Richemont Readings
north american luxury industry news curated by iProspect
Welcome to iProspect's February Newsletter
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 February, we've covered the following topics: affluent consumer research, SEA/paid search news, the influence of digital/digital strategy, the power and growth of mobile, and the latest announcements from iProspect, inclusive of reservation information about our 2015 Client Summit in Ashville, North Carolina (at The Biltmore Mansion).
Happy reading! Please let us know what you think.
Andrea
--------CONSUMER RESEARCH--------
Wealthy Americans, Especially The Upper Tier, Eschew Retail For Digital (article)
These consumers, which the study dubs hyper-affluent, favor the web, with 83% of those who purchased luxury goods in the past year doing so online. The web is also where they get ideas for purchases of luxury items, a stark departure from the hoi polloi, who continue to get ideas at retail and from family and friends.
This doesn't mean the three-percenters don't talk about their purchases. The study says that among those who have purchased luxury goods in the past year, 44% agree that “I really enjoy talking about my favorite luxury brands with others,” and 32% said they had participated in an online forum, written a blog or posted on a social media site about a brand they are passionate about. And those numbers go up as the age goes down.
“Hyper affluent” study respondents, especially younger ones, said they prefer luxury products that are “elegant and minimalist,” versus “flashy or ornate.” They say they favor authentic experiences versus anything that says “exclusive,” or tout themselves as prestigious, or are ostentatiously status-oriented. And quality of product or experience matters more than any other consideration point.
As far as advertising goes, the richer (so to speak) the media, the better. Sixty-one percent of those surveyed said video-enhanced ads help bring the brand to life, and 41% said they would probably buy more online if they could speak or video chat with a sales consultant while online.
“Affluent consumers have high expectations for luxury brands when it comes to digital marketing,” said Erik Pavelka, CEO of Martini Media, in a release on the study. “And it’s becoming more clear every day that having a strong online presence, a clear brand voice and an association with specific publishers, is a necessity.”
Link to MediaPost article with additional details here
Rushing to Cater to America's Rich (article)
Propelled by market gains and a skewed economic recovery, the United States’ share of the world’s superrich is rebounding. Since mid-2013, the number of millionaires in the United States has grown by 1.6 million, by far the biggest increase in the world and dwarfing the 90,000 Chinese who crossed the million-dollar mark since then, Credit Suisse estimates.
In 2014, Americans with net wealth of more than $50 million outnumbered their Chinese counterparts eight to one. And the United States is set to remain by far the wealthiest country, Credit Suisse says, with aggregate wealth of over $114 trillion in 2019.
Luxury retailers now see America’s ultrarich, over Hong Kong magnates or Russian moguls, as their biggest drivers of growth.
Link to full NYT article here
Canadian Tourists add to the US Economy (article & study)
U.S. retailers seeking to grow business with online shoppers across country borders should look to Canada, according to a report released in mid February from Borderfree, a market leader in international cross-border ecommerce solutions.
The report points to Canada as a top market for retailers to tap into due to Canadians’ frequent tourism to the U.S. and familiarity with U.S. stores, brands and shopping experiences. More than 23 million Canadians visit the U.S. each year, driving demand for U.S. goods, inexpensive shipping and relatively low import duties when they return home. Canada is the largest cross-border online market for U.S. retailers today presenting a healthy opportunity for international expansion.
During the holiday season, Borderfree data showed that Canadian shoppers spent on average 34 percent more daily than they did during a typical shopping day during the rest of the year, with a fivefold increase on Black Friday. Other peak shopping days included Cyber Monday and Boxing Day with women’s clothing, luxury goods and home goods selling as the top categories.
Key to successfully targeting the Canadian market is understanding its demographics and shoppers’ unique preferences. See below:
- The vast majority of shoppers are women (85 percent), at a median age of 41.7 years
- Canadians who shopped with retailers on the Borderfree platform spent an average of $136 U.S. dollars (USD) each last year
- Canadians are night owl shoppers, spending big around 5:00 – 6:00 p.m. and peaking between 11:00 p.m. and 1:00 a.m., especially on Friday nights where spending takes a major spike up at 11:00 p.m.
- 79 percent of the population uses the Internet
- Retail ecommerce sales in Canada reached $21.6 billion in 2013 and are expected to rise to $42.7 billion by 2018, an annual growth rate of 12 percent
- 45 percent of Canadian online shopping goes to U.S. and international sites (a third to the U.S.), with average annual purchasing approaching nearly $1,100 per shopper
Link to Luxury Daily article here
Link to Borderfree post here
Link to full Borderfree Canada eCommerce insights report here
The Rising Importance of Digital Media & Online Consumer Research is Changing How Brands Find Affluent Audiences (article & study)
The Internet is reshaping every aspect of luxury purchases, from consumer inspiration and research to brand sales and marketing, according to The Martini Report: The Affluent Audience Online (Vol.2: Luxury Goods). The research report was released in mid February and features insights on luxury purchases and digital behavior among affluent consumers.
