Luxury shoppers are evolving, and luxury brands must evolve with them. As a new generation of shoppers (Gen Z) continues to shop luxury brands, and many global shoppers will look across borders to get the product they’re looking for, luxury brands must be ready to adapt and deliver.
In this blog post, we’re taking a look at luxury shoppers in 2019. Using data from eMarketer on global luxury shoppers and brands, we evaluate what marketers need to know about these shoppers in 2019 and how to meaningfully engage with them.
What motivates and influences luxury brand shoppers?
Understanding how to win luxury shoppers means understanding what compels a shopper to make a luxury purchase.
First, let’s look at data uncovered in a July 2018 eMarketer survey. The survey asked US female shoppers what motivates them to make a luxury brand purchase, and 35% said the “ability to get exactly what they want” is the biggest reason they’d buy a luxury item for themselves. Factors such as cost make shopping for luxury brands something that customers want to get just right, not leave to chance. However, female shoppers in the US are often making a luxury purchase to celebrate something – 24.5% said they were whenever they make a luxury purchase, 4% said they were “celebrating a job promotion or pay raise” and 2% said were “celebrating a new job” as key motivators for making a luxury purchase. Only 5% said they were motivated to make a luxury purchase for “social status or owning luxury brand” products.
Digital channels must be considered by luxury brands, as different channels can influence decisions for shoppers about a luxury brand. eMarketer surveyed luxury shoppers both directly in China – one of the biggest luxury consumers in the world and will account for 70% of global luxury growth by 2024 according to Jing Daily – as well as shoppers worldwide, comparing worldwide shoppers to those based in China. One of the biggest differences between worldwide shoppers and those in China is the value placed on luxury influencers. Worldwide, 13% of luxury customers said that influencers and fashion bloggers affect their opinions or decisions about a luxury purchase, whereas 20% of Chinese shoppers felt this way. Brand websites had the biggest effect on worldwide and Chinese consumers (29% and 26%, respectively), followed by official social media pages (18% worldwide, 27% China). Interestingly, online blogs only affected 12% of global shoppers and 10% of Chinese shoppers. This creates a critical message for luxury brands who are looking to expand into content marketing influencers: know who you’re partnering with and how they’ll represent your brand. It’s no secret that luxury brands look to partner with influencers that will represent the brand well, but also represent a trustworthy and authentic voice to their followers regarding the luxury brand.
Next, let’s look at Gen Z shoppers in the US. Luxury brands will be looking to consider what compels the Gen Z shopper to make luxury purchases – an answer which will reshape digital marketing for luxury in the years to come. According to Mi9 Retail, appealing to Gen Z isn’t as easy as reusing Millennial marketing strategies. Gen Z demands more control and transparency in the shopping process, high-quality products that are making a difference and will be less trusting of brands. This lays out an important path-to-purchase that luxury brands must understand about Gen Z: they’re going to be research-oriented, they’re going to be meticulous, and they’re going to be patient.
As luxury brands consider how to win over shoppers in 2019, these two areas become instrumental in their digital success. First, brands must consider what their customer journey looks like, as well as what customers will discover during that journey. Brands will want to work with the right channels to ensure they’re at every step of the journey, such as partnering with influencers to have an authentic and transparent look at some of the brand’s products and styles. Second, luxury brands will want to consider what messages they’re able to communicate that’s both realistic and important to their customers. Shoppers want to celebrate their personal successes with a “treat yo’self” present, and younger shoppers want to know that the brands they shop have a positive influence in the world. Luxury brands will need to understand what the values of these shoppers are and why they shop luxury brands in 2019 in order to craft meaningful and engaging touchpoints that embrace, not repel, their audience’s needs and wants.
Where are luxury shoppers learning about luxury brands?
In July 2017, eMarketer surveyed young adult shoppers from Italy, China, the US, and the UK to better understand what makes these young consumers open their wallets and spend money on luxury brands. The survey question specifically asked how luxury brands are researched.
The most common answer across these four regions was “social media” with 20.5% of respondents using various social platforms to research a luxury brand or product. The US led in this category with 23.1% of shoppers from the region saying this is the most common platform they leverage. UK and Italy based shoppers weren’t far behind, with 21.8% of UK shoppers and 21.5% of Italian shoppers reporting they also used social media the most of any platform. Chinese consumers, however, most commonly used a brand’s site, with 18.3% of responses from China saying this was their primary method of luxury brand research – compared to 15.1% globally.
Official platforms are one of the best ways for luxury brands to relay information to their Chinese consumers. eMarketer found that 40% of Chinese consumers use the official brand and social media accounts to learn about fashion trends and luxury brands, the highest of any category. Domestic luxury specialists also played a critical role at 37%, followed by consumer reviews from social media at 36%. Key opinion leaders (influencers) were only used to learn about trends and brands by 19% of respondents, though this could be that they’re not looking to learn about trends or brands from key opinion leaders but rather learn more about brands and the products themselves.
Depending on the market a luxury brand is looking to penetrate, their digital strategy may vary greatly. However, that’s not to say that there aren’t similarities that brands should look to understand. While US, UK, and Italian shoppers tend to lean into social media and influencers a bit more, Chinese shoppers vastly prefer official accounts for several of their shopping efforts. Fashion magazines, websites, and celebrities all play crucial roles to a brand’s effort in building awareness and connection with the luxury shopper, but the value of each will vary by region. The best thing a brand can do if it’s looking to penetrate a new region (or enhance an existing one) takes the time to understand what’s being effective in that region, and why it’s working. Different parts of the world will have varying importance on the channel, but the channels remain largely the same, so it’s not a question of “should you?” as much as it is “how much?”.
Where are luxury shoppers purchasing products?
After all the work of connecting with a luxury shopper and remaining active and engaged during their path-to-purchase, luxury brands must know where shoppers are making their luxury purchases – and why.
One of the most common places for luxury customers to make purchases is at the brand’s store itself, according to data from eMarketer. US luxury shoppers go to a brand’s store 84% of the time to purchase luxury products, similar to China (81%) and the UK (72%). There are two reasons behind this that we want to point out. The first is Gen Z’s preferences for in-store shopping and their preference for the “in person” experience. The second has to do with the authenticity of the product themselves. Concerns about paying luxury brand prices only to end up with a fake product is a very real concern for consumers, and by shopping directly with the brand they get the guarantee of a genuine product with the brand’s quality and craftsmanship.
Online shopping through a brand’s site is a little more varied. While 64% of US shoppers are using a brand’s online store, only about half of UK shoppers (53%) are getting their shopping done through a brand’s digital storefront, as well as 45% of Chinese consumers. Additionally, general luxury sites that offer multiple brands are shopped slightly less, with 39% of US shoppers using those sites, 36% of UK shoppers, and 23% of Chinese shoppers. Online shopping is a strong engagement point for US shoppers, but overseas shoppers (for US-based brands) do need to consider additional fees and shipping that incurs when ordering online. The reason you may see lower online shoppers from China, for example, could deal more with those costs, and that Chinese shoppers will sometimes circumvent them through freight forwarding.
For luxury brands looking to consider what 2019 will bring, purchasing channels should be high on that list. The data from eMarketer illustrates some critical areas of focus, but brands can’t overlook the reasons behind why those areas are crucial – doubly-so if they’re looking to reach overseas consumers. The best starting point for luxury brands is to look at where their shoppers are located, as well as how they prefer to shop. One thing luxury brands should consider is how online channels might drive in-store shopping due to the preferences their customers have. When possible, try to bridge that gap between online and physical stores in a smooth and meaningful way.