Richemont Readings
north american luxury industry news curated by iProspect
Welcome to iProspect's May Newsletter
In jumping into May and the (almost) beginning of summer, we are happy to present to you our latest collection of stories, articles, research & think pieces relevant to your world.
This month's newsletter contains the following topics: consumer research (though, to warn, there are less studies out there recently than normal), industry landscape findings (including jewelry, luxury and digital news, inclusive of lots of omnichannel studies done recently), mobile updates, competitive trends, and our latest iP POVs/news. We've also included recaps of Conde Nast's International Luxury Conference in Milan at the end of April where relevant.
If there is ever something we haven't covered, please let us know and we'll be sure to include it for the group next time.
For your convenience as always, we've linked to previous newsletters on the bottom should you need to reference again and/or share with colleagues.
Enjoy the nicer weather!
Andrea
-----CONSUMER RESEARCH-----
Reaching Asian Luxury Consumers Requires Deep Psychographic Understanding (article)
While much attention has been paid to the spending power and penchant for luxury goods among Chinese consumers, brands cannot assume that the same exact attitude and shopping habits exist across all Asian countries, according to findings from Agility Research.
China’s maturing luxury buyers care most about quality and exclusivity, while in other areas, such as Hong Kong and Singapore, luxury is more defined by a lofty price point. As luxury brands spread out and increase operations throughout Asia to reach what will be 1 billion affluents over the next 10 years, understanding the nuances and personality traits typical in particular countries can help them more accurately market to residents.
Link to fascinating Luxury Daily article here
Are Men Bigger Digital Shoppers Than Women? (study)
Males made the move to No. 1 this year. 3 in 10 males make an online purchase at least weekly, vs. 18% of females. And, while 4 in 10 females bought online occasionally, men were still more likely to actively shop digitally at least once per month or more, at 62% vs. 58%.
More findings from eMarketer's study here
44% of Affluents Shop Online for Better Selection (report)
The research and discovery phases of affluent shopping reflects the online shopping influence with 84 percent of affluent consumers claiming to research online prior to shopping. However, 42 percent of affluents report choosing in-store shopping over online, indicating that the in-store experience is not completely lost.
Consumers chose indoor options because they prefer to see, touch, smell, try and taste the item prior to their purchase. Twenty-nine percent of affluent chose to shop in-store out of pure enjoyment of shopping and others like the immediate gratification.
Online marketplace Amazon is a threat to many luxury brands with its expanding presence and recent ranking as the top store for affluent consumers, according to Shullman Research Center. Consumers are increasingly turning to mass-market online retailers to shop for the convenience, lower prices and better selection. Competing with retailers that can offer these benefits to consumers is a challenge among luxury labels, but the exclusivity and service options of these brands often win with top consumers looking for the total experience when purchasing a product.
-----INDUSTRY LANDSCAPE NEWS-----
The Jewelry Industry in 2020 (study)
The trends that have unfolded in the apparel sector over the last three decades appear to be playing out in the jewelry sector, but at a much faster pace.
The jewelry industry seems poised for a glittering future. Annual global sales of €148 billion are expected to grow at a healthy clip of 5 to 6 percent each year, totaling €250 billion by 2020. Consumer appetite for jewelry, which was dampened by the global recession, now appears more voracious than ever. But the industry is as dynamic as it is fast growing. Consequential changes are under way, both in consumer behavior as well as in the industry itself. Jewelry players can’t simply do business as usual and expect to thrive; they must be alert and responsive to important trends and developments or else risk being left behind by more agile competitors.
McKenzie's research indicates that five trends that shaped an adjacent industry—apparel—over the past 30 years are becoming evident in the jewelry industry as well, and at a much faster pace:
Internationalization of brands and industry consolidation
Growth of branded jewelry
Reconfiguration of the channel landscape
Polarization and hybrid consumption
Fashionability and acceleration
It seems likely that the jewelry market of 2020 will be highly dynamic, truly globalized, and intensely competitive. Those jewelry companies that can best anticipate and capitalize on industry-changing trends will shine brighter than the rest.
Link to must-read from McKenzie here
Focus is Key to Omnichannel (article)
The term omnichannel itself is misleading, suggesting that companies need to broaden their approach and do a little bit of everything. Instead, what they really need to do is to take a laser-like approach, not a flashlight — focusing their attention solely on the consumer and connecting with individual shoppers wherever they want to meet.
To truly bring online and offline operations together, companies can’t separate their businesses in terms of Web, mobile and in-store. They have to get to a place where it doesn’t matter where the transaction happens, as long as the customer is finding what they want and buying.
