physical stores, the benefit with the widest appeal is the ability to return online purchases for a full refund, something that 76% of respondents demand. Nearly half (45%) want to see extended store hours. Brands have an opportunity to replicate individual and personal service of the store experience online. A significant number of wealthy consumers agree that a live chat or video with a sales professional would help explain details that are not apparent on the website (47%), and allow consumers to have their questions answered at any time of day (58%). Similarly, 48% say that online video or chat is much easier than going to a store. Only 15% of shoppers say they tried live chat or video and that they would not do it again. These results point to the rising demand for omni-channel personal assistance, both in-store and online. Using technology in-stores to accelerate checkout is popular among the affluent but many wealthy shoppers shy away from self-checkout. Almost three-fourths (73%) say that they appreciate the time savings of checking out via mobile devices instead of standing in line at cash registers. Handheld devices instead of registers can cause confusion: 30% of shoppers say they would not know whom to approach to make their purchases. Doing it yourself is still not universally appreciated. Although 45% of shoppers say that self-checkout is more efficient, 44% still prefer their transactions to be made with help from sales professionals. As far as receipts, 58% prefer to walk away with a paper copy, and 42% do not mind having them ed.

3 3 Conclusions Wealthy consumers of all ages and genders are increasingly comfortable making purchases online, although they have differing viewpoints on the role of customer service representatives when shopping online and in-store. Affluent consumers under age 55 show heightened interest in innovative website features such as same-day delivery, virtual fitting rooms, tailored webpages, and integration of preferred items from their social network. As a result of industry trailblazers who have established customer-centric policies, shopper expectations of their preferred brands have risen. The multi-channel habits of today s wealthy consumer have led to an increased desire to easily browse, reserve and purchase using a mix of channels. Complimentary shipping, returns and full in-store refunds are by far the most important influencers for purchasing online. These measures of convenience have become commonplace and are likely major reasons why online shopping has increased. While most affluent consumers favor equipping sales associates with mobile checkout technology, they are divided on the benefits of self-checkout, with a slight majority of older consumers preferring human assistance. Recommendations Brands must not only provide a balance of online and in-store options but also tailor their strategies to appeal to consumers who favor self-service, as well as those who still prefer human assistance, in order to drive loyalty. Brands must leverage customer data and shopping habits to develop additional exciting elements for their websites that create unique and engaging online experiences. Brands have an opportunity to deliver a flexible cross-channel purchasing experience by ensuring that information and policies are shared by in-store, online, and mobile teams. Senior executives should think like a consumer when developing after-sales policies to truly understand that customers view brands as a single entity and not separate divisions (In-store, online, mobile, etc.). To ensure efficient and effective service that drives sales, brands must optimize technological advances with salesperson development, including comprehensive training programs. WealthSurvey: Leveraging Technology to Build Customer Relationships Stories about data security and personal privacy dominate the headlines, with high-profile security breaches at retailers Target and Neiman Marcus, along with new details continuing to emerge about the National Security Agency eavesdropping on U.S. citizens. On the luxury retail front, the question for brands is how to strike a balance between respecting privacy and making use of valuable customer intelligence.

