Richemont Readings
north american luxury industry news . . curated by iProspect
Welcome to iProspect's January Newsletter
We understand your time is valuable & want to ensure you are getting the most updated and relevant industry news without having to scour the Internet on your own time, so we'll be sharing our favorite pieces of recent luxury, retail and jewelry/watches digital news via this newsletter, delivered conveniently to your inbox on a monthly basis.
If there is ever a topic we haven't covered, please let us know and we'll be sure to include it for the group! For January, we've covered the following topics: affluent consumers (Canadian, Chinese, American), SEA/paid search, digital advertising resources (benchmarks to fun facts) and the lastest POVs and whitepapers from iProspect.
Happy reading! Please let us know what you think.
Andrea
---AFFLUENT CANADIAN MARKET---
Canadian Consumer Behaviors in Luxury Retail (study)
Prior to committing to a luxury retail purchase, three in four consumers admitted to spending considerable time researching products. In fact, more than half of respondents said they felt they spend more time researching their luxury purchase today, as opposed to two or three years ago. In many cases, consumers reported using more than one channel to gather information, such as reading online reviews (45%), visiting the brand’s website (68%), and going to the brick-and-mortar store (67%).
Link to full infographic here
Link to full study here
Is Canada Wealthy Enough for Saks & Wave of Fellow Luxury Stores? (article)
CIBC cautions the crop of inbound luxury retailers “still risk disappointment in the size of that [affluent] segment relative to where it sits on their more familiar U.S. turf.” It seems rich Canadians aren’t as rich as rich Americans, CIBC said. “Despite the rising trend of inequality” in Canada (following the lead of the U.S.), “both pre- and after-tax income in Canada is not nearly as unevenly distributed as it is stateside,” the Canadian bank’s economist said.
An annual income of $360,000 earns an American entry into the one-percent club, compared to the comparatively leaner $201,000 in Canada, meaning even the richest Canadians don’t have nearly as much discretionary money to play with.
Link to Global News.ca article here
-----AFFLUENT CHINESE MARKET-----
90% of Traveling Chinese Luxury Shoppers Plan Purchases Before Trip (study)
- 38% know exactly which products they will be buying
- Unsurprisingly, they’re doing their research online, with 50% heading to luxury brands’ official sites and 49% to social media pages for their primary source of information.
- The most popular categories for purchases were accessories (71%), and high-end cosmetics and skincare (70%) while other categories also did well: 63% bought watches and jewelry, 62% picked up clothes, and 52% purchased wine or fine liquor on their trips.
- “Quality” was the most important deciding factor for purchases, with 45% of respondents listing it as a key reason for purchase and 56% saying that it’s the term they most associate with luxury goods (in addition, 46% listed “fine design” and 40% named “established heritage” for this category).
- Meanwhile, 42% of respondents bought items for a sense of taste and differentiation, while 42% bought them to “reward themselves.” Airport duty-free stores were almost on par with brand boutiques for purchase channels, with 24% buying at the former and 26% the latter.
Link to article from Jing Daily here.
5 Top China Luxury Market Predictions for 2015 (article)
- Chinese luxury spending will remain slow on the mainland but high across the world
- Luxury retailers will up their e-tail game
- Consumer tastes shift from self-expression to self-fulfillment
- Quality trumps quantity when it comes to marketing strategies
- Big data hits luxury in China
View the entire Jing Daily article here
Chinese Consumers Plan to Spend Same or More Next Year (report)
90% of mainland Chinese consumers plan to maintain or grow their spending in 2015, according to a December 2014 report by Ruder Finn and Ipsos.
Despite lots of conversation of a slowdown in spending, the market has remained largely unchanged, according to the authors. This report concludes that Chinese shoppers will continue to be a large growth factor for markets outside of China, allowing them to retain their position as “the world’s number one luxury force.”