Key findings include:
- Luxury purchases are heavily researched: 83% of Hyper Affluents who purchased luxury goods in the past year did online research before coming to a decision.
- Digital is the top influence: When asked where they get ideas and inspiration regarding luxury purchases, online outlets top the list. This is in stark contrast to most marketplace categories, where research shows that retail stores and recommendations from family/friends are the most widely-cited purchase influencers.
- Online luxury purchasing is widespread: 69% of Hyper Affluents are very comfortable purchasing luxury products and services online, with 55% planning to do so again in the coming year.
- Luxury inspires passion and sharing: Among Hyper Affluents who purchased luxury goods in the past year, 44% agree “I really enjoy talking about my favorite luxury brands with others,” and 32% have participated in an online forum, written a blog or posted on a social media site about a brand they are passionate about. Both of these figures are significantly higher among younger Affluents.
- Luxury continues evolving: 63% of Hyper Affluents who purchased luxury in the past year agree, “The definition of luxury is not the same as it was five years ago.” Hyper Affluents increasingly prefer luxury products that are elegant and minimalist, as opposed to flashy or ornate; they also increasingly focus on authentically rare experiences, as opposed to luxury offerings described as exclusive, prestigious or status-oriented. Quality matters above all; when undecided about what luxury product to purchase, quality is the top tie-breaker, well ahead of price, consumer reviews, or brand.
- Multimedia matters: Among Hyper Affluents who made a luxury purchase in the past year, 61% agree that videos in digital ads really help bring the brand to life, and 41% would probably buy more online if they could speak or video chat with a sales consultant while online.
Link to Martini Media article here
Link to Martini Media study highlights here (they have not yet released full study, we'll share when we have it)
------SEA / PAID SEARCH NEWS------
2015 Paid Search Trends (iProspect Quarterly Report)
Paid search in 2015 will be less about purely tactical delivery and more about high-level strategy and brand experience. How a brand performs in paid search will ultimately be shaped by the ability of digital marketers to deliver value through relevance.
In this new executive report, “Paid Search Trends: 2013/2014 Year-over-Year” Jeremy Hull, Director of Bought Media, provides an overview of the trends and corresponding opportunities relevant for brands taking a strategic, performance focused approach to paid search marketing.
The trends and insights were developed based on an analysis of data from more than 1,250 Google AdWords accounts and represent more than 135,000 active campaigns.
Link to Report here
Google Adwords Upgraded URLS (iProspect POV)
This mandatory change to landing page management in AdWords affects all Google AdWords paid search, display, and shopping (PLA) advertisers globally.
Because this change affects all AdWords users and is being rolled out on a similar timeline, it’s tempting to compare Upgraded URLs to the launch of Enhanced Campaigns two years ago. Despite some similarities, we believe the overall impact of this URL change is much smaller.
Enhanced Campaigns completely altered the way advertisers implemented bidding in AdWords, and required changes to account structure and advertiser strategy. Upgraded URLs don’t change account structure or strategy—they just require an update to the Destination URL field and a new workflow for applying tracking code to URLs moving forward.
While the initial change to this new URL format will require planning and careful implementation, the benefits of easier tracking code management and reduced landing page crawling will in the long-term outweigh the short-term hassle of yet another AdWords mandatory upgrade.
Download our POV to learn why Google is making this change and how to prepare for it. Link here.
Google to Show Tweets in Search Results (iProspect POV)
We have long seen the synergies between bought and owned media on Google, and this brings earned media into the story as well, allowing users to have an experience even more representative of the way they are consuming media in a connected world. It makes Google even more “real time” in its ability to provide information, and makes Twitter more discoverable and impactful outside of its own walls.
As always, when search results pages change their landscape, there is opportunity to capitalize on the change and acquire additional traffic. Developing an integrated strategy can leverage Twitter and the impending search results change to drive more visitors to Twitter.com.
This timely POV explores how this change affects search results, social media and organic search. It also offers actionable advice for leveraging Twitter and the impending search results changes that will drive more visitors to Twitter.com.
Link to POV here
-----DIGITAL STRATEGY-----
Fine Jewellery: Sales of the Good Stuff are Soaring as Shoppers Target Luxury at the Click of a Button (article)
Thanks to its speed, convenience and ability to browse in comfort, shopping online is almost second nature now.