Link to download WWD magazine article here; link to online version (subscription-model) here
Heritage Brands Must Adapt to Remain Relevant (article)
Helping it remain a presence over the years has been Hermès’ willingness to embrace new methods of communication and adapt its existing craftsmanship when working with what materials are available. As technology evolves, luxury brands must take the lead in a way which maintains their core values and aesthetic.
“No matter how prestigious or old you are, you need to be relevant to your time to continue to exist,” said Axel Dumas, CEO of Hermès.
Link to Luxury Daily article here
Technological Revolution Helps Luxury Get Back to Its Roots (article)
While technology and luxury may have seemed disparate fields, the two are merging more frequently as houses embrace digital innovation, said the CEO of Berluti at the Condé Nast International Luxury Conference April 22.
Despite technology companies’ comparatively young ages, they have a lot to offer centuries-old luxury brands in terms of returning to their heritage of community and service. Rather than a fad, this merging of luxury and technology is not disappearing anytime soon.
Hard Luxury Faces Dangers, Opportunities in Times of Crisis (article)
Hard luxury goods comprise 22 percent of the global market share of luxury and are growing at a faster pace than other sectors, according to the CEO of Kering’s luxury watches and jewelry division.
Although a strong sector in the luxury market, hard luxury, consisting of jewelry and watches, has faced recent hurdles that other sectors have not seen. During the “Hard Luxury or Soft Luxury” session at Conde Nast International Luxury Conference April 22, Kering’s Albert Bensoussan spoke of the major challenges currently affecting the hard luxury sector and how these issues can led to opportunities.
Link to Luxury Daily article here
Should Luxury Brands Stop Avoiding Ecommerce? (article)
Affluent consumers have shown their interest in buying goods online, but many luxury brands have been hesitant to embrace ecommerce as part of their retail strategy. Even with the possibilities through ecommerce from a sales perspective, how can luxury brands decide if selling online is right for them?
-----MOBILE UPDATES-----
Mobile is the Key to Global Ecommerce Success (article & study)
If brands polled customers around the world one thing would be clear: shoppers in different regions want different things. But, one new fantastic report (filled with beautiful infographics and helpful findings) indicates there is one thing all shoppers want: flexibility.
comScore and UPS have released the UPS Pulse of the Online Shopper and the findings indicate that, on a global scale, retailers would benefit by offering their customers more flexibility. That flexibility is crucial not only in how shoppers pay for their purchases but how retailers set up shop to serve both online and in the mobile space and how/where customers can receive their packages.
Some interesting findings from the report include:
- 45% of Asian shoppers would like online orders delivered away from their home
- 39% of Brazilian shoppers, the most mobile friendly, report they can't get clear product images on their mobile devices
- European shoppers are most likely to shop in-store, but 52% said that when ordering online they want to see expected arrival dates not 'expect delivery in 4 days' type messaging
- 83% of American shoppers will wait up to 2 days for package arrival if shipping is made free
Link to Biz Report article here, link to view study here
Mobile Advertising From Behind The Eyes (study)
To understand the effectiveness of mobile advertising, the study compared native ads and banners, both placed in-feed. Nielsen worked with five premium advertisers, creating mock ads from similar creative elements that were optimized for each format. Study participants were shown a video simulating the experience of scrolling through an editorial feed. The feed was paused and the participants were shown either a native ad or an in-feed banner. Using a combination of EEG data— measurements of neural activity in the brain—and eye tracking, Nielsen quantified where and how the participants' focus was being directed.
Key Findings:
Native Ads Appear to Receive Two Times More Visual Focus than Banners
Banners Are Processed Peripherally
Native Ads Are Being Read
Native Ad Headlines Can Be Optimized to Trigger Associations
Brand Assets Impact Brand Resonance Lift
Link to MediaPost article here; view Sharethrough/Nielsen full study results here
Marketer's Guide to Mobile Marketing Orchestration (study)
This is a helpful and easy to skim guide for marketers who are looking to take full advantage of the new opportunities mobile marketing afford them.
Highlights from the guide include:
- Mobile’s magic moment has arrived
- Consumer behavior is changing quickly
- It’s all about the customer journey
- More tools in the mobile marketing toolbox
- Beware of the “S” word - "silos"
- Three mobile orchestration real-life examples: 1) mobile communication from purchase to delivery, 2) the cross-sell and up-sell opportunity, and 3) personalized experience based on location
Link to view Oracle study here
The Future of Cross Device Search (article & study)
Search Marketers Move on From Keyword to Secondary Signals.
