NEW YORK, NY--(Marketwired - June 17, 2015) - A new survey by the independent and objective New York-based Luxury Institute of men and women, earning at least $150,000 per year, provides details on how and where affluent U.S. consumers shop and spend on luxury items. Respondents reveal details of their in-store and online spending habits for seven categories of luxury goods: apparel; fashion accessories; jewelry; shoes; watches; beauty; and handbags.
Accounting for two-thirds of purchases by high-income customers (68% of men, 64% of women), stores remain the dominant selling channel for luxury goods, but online commerce is rapidly closing the gap in several categories.
Apparel shows the most even mix of in-store and online purchases, and the most pronounced migration away from stores; 26% of women and 23% of men report cutting back on in-store apparel purchases over the past year, while just 18% of men and 16% of women say that they are spending more in stores. By contrast, 52% of men and 46% of wealthy women report spending more money buying clothing more online. Among women buying shoes, 19% are spending less in stores, while 43% are buying more shoes online. The women's beauty goods market shows a similar pattern.
Another market where wealthy consumers are walking away from stores is jewelry, the luxury category currently with the lowest rates (30% for women, 25% for men) of online sales, and the widest gap to close with stores. Two-thirds of men and 45% of women report boosting their online jewelry spending this year, compared to 21% of men and 16% of women who say they are buying more jewelry in stores. One-fifth of wealthy men say that they are cutting back on in-store jewelry purchases.
Watches are also seeing a rapid increase in the share of sales taking place online. Currently 69% of wealthy shoppers buy their watches in stores and 35% buy them online. The trend, however, is toward a greater percentage of online sales; 58% of men and 46% of women report spending more this year buying watches online, compared to 25% and 19% who say they have boosted in-store spending on watches.
The tendency to make a greater share of purchases in stores increases with age, while the preference for buying online is strongest among younger luxury consumers. Wealthy women, 45 and younger, are the demographic group with the lowest share (59%) of spending taking place in stores, and the highest (41%) percentage of luxury spending occurring online. Men, 65 and older, have the greatest share (71%) of in-store spending.
Wealthy shoppers cite convenience, better prices, and wider product selection as reasons they buy online. Top reasons for shopping in-store are seeing, touching, feeling and trying on products. Many women also mention assessing quality as a reason for going into a store to shop and buy luxury goods.
Men who purchase online are more likely than women to indicate that they are doing more of their shopping in any given category online than they used to. Among online shoppers, men are more likely than women to report that they have increased their online shopping in the past 12 months.
Very few wealthy shoppers say they have "stopped purchasing in stores altogether," but in some categories there is evidence of at least a small exodus from stores. Among men buying watches, 14% say that they no longer buy in stores. In handbags, 8% of women say they will no longer buy in-store.
"Store traffic is down across the luxury industry, due in part to the success of online and mobile platforms, but also because luxury brands are falling short in efforts to give wealthy shoppers a reason to shop there," says Luxury Institute CEO, Milton Pedraza. "Physical stores remain essential in maintaining a brand's visibility while also ringing up a vast majority of sales, and smart brands are finding complementary ways to combine brick-and-mortar stores with new technologies -- and training -- to achieve outstanding results."
About Milton Pedraza and Luxury Institute, LLC
Milton Pedraza is the CEO of the Luxury Institute. Over the past 12 years, Milton has established the Luxury Institute as the most trusted global luxury research provider, and the proven high performance luxury client relationships consulting firm. Known globally as the foremost resource for affluent and wealthy consumer insights and client experience best practices, the Luxury Institute has served over 1,000 global luxury goods and services brands across dozens of luxury goods and services categories.
Milton advises and coaches luxury CEOs and serves on the Boards of top-tier luxury and premium brands, and luxury startups. He is sought after worldwide for his practical, innovative and humanistic insights and recommendations on luxury and is the most quoted global luxury industry expert in leading media and publications.
Milton is also an authority on CRM Technology, Analytics and Big Data. Prior to founding the Luxury Institute, his successful career at Fortune 100 companies included executive roles at Altria, PepsiCo, Colgate, Citigroup and Wyndham Worldwide.
Milton was born in Colombia, raised in the United States, has lived in several countries, conducted business in over 100 countries, and speaks several languages.
For more information and additional insights from this survey and other research, visit www.LuxuryInstitute.com, or contact Luxury Institute CEO, Milton Pedraza, directly with questions (mpedraza@luxuryinstitute.com).
Contact Information:
Katherine Sousa
ksousa@luxuryinstitute.com