Convenience is crucial, then, and trust is paramount: “Shoppers have developed a real trust in the sites they choose to buy from online,” says Jenny Cossons, head of partnerships at Lyst.com, a data-driven shopping site, with 9,000 global partner brands.
Most customers of fine jewellery are now women buying items for themselves. But, says Astley Clarke, “A lot of traditional jewellery brands are all about marketing a romantic gift purchase to men.” Of course, making the process less confusing or intimidating for men makes sense. However, she continues, “Our core target market is professional, intelligent women buying jewellery for themselves – an exciting purchase that’s going to stay with them all their life.”
Link to full article in The Independent here
How Jewelers Should Prepare for the Consumers of 2020 (article)
In five years, more than one-fourth of the population will be between the ages of 20 and 34, half of them will be women, and a growing number will be multi-racial or multi-cultural. This demographic change means that not only is the workforce changing, but the target consumer groups and the way they are shopping and being targeted by retailers is shifting.
In an education sessions held at the AGTA GemFair in early February, Kate Peterson (of Performance Concepts but for the Diamond Council of America) discussed the changes that jewelers will see over the next half-decade and what it means for their business.
Here are the trends and prediction Peterson gave for what the workforce will look like by 2020, what it means for retailers, and how they can adapt. Below is a snapshot:
2. There will be more corporate social responsibility.
3. Businesses will rely more on social technology.
4. Workplaces will become increasingly more mobile.
5. There will be a talent shortage.
6. Different kinds of mentoring will arise.
7. Employees will expect the democratization of information.
8. Personal branding will only grow.
10. They will expect “fast-laning.”
11. Non-cash payments will reign.
Link to National Jeweler full article here
Luxury Retail's Digital Moment: How Luxury Brands Are Taking Advantage of the Digital Age (study)
Key findings include:
- 92% of luxury retail respondents increased their digital marketing investment in
2014.
- 77% say increasing brand awareness is a primary goal; 60% say driving trackable
conversions is a primary goal.
- 61% used third-par ty vendors for display advertising; 31% used vendors for
multichannel initiatives.
- 59% prioritized retargeting. Additional priorities included real-time targeting
(52%), real-time optimization (44%), mobile (37%), banners (33%), and video (26%).
- In mobile, 58% of luxury retailers were satisfied with their mobile initiatives
in 2014; 63% are building a roadmap to integrate store and mobile; 82% have a
mobile optimized site.
Based on these results, 2015 is going to bring on very productive digital marketing and corresponding increased spending, using tactics throughout the entire marketing funnel from awareness to eCommerce conversions. Expectations are greatest for mobile marketing and drive-to-web store initiatives. There will be great oppor tunities for luxur y retailers to integrate display advertising with multiple other digital channels using advertising initiatives that get mobile, web, video, and social adver tising working together in real time. We also expect mobile technologies, such as geolocation, geofencing and in-store beacons, to contribute significantly to multichannel initiatives. More than ever, mobile and advertising technologies are available to help luxury retailers engage their most valuable prospects across every digital touchpoint.
Link to full Luxury Interactive study here
The Fusion of Print & Digital In the Future: Garage Magazine's Print Issue (article)
The five cover stars of Garage magazine’s latest issue — Cara Delevingne, Kendall Jenner, Joan Smalls, Lara Stone and Binx Walton — will soon release their respective covers via Instagram to a combined audience of 30 million followers. On the covers, each of the models is rendered in a way that blends the magic touch of makeup artist Pat McGrath with the technical wizardry of special effects studio The Mill, which counts Nike, Sony and Google among its clients. But the true reveal won’t happen until the physical issues hit newsstands next week. When viewed using the Garage app, each of the cover stars quite literally jumps off the page, accompanied by sound effects from Alex da Kid.
“The Garage story feels like we are sharing things,” added Knight. “The Internet is generous; it is about sharing, information, even in its aesthetic. It is breaking down the barriers between different media, music and sculpture. Charlotte’s idea of having this cross-platform story, which takes place on all these different levels, is a very good way of exemplifying that.”
Link to Business of Fashion article here
Link below to live video of animated cover (a must see). Imagine this technology with your beautiful timepieces or jewelry!
Facebook Introduces Dynamic Product Ads (iProspect POV)
With this introduction of Dynamic Product Ads, Facebook creates a massive opportunity for retailers who invest in product feed programs and social media. They will be providing consumers with advertising that is more relevant.