4 4 The Luxury Institute surveyed consumers 21 years of age and older from U.S. households with minimum annual income of $250,000 about preferences and opinions regarding ways that companies can integrate technology into the shopping experience. Respondents median annual income is $342,000 with median net worth of $2.6 million. Most wealthy shoppers understand and are not opposed to allowing companies to collect their personal data and use it for customized marketing messages. For example, 71% say they are comfortable with brands sending them a notification when an out-of-stock item they wanted to buy becomes available. Cross-marketing is also a growing opportunity. Half of wealthy shoppers appreciate receiving notifications when an item related to a past purchase goes on sale. Consumers have varying preferences for how they wish to be contacted, but may still be a better choice than text messages for many. Only 20% of wealthy shoppers are comfortable receiving text notices about products related to their past purchases and more than half say they dislike the practice. Wealthy consumers how strong distaste for clandestine data gathering methods using mobile phones, facial recognition software and GPS tracking. Technology exists that allows companies to gather information about a shopper s location and purchase history but 69% of wealthy shoppers say information collected in this manner is a violation of their privacy, a sentiment particularly strong among shoppers 55 and older. Nearly two out of five (38%) wealthy shoppers under 55 say that automated data retrieval is more efficient; only 26% of older shoppers agree. More than 70% are uncomfortable with any use of GPS signals to track their location. Just 24% approve of retailers using facial recognition software to identify them and observe shopping habits. Conclusions Most wealthy consumers indicate that they do want some follow up communication from brands to help guide future purchases, although individuals have varying preferences regarding their ideal method of contact. Affluent consumers across all ages and levels of income are concerned about brands using a variety of GPS monitoring techniques to observe their movements in and around stores. GPS tracking would raise serious privacy concerns, especially among older individuals and those with lower net worth. Younger consumers are aware that brands are already collecting customer data automatically by tracking purchasing activities and monitoring GPS signals. They are more likely to agree that technology can help streamline and personalize the customer shopping experience. Although technology is evolving and brands are beginning to incorporate high-tech elements in-store, consumers are not yet comfortable with facial recognition software, especially women, consumers over 55 and those with lower levels of income.

5 5 Recommendations Sales associates should actively determine customers individual communication preferences by consistently asking how they prefer to be contacted and entering this data into the CRM system. Customer data is the foundation of earning trust and building lasting customer relationships. As there has been an increased global focus and aversion to targeted data monitoring, brands considering leveraging GPS signals must carefully weigh potential backlash, even if they openly share the program and benefits with customers. As new technology and mobile strategies emerge, brands must balance innovation to engage younger consumers with traditional sales associate data collection so as not to alienate clients who would like more control over their personal details. As technology advances, brands must conduct further research among consumers to monitor opinions of facial recognition over time given that the acceptance of this software is likely to evolve. Members of LuxuryBoard.com have free access to greater details of these WealthSurveys and others via the online Resource Center. To join or learn more about membership benefits, visit About The Luxury Institute: The Luxury Institute is the objective and independent global voice of the high net-worth consumer. The Institute conducts extensive and actionable research with wealthy consumers about their behaviors and attitudes on customer experience best practices. In addition, we work closely with top-tier luxury brands to successfully transform their organizational cultures into more profitable customer-centric enterprises. Our Luxury CRM Culture consulting process leverages our factbased research and enables luxury brands to dramatically Outbehave as well as Outperform their competition. The Luxury Institute also operates LuxuryBoard.com, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises. More details at or contact us.

6 Available for Purchase: Luxury Institute s Research Inventory 2014 LBSI Categories* Casinos Premium Champagne Premium Gin 2013 LCEI Categories* Automobiles Consumer Banking Experiences 2013 LBSI Categories* Handbags Home Appliances Premium Scotch Premium Tequila Luxury Retailers Mass Market Retailers Hotels (Europe) Wealth Management Premium Vodka Premium Skin Care Click here for more details about Luxury Institute Research Recently Published WealthSurveys* Brand Partnerships Experiences with Luxury Salespeople Facebook Marketing Facebook Usage and Trends Leveraging Technology In-Store and Online NEW Leveraging Technology to Build Customer Relationships NEW Loyalty and Rewards Programs Luxury Brand Marketing to Wealthy Millennials Luxury Brand Stores vs. Luxury Brand Websites Luxury Brand Stores vs. Saks In-Store Boutiques Luxury Clienteling and Personalized Service ( ) Marketing to Wealthy U.S. Women Mobile Apps and Commerce Among Wealthy U.S. Consumers Privacy Trends The State of the Luxury Industry (US Consumers ) The State of the Luxury Industry (A Global Comparison of Consumers in Top Markets) The State of the Luxury Industry Global Trends Part One The State of the Luxury Industry Global Trends Part Two State of the Luxury Industry Part I: Trends Among Wealthy U.S. Consumers State of the Luxury Industry Part II: Luxury Shopping Habits of Wealthy U.S. Consumers Understanding Wealthy Millennials Wealthy Consumers and Mobile Applications Click here for more details about WealthSurveys *All research is conducted with U.S. consumers unless otherwise indicated