US internet users are conducting more and more searches that start and finish on different devices. As advertisers shift more of their search budgets to mobile, this multi-device behavior makes paid search targeting and accurate performance measurement more difficult. But there are some methods and best practices that marketers can adopt to improve their results.
Points of discussion include consumer search habits, measurement challenges & the future of targeting.
-----COMPETITIVE TRENDS-----
Using Mobile Apps to Manage Timepiece Collections (article)
U.S.-based Govberg Jewelers is helping watch enthusiasts better manage their collections by releasing a new mobile application that will aid in maintaining, servicing and storing information about their timepieces.
Govberg OnTime is designed to be the ultimate companion for horologists, providing them with the latest news, extensive information about their own collection, and concierges to assist them in making transactions. By creating a unique app that consumers can use to manage a large connection, Govberg is providing an essential resource to the most elite consumers in the industry.
Link to Luxury Daily article here
How Rolex Runs on Autopilot (article)
Fashion trends come and go, but Rolex’s clean, utilitarian designs have lasted. The brand is now worth more than $6.5 billion.
It follows, then, that the marketing department has reached the point where it can pretty much leave things on autopilot—which is clearly what their recent ads do. Why fuss with verbiage when you can just run the famous brand name with a pretty picture?
The ad is clever in its simplicity, but Faber doesn’t consider it to be clever marketing. By losing all the copy, Rolex is also missing out on the chance to extol its standards, craftsmanship, 108 years of history—the very things that made it an iconic watch in the first place. “Sure, nobody wants to read text anymore, but they’ve also abandoned the heritage factor,” he said. “It’s ballsy of Rolex to do nothing, and I’m surprised. It seems more important to sell the logo than sell the quality.”
Link to AdWeek article here
Apple Watch Highlights Reliability, Personalization Aspect of Horology (article)
Whether the Apple Watch will prove disruptive to the traditional watch industry has yet to be determined, but the degree of quality behind Apple’s first wearable technology is clear (see story). Apple extensively researched the materials for the watch, especially its gold components, and feels that it is a false assumption to assume those in the technology space do not dedicate the same sense of quality to products as traditional luxury houses.
Link to Luxury Daily article here
Further commentary from New York Times on how Apple is marketing their watch as a luxury item here
Chopard Holds Dance Parties for #AreYouHappyDiamonds (article)
Link to Luxury Daily article here
TAG Heuer Smartwatch Will be Sold in Nov (article)
The Apple Watch may get younger consumers more interested in wearing watches for the first time, Biver said in an interview. Cupertino, California-based Apple is selling sport and mid-range models for $349 to $1,099, and versions in gold for $10,000 to $17,000.
“I hope they sell millions and millions and millions of them,” Biver said, speaking ahead of the official opening of a Hublot boutique in Dubai Mall. “The more they sell the more a few people will want something different and come to TAG Heuer.”
Link to Business of Fashion article here
Baselworld, Where the Watch Is The Greatest Gadget (article)
Link to New York Times's The T Style article here
-----iPROSPECT POVs & NEWS-----
Google Adwords Performance Summit: New Features for Advertisers (blog article)
In Google's third annual exclusive event, they highlighted the AdWords product roadmap for the coming year. Before the closed-door sessions during the afternoon, Jerry Dischler, Google’s VP of Product Management, presented a global livestream outlining the features, reports, and tools Google is building for advertisers in 2015 in order to deliver even more relevant messaging to consumers in the moments that matter.
Some of the highlights include expansion of vertical-specific ad units, several new back-end tools that allow advertisers to more efficiently scale their digital marketing campaigns, and a strong focus on mobile (not just targeting the mobile user with customized ads and extensions, but measuring the effect of mobile marketing through an omni-channel performance lens).
Many more details in Jeremy's blog post here
Paid Search Trends: Q1 2015 (iP POV)
iProspect’s first quarter, year-over-year (2014/2015) Google AdWords data showed strong growth for smartphones in terms of both impressions and clicks. More and more brands are beginning to see the value in mobile investment, and are therefore willing to bid more frequently and aggressively. Consistent growth across all key metrics for smartphones indicates that searchers have made the shift to mobile—and advertisers are following their audience.
When combined, smartphones and tablets now make up 30% of overall impressions and 46% of clicks. In categories like retail, consumer electronics and travel, performance on computers and tablets is down year-over-year, while smartphone performance is skyrocketing.
Link to read blog post here
Link to download POV here
Paid Social Updates: Q1 2015 (iP POV)
Highlights include Facebook/Instagram (Instagram retargeting on Facebook, Facebook Messenger for Business, spend caps, ad sequencing), Twitter (redesigned homepage) and Google+ (phase out into Google Photos & Google Stream).
Link to deck here
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