With FBX, consumers that shop products on participating websites or apps will see product ads appear in their news feed. However, with DPA, the increased level of targeting and content customization allows marketers to maintain control over real-time optimization across audience segments. This ensures that the advertising consumers receive from brands and merchants are more relevant to the products they are interested in purchasing.
Learn more about how this impacts marketers, the consumer and how to make the most of this exciting innovation in the social commerce space.
Link to iProspect POV here
-----MOBILE-----
Mobile Momentum (study)
Key questions addressed in this survey aim to provide answers on how to best meet customers’ evolving mobile behavior:
- How is smartphone shopping evolving for in-market consumers who shop at nearby stores?
- What are near-store and in-store shopper expectations today?
- How have shoppers adapted their smartphones as a tool to facilitate local shopping needs at the expense of, and in conjunction with, other channels and devices?
- What resources and product information aids decision-making along the path to purchase?
- What efficiencies do shoppers gravitate to in order to make smarter decisions using their smartphones?
Key Takeaways
The study confirms the value of the smartphone as a widely used tool throughout the purchase funnel, where consumers seek information in hopes of elevating their knowledge and gaining confidence in their purchase decisions. Beyond
securing this knowledge, smartphone shoppers believe it will be easier to research local purchases using their smartphones in advance. It might appear that this usage would be tied to short-term purchase needs, but in fact, shoppers report using smartphone research for long-lead, local store purchasing as well.
Lastly, the study explores the information that shoppers deem essential at various points of pre-purchase research. Price comparison, for example, is now an ingrained behavior for omni-channel shoppers where smartphone use accelerates interest early in the purchase process, as well as during store visits. The survey concludes with questions that evaluate a variety of efficiencies and time-savers in the local shopping process. Information and services that assist shoppers in securing the best price, such as total cost of the product, rose to the top of the list. Other information sources that were
also seen as essential among smartphone users are, not surprisingly: customer reviews; complete product information; store-based details; and the ability to search and sort product information. Elements that are price-sensitive, such as coupons, promotional codes and price-matching, were also deemed essential.
Link to full study here
Mobile Predictions: The Game Will Change in 2015 (article)
Mobile reached a tipping point in 2014 as it solidified its position as one of the most disruptive technologies for businesses in decades. Not since the advent of the Internet, has a technology forced businesses to rethink completely how they win, serve and retain customers. Mobile has completely shifted consumer expectations. Today, consumers expect to get anything they need immediately, in context. Forrester refers to this as the mobile mind shift.
Forrester believes that, in 2015, the gap will increase between leaders and laggards. Leaders will use mobile to transform both their customer experience and their business. They will anticipate the needs of their customers and engage them at exactly the right moment with the right content and services. Forrester refers to these moments as mobile moments. Doing so will require massive spending in the tens if not hundreds of millions of dollars to put the infrastructure, technology, processes and organization in place to engage consumers in their mobile moments.
Most companies will fall short. They have a myopic view of mobile. Why?
- Treat mobile has a squeezed down version of a PC experience or a portion of their digital strategy.
- Act like a destination.
- Rely solely on an app and website to serve consumers.
In 2015, leaders will embrace mobile to do new things. In particular, we predict that:
- Use mobile to transform their business model.
- Build an ecosystem of partners to engage consumers.
Link to fullForrester article with links to additional content here
Mobile & Luxury (L2 Insight Report)
consumers’ lives making it critical to a brand’s digital strategy.
Mobile is especially important for luxury brands, completely
trumping early predictions that digital platforms would not
impinge on the high-touch, in-store sales experience of
luxury consumers. The more affluent they are, the more
consumers are likely to own mobile devices and rely on them
for product research and purchase; this is especially true for
younger “emerging affluents”. Convenience, accessibility and
independence from sales representatives have become the
new hallmarks of “low touch luxury.”
A review of prestige Beauty, Fashion and Watches & Jewelry
investments in mobile show that while luxury brands have
increased investments, there are missed opportunities for fully
integrating mobile into the overall digital strategy. With one
out of three digital consumers using multiple devices during
product research and purchase, consistency of brand and
user experience across platforms is expected.2 Nevertheless,
many brands have a drop-off in e-commerce enablement as
well as functionality across mobile and tablet site experiences.
In addition, despite some truly exceptional mobile apps, overall
tepid user reception signals the continued need to redeploy
resources to mobile sites which have a wider reach and can
serve most of the same functions.