While Chinese consumers do carry out more and more of their luxury shopping outside of China, it is important to remember that China remains their first point of contact with international luxury brands,” said Simon Tye, executive director of Ipsos. “The China Luxury Forecast found that only 10 percent of mainland China consumers are very satisfied with luxury retail services in the country.
--------AFFLUENT U.S. MARKET--------
The New Face of Luxury (study)
Luxury brands lose 50% of their top customers annually because they routinely misidentify their demographic and economic profile while also failing to create a personalized sales experience for them, according to new research from Epsilon and The Luxury Institute.
Epsilon analyzed and compared 30,000 luxury shoppers to uncover insights, myths and stereotypes of the luxury shopper, the firm said.
According to the findings, luxury brands mistakenly believe their customers are typically female and on average 45-years old with a net worth over $1 million. However, 57.5% of luxury spenders are in fact male. They are likely to be of Asian and Middle-Eastern descent with a net worth over $500,000. In addition, nearly 13.8% of shoppers with a net worth over $1 million invest mostly in modern, contemporary decor and gifts as opposed to high-ticket apparel items.
Trend Report for Luxury Brands Online (study)
Millennials are disproportionately driving traffic growth despite relatively meager disposable incomes, but there is accelerated growth across all age groups.
The trends report remains a study of contrasts which have come into sharper focus with each successive year: affluent vs aspirational, younger vs older, exclusive vs pure-play.
Link to study here, CNBC article discussing the study here
------SEA / PAID SEARCH NEWS------
Search Predictions for 2015: The Industry Experts Weigh In
1) Retargeting will get real - tying search/audience/cross channel targeting
2) Connecting sales data to marketing - convergence of granular data
3) Stop playing catchup, mobile will be massive
4) Cross device targeting & attribution will have it's day - tools getting better & more granular
5) PPC goes beyond just traditional text ads & search placements - growing search on specialty sites
6) Search will be on the leading edge of wow - more predictive, cool tools like voice & visual search, conversation focused
Link to Microsoft's blog post here
How Yahoo!/Firefox Deal Will Change the 2015 Search Landscape (POV); Google Search Share Falls to Lowest Level Since 2008 While Yahoo Gains (article)
Link to iProspect official POV here, with synopsis below:
Yahoo is now the default search provider for Firefox 34 users. With this change, Yahoo should see an uptick in search volume, and in turn generate additional ad revenue from the added click volume.
For this study we examined the natural search data representing 200 million visits from clients representing luxury and retail apparel, to consumer electronics and software. We also looked at a wide range of client traffic across industries and measured Search Engine referrals to their site(s) for an inside look at search traffic referral sources.
Based on this analysis, we’ve developed 4 easy to digest sections around the marketing implications of this change, and guidance on how to approach paid and organic campaigns accordingly.
- How the change could affect your brand’s traffic.
- The expected changes to the search landscape.
- How to approach your SEO campaigns going forward.
- How to approach your Paid Search campaigns going forward.
How Will Voice Search Impact a Search Marketer's World? (article & study)
While you can’t yet pull data to understand if a search was done via voice or text based search (yet), it is possible to look at conversational keywords (what, where, how) within a search. Some of the results showed that for retail brands, people are much more interested in finding locations by asking "Where". This means that we have to give a closer look at the experience we are giving the consumers of these terms like: are we directing them to the boutique locator page? With 40% of respondents using voice search to ask for directions, it's clear it needs to be a priority.
View the PR Newswire release here and the Search Engine Watch commentary here
-DIGITAL ADVERTISING RESOURCES-
Global Interest in Haute Horlogerie +23% (article) via 2015 World Watch Report (study)
The report focuses on the situation of the Haute Horlogerie category:
1) Uncovering the markets where interest for the Haute Horlogerie category is growing/declining compared to the previous year, with a focus on China.
2) Benchmarking consumer interest for the brands, disclosing the most/least popular Haute Horlogerie brands and collections worldwide.
3) Looking at Haute Horlogerie on social media platforms: Facebook and Instagram.
