5 Insights into How Shoppers Research & Buy Luxury Products
How much is technology changing the purchase journey for luxury goods? What influence are tablets having? What about smartphones? And what proportion of shoppers still want to see and feel luxury goods 'in the flesh' before making a purchase? These questions have been tackled in a new global study just released by Google and Ipsos.Before we delve into the findings, a quick note on methodology. The research sample was defined by 2 criteria - people who had made at least 2 luxury purchases in the last 2 years in either the Apparel/Accessories or the Jewellery/Watches sectors, and had a household income of £85,000 or above (or equivalent if we're talking about a non-UK market).Although shoppers in 9 countries were surveyed, the results aren't presented on a country by country basis, but instead grouped into 3 broad markets - New markets (China, Brazil, Russia), Mature markets (France, UK, US, Italy, Germany) and Japan. This lends a degree of homogeneity to the results that makes them less insightful, particularly when it comes to the UK, but there are still some interesting observations nonetheless, so read on.1. Luxury Purchasers Skew old in Mature Markets but Younger in New MarketsIt will come as no surprise to you that the average age of luxury shoppers in Mature markets is 46 and in Japan is 49. In the former, the weighting is 50/50 male female and in the latter more heavily slanted towards males (64/36).However in New markets luxury shoppers are much younger - averaging just 37 - and are much more likely to be female (56% vs. 44% male.)2. The Vast Majority of Luxury Purchases Still Happen OfflineNo matter which market you look at, over 80% of luxury product purchases still happen offline. New markets saw the highest rate of online purchasing (18%), followed by Mature markets (13%) and Japan (9%).The main drivers of online purchasing were convenience (cited by 53% of the sample), the ability to buy anywhere/anytime (49%) and good deals (48%). The main barriers were a preference to see/touch (65%) and the risk of buying counterfeits (35%).3. Most Shoppers Conduct Online Research Prior to PurchasingThree quarters of the sample conducted online research prior to purchase including 92% of shoppers in New markets, 69% of shoppers in Mature markets and 49% of shoppers in Japan.In terms of device usage, most of that research happened on a computer but other devices featured prominently. So those in New markets were most likely to use smartphones (55%) and tablets (33%) to conduct online research. For Mature markets, tablet usage was similar (27%) although smartphone usage for research was nowhere near as high (25%). Both smartphone and tablet usage for research were low in Japan (9% and 7% respectively).4. Search Remains the Dominant Online ChannelAmongst all 3 markets, search represents the most popular channel to conduct online research, followed by looking up info on a website/app. After these first 2, the most influential channels differed by market.So in New markets, the no. 3 activity was looking on a social network or watching an online video, followed by reading professional articles/reviews online, reading consumer reviews or blogs/forums online and noticing/clicking on online advertising.In Mature markets, social networking and online video were less influential, being headed by reading professional articles/reviews and reading consumer reviews and blogs/forums.5. Online Advertising is More Influential Than TV and RadioWhen comparing online with offline research channels, it's interesting to note that online advertising was cited by more than mentioned TV and radio advertising. Looking at Mature markets specifically, 16% mentioned seeing/clicking on an online ad compared to 9% who mentioned seeing a TV ad and 4% who mentioned a radio ad. Online ads were as influential as outdoor, cinema and SMS promotion as these sources were also cited by 16% of those in Mature markets.However, online ads were less influential than newspaper/magazine ads (16% vs. 24%) and offline PR (vs. 44%) in Mature markets. But in New markets they outperformed outdoor, cinema and SMS (49% vs. 37%) and newspaper/magazine ads (vs. 41%) and were only bested by offline PR (vs. 73%).The most popular online ad formats across all of the sample were video (45%) and full screen (42%).The conclusions from this research? Well, the thing that struck us was that despite the popularity of online channels for research, and high levels of mobile device ownership, most luxury shoppers still purchase offline and still want to see and touch the product prior to purchase. Whether increasing use of video and/or new technologies such as augmented reality, allowing consumers to virtually try on products, can ever replace this need is uncertain but the most fruitful current strategy for online is to help consumers make that offline purchase.In terms of channels to drive luxury consumers to purchase, marketers in all markets should be focusing on search, which was the dominant research channel in all markets. In New markets, marketers will find social media/online video, online PR and online advertising will yield returns. In Mature markets, offline tools such as PR and press and magazine ads are still highly influential so marketers will need to employ a greater blend of online and offline tools.