Link to full L2 study here
Omnichannel Trends 2015: Mobile is the New Retail Hub (eMarketer report)
Consumers don’t think about online or offline—they’re shopping. Most retailers, on the other hand, are still having trouble providing a unified shopping experience. In a survey by SPS Commerce and Retail Systems Research (RSR) published in October 2014, only 5% of businesses said they have executed most of their omnichannel strategies, while 37% haven’t even begun. Even as many retailers dawdle, consumers continue to change their shopping behaviors. They still head to stores to actually purchase, but they shop continuously on their devices. Smartphones aren’t replacing stores—they’re augmenting them. In 2015, for the first time, the majority of sales in stores will be influenced by digital media, according to Forrester Research.
The smartphone is becoming the new hub of retail. The majority of US consumers shop with their phones. In most cases, mobile is the catalyst for sales. Mobile’s growing role in shopping plays a part in many of the major omnichannel trends of 2015. This report will examine how retailers are struggling with the issues and obstacles of omnichannel practices, as well as discuss seven of the most important trends that retailers will confront in the next year.
Key Questions
- How well have retailers adapted to the omnichannel world?
- How do consumers shop with so many omnichannel options?
- Which omnichannel innovations would generate the most customer happiness?
- What are key takeaways marketers shoudl keep in mind when trying to reach consumers?
Link to eMarketer report here
Busting Mobile Shopping Myths (article)
Understanding what matters in mobile is increasingly critical as people become ever more wedded to digital devices. Perhaps it’s no wonder many retailers are scrambling to invest in digital apps, as well as other sophisticated tools and features. Yet they should stop and ask what consumers really want. Because while the perfect mobile strategy has yet to be devised, fresh McKinsey research suggests it should be based on a simple principle: providing a fast, easy, enjoyable shopping experience. Few mobile shoppers are actively looking for “bells and whistles,” such as video, expert opinions, or magazine-style articles—at least not yet. They want clean, mobile-optimized sites with easy-to-read pages that load quickly, easy-to-use shopping carts, and smooth checkouts.
Myth #1: The app is the answer.
Myth #2: The difference between good and great on mobile is 'cool' features.
Myth #3: Showrooming is a showstopper.
Myth #4: The main value of digitization is driving self-service.
Link to McKinsey article here
--RECENT iPROSPECT NEWS --
iProspect 2015 Client Summit: Registration is Now Open
This year's theme is "Redefining the Digital Relationship." Passionate experts will present content sure to inspire you to capitalize on the impact of digital rooted in a deep understanding of human behavior.
As you've heard or experienced, iProspect takes great pride in paying special attention to your experience while at our Client Summit. This year is no exception. Nestled in the Smokey Mountains, Asheville is well-known for its world-class food, burgeoning beer scene (offering 100+ local brews) and thriving artistic community. Our host hotel, the Grove Park Inn, was recently honored by Conde Naste Traveler as one of the "Top 25 Best Resorts in the South."
Will you be our guest? Summit event passes are complimentary for our clients. Register today! Link to sign up here, Client Summit portal filled with agenda and speaker details, hotel resort information and past party pictures here
iProspect Client Satisfaction Survey
• On Wednesday, February 25th, an email from Satrix Solutions, our third-party survey consultant, will be sent to all clients who have been with iProspect for more than 90 days. The email will serve to inform our clients about the upcoming survey.
• On Thursday, February 26th, clients will receive a survey e-mail (from iProspect <info@satrixsurveys.com> and the subject line will say “iProspect Client Survey”). The invitation will include a link (unique for each contact) to access and complete the survey, which should take just a few minutes.
• The survey will close on Friday, March 20th, giving you nearly three weeks to complete the survey.
Thank you in advance for your help. We are confident our unparalleled focus on service excellence will lead to even higher levels of success for iProspect and Richemont.
RECMA: 2014 Digital Agency Networks Ranking
- iProspect is #1 global digital performance agency for the first time in a 3rd party publication (RECMA)
- iProspect is also shown to be the #1 global digital media agency (RECMA)
- 'Hands down the most global digital agency' (Forrester)
To give further context, iProspect ranks 10th out of 30 in this top 'digital agencies' list, which includes the likes of Ogilvy, Wunderman, SapientNitro, RAPP, and so on. The criteria analyzed and ranked includes:
- Worldwide Staff
- Staff Growth
- Acquisitions
- Geo Coverage
- Zone Balance
- Key Markets Presence
- Customer Engagement
- Consultancy
- Technology & Production
- Search & Activation
To learn more about how RECMA analyzes and defines the top digital agencies of 2014
read here
#BeingRelevantMatters - iProspect's New Commercial
---YOUR iPROSPECT SENIOR TEAM---
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Amanda DeVincentis
Dessa Lambert
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