Article in Luxury Daily here
Preview slides to World Watch Report's Haute Horlogerie 2015 Edition here
Comparing Ad Formats (infographic)
Although traditional banners are seeing decreases in performance compared to rich media (which includes dynamic), video ads, and mobile – there is still an active audience where traditional banners make the most sense. In general, this study found that rich media makes banners 267% more clickable than traditional banners. Hobbies/interests and shopping have the highest CTR in rich media and video, but strongest engagement in mobile.
View the infographic and AdAge article here.
The Internet in Real Time (living infographic)
View the addictive updates here
How Your US City Influences Your Spending (article)
NYC spends +597% the national average on watches, while Baltimore spends 71% less.
Link to NYT article here
--RECENT iPROSPECT NEWS & POVs--
Display Advertising: Making Sense of Viewability
The goal of performance display is the same as any other online/offline advertising channel - to raise awareness while conveying a specific brand message or to influence the target audience’s behavior, driving them to take a desired action. Digital display does this by placing a brand’s message (in the form of a banner ad) in front of the right person at the right time, whether through direct site buys or programmatic bidding.
Today there is an ongoing debate as digital marketers question how many display impressions are paid for and seen by the intended target audience. This metric, known as viewability, continues to be a hot topic of debate within the digital marketing community.
Our POV explores definitions, pros & cons as a KPI & viewability-based pricing (specific to both branding and performance display).
Link to Dropbox to view/download POV here
Personal, Adaptive, Valuable: The Future of Retail (whitepaper)
We invite you to read our latest whitepaper in which iProspect’s industry knowledge of digital strategy intersects with the trajectory of affluent consumer preference to reveal the future of retail.
Let’s define the three principles driving the future of retail:
- Personal: Understanding the unique needs of the shopper.
- Adaptive: Is the shopper in-store or online? On mobile or at home?
- Valuable: Saving the shopper time, energy and/or money.
Download the whitepaper today to read about these principles in more detail, as well as explore some best-in-class brand using these in their consumer strategies. Please also note the appendix findings that break down the research into very specific consumer segments - including HHI (mass and ultra affluent), gender and generation (Millenials, Gen X, Boomers 50+).
iProspect Acquires Rockett Interactive (news)
The acquisition will propel iProspect forward by enhancing our understanding of consumer decision-making at the deepest levels as we continue to aim for performance marketing dominance.
Founded in 2003, Rockett Interactive utilizes a range of proprietary expertise, methodology and tools to engage their clients’ customers, including strategic planning, online connection mapping, attribution modeling, performance display, search engine marketing, organic site optimization, mobile marketing and social media.
In today’s convergent world, every screen can be a transaction point. For performance marketing to drive business results, we must have total visibility into both a client’s business and the complexity of the consumer journey. The acquisition of Rockett Interactive builds on to the expanded scale and category expertise iProspect now has with Covario. It also adds attribution expertise and a service model that enables us to holistically understand the impact of client’s media spend on consumer behavior, even when it’s not directly connected to a sale.
Facebook's Move Away From Organic Promotional Content Signals Shift Toward Storytelling (POV)
As the majority of you advertise on Facebook, this update applies to you.
Facebook’s success relies on the amount of active users, and the time those users spend on their platform. The social network has received clear feedback that people want to see less promotional content in their newsfeed. In response to this, beginning in January 2015, Facebook will further reduce the amount of organic promotional content shown in user news feeds. In this POV, we cover why Facebook is making this change and the new way marketers should think about advertising on Facebook.
---YOUR iPROSPECT SENIOR TEAM---
Kim Sivillo
Amanda DeVincentis
Chie Ugwuala
Dessa Lambert
Eleanor Smith
Julian Hahm
About iProspect
Email: richemont@iprospect.com
Website: iProspect.com
Location: 150 e W 42nd St, New York, NY, United States
Phone: 917.326.2707
Facebook: facebook.com/iprospect
Twitter: @iProspect