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How the web can deliver what the wealthy want
A huge disconnect exists between what luxury consumers want and what luxury marketers think consumers want, but the divide can be overcome by use of the web, says a new report from the Luxury Institute.
A huge disconnect exists between what luxury consumers want and what luxury marketers think consumers want, but the divide can be overcome by use of the web. The only trouble is--many luxury marketers don`t know it yet, says luxury marketing consulting company the Luxury Institute. "Wealthy consumers see the Internet as just another part of the relationship with a luxury provider and they expect it to be integrated as one of the channels they use," says Milton Pedraza, CEO. "But luxury marketers think the relationship has to be at the retail store. And the more high end they are, the less they think the Internet is critical to their business."
Luxury marketers` attitudes toward the Internet were part of a study the Luxury Institute just completed on consumers` and retailers` attitudes toward the ultra upscale market. Says Pedraza: "Wealthy consumers, who are among the savviest of businesspeople in their own right, are fully aware of the capabilities that firms have today to enhance customer experiences. They expect top companies to use them."
Pedraza says luxury firms should be leaders in implementing high-touch/high-tech enhancements that create a customized experience. "Most are focused on their products and channels while largely ignoring the customer experience, which is what luxury consumers are really buying," Pedraza says.
Even in such basic web-based areas as e-mail marketing, luxury marketers are behind, Pedraza says. "Few of them are at the stage of collecting e-mail addresses and getting permission to send e-mails," he says.
Pedraza says luxury marketers could do particularly well using technology to cross-sell and upsell products. And that becomes even easier, he says, when marketers can take advantage of the Internet`s flexibility and ease of use. "They`ve usually got complete product lines, they know what their customers have bought in the past and they have the relationships," he says. "What could be easier than using database marketing to trace patterns in the data and make the right offers?"
Luxury marketers have not felt a sense of urgency about harnessing the web because strong sales in the past 18 to 24 months have made them complacent, Pedraza says. The Luxury Institute`s survey was based on interviews with 200 households with a minimum annual income of $200,000 and minimum net worth of $750,000, including home equity.