This Holiday Season Luxury Shoppers Will Take the Lead in Internet Shopping
New survey among luxury consumers finds that half bought a gift online

The internet is an extremely important shopping source for luxury consumers, ranked either their second or third favorite place to shop in 11 out of 15 luxury product categories tracked in Unity Marketing's third quarter Luxury Tracking study. Yet the internet and other non-store shopping channels account for less than ten percent of the total retail market, $233.3 billion in 2004 out of the total $2.64 trillion retail market, excluding automobiles, auto parts and food service according to the Census Department.

"For most retailers the luxury consumer segment represents their marketing 'sweet spot,' because they shop more frequently and spend more money when they shop. The same holds true for e-commerce marketers," reports Pam Danziger, president of Unity Marketing and author of Let Them Eat Cake: Marketing Luxury to the Masses - as well as the Classes. "Internet holiday gift shopping by luxury consumers' will be especially important this season, when at least half of luxury consumers are expected to buy gifts online."

Luxury consumers favor internet shopping because it is easier and more convenient

The primary reason why luxury consumers turn to the internet is that it makes shopping easier and more convenient. Fully 82 percent of luxury consumers agree with the statement, "Internet shopping has made shopping easier for me." Some 78 percent agree that the internet "lets me find exactly what I want at the right price without a lot of hassles." The three top internet shopping features luxury consumers value are ability to compare prices (73 percent say this is very important); ability to shop 24/7 (72 percent); and convenience shopping from home (71 percent).

Unity Marketing's latest survey among luxury consumers (1,171 luxury consumers with average income $142.4 k and age 42.9 years) found that virtually all (94 percent) used the internet in the third quarter for some e-commerce activity with purchasing a product online the number one use (73 percent made an online purchase). A majority (54 percent) made travel reservations online and 50 percent purchased a gift in the third quarter.

Other findings in the survey about luxury consumers' use of the internet include:

• Internet marketing supports cross-channel marketing efforts - A pattern of cross-channel shopping was found among luxury consumers. For example, 43 percent researched an item online then went to the store to make the actual purchase. About one-third (35 percent) saw an item in the store then ordered it online. Some 20 percent saw an item in the store then went home and ordered it over the internet, while an equal percentage (20 percent) researched an item online then called the company directly to make the purchase.
  
• Luxury consumers spent on average 5 hours internet shopping each week - Out of a total of 18.4 hours spent on the internet in a typical week, the luxury consumers spent 5.2 hours in shopping-related activities.
  
• Comparison shopping for the best price is vital use of internet - Despite the fact that luxury consumers have plenty of money and can afford to pay full-price, they are aggressive bargain shoppers. Over two-thirds (67 percent) use the internet to comparison shop for the best prices. The ability to compare prices is also the feature of the internet they rank as the most important reason why they use the internet for shopping.

3Q 2005 Luxury Consumer Tracking Study Focuses on Luxury Home

Unity Marketing's Luxury Consumer Tracking Study for the third quarter 2005 focused on the luxury consumers' use of the internet for shopping. Data about their use of the internet, what they buy, how much they spend online, the internet features they value most and those that discourage them in their internet shopping are also included.

In addition to the internet shopping data and luxury consumer confidence insights included in the luxury tracking survey, detail purchase information is collected on these categories of luxury:

Home Luxuries:

• Art, Wall Décor & Antiques
• Electronics and Photography, such as computers, televisions, home entertainment centers, cameras, PDAs, etc.
• Home Decorating Fabrics, Window & Wall Coverings
• Furniture, Lighting and Lamps, and/or Floor Coverings, including rugs
• Outdoor, Lawn, Patio & Garden Products, such as lawn furniture, patio accessories, plants, grills, etc.
• Kitchenware, Cookware & Housewares
• Kitchen Appliances and Bath & Building Products, such as cabinets, bathtubs, etc. for home remodeling
• Linens & Bedding
• Tabletop, Dinnerware, Flatware, Servingware, Decorative Accents

Personal Luxuries:

• Automobiles and/or recreational vehicles, such as boats, RVs, etc.
• Clothes & Fashion Apparel
• Fashion Accessories, such as handbags, wallets, suitcases, shoes, etc.
• Fragrance, Cosmetics and/or Beauty Products and Skin Care regimes
• Jewelry
• Watches
• Pet Products
• Wine & Spirits

Experiential and Luxury Services:

• Travel and vacations
• Dining and restaurants
• Entertainment
• Personal and health services, such as beauty treatments, spa, massage and cosmetic procedures, health club, country club, etc.;
• Home services, such as landscape, housecleaning, home remodeling, home decorating, party planning and catering, etc.

Unity's luxury sample includes 1,172 affluent consumers, tracked in three segments (17 percent near-affluents: $75,000-$99,999; 54 percent affluents: $100,000-$149,999; and 29 percent super-affluents: $150,000 and above) with the average income of $142.4k and age 42.6 years.

This is a semi-custom research service with subscribers adding specific product categories and their brands and the brands of five key competitors to the survey. In addition, subscribers can add up to six personal questions to the survey through the year. See more information about subscribing to Unity Marketing's Luxury Tracking Study, or call Pam Danziger at 717-336-1600.

Unity Marketing publishes its Luxury Tracking Study quarterly with the next due in January 2006. For more information, visit http://www.unitymarketingonline.com/reports2/luxury/luxury3.html or call Pam Danziger at 717-336-1600.

About Pam Danziger and Unity Marketing

Pamela N. Danziger is a nationally recognized expert specializing in consumer insights for luxury marketers, whether they sell luxury to the masses or the 'classes.' She is president of Unity Marketing, a marketing consulting firm she founded in 1992.

Advising such clients as Lenox, Cartier, Herend, Rémy Amerique, Stearns & Foster, Prudential Fine Homes, Baccarat, The World Gold Council, The Conference Board and American Express, Danziger taps consumer psychology to help clients navigate and master the changing luxury marketplace. Her latest book, Let Them Eat Cake: Marketing Luxury to the Masses-as well as the Classes, (Dearborn Trade Publishing, $27, hardcover) is in book stores now. She is the author of the recent book, Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior (Chicago: Dearborn Trade Publishing, 2004).

She has appeared on CNN's In the Money, NBC's Today Show, CNBC, CNN International, CNNfn, CBS News Sunday Morning, Fox News' Your World with Neil Cavuto, ABC News Now, NPR's Marketplace and is frequently called upon by the Wall Street Journal, New York Times, American Demographics, Women's Wear Daily, Forbes, USA Today, Associated Press, Los Angeles Times, Chicago Tribune for commentary and insight.

For media, Unity Marketing can make tables, charts and graphs available about the luxury market upon request. Contact: Pam Danziger, 717-336-1600

Special Added-Value Service Just for Luxury Magazine Publishers

Publishers can tap into the power of Unity Marketing’s Luxury Tracking Study through a special publishers’ program. Designed around the needs of publishers that serve luxury advertisers, every quarter publishers receive a report summarizing luxury consumers’ purchase activity in the previous quarter, along with the luxury brands they bought and the luxury publications they read. Unity Marketing will provide a summary report of the key findings suitable for magazines to share with their top advertising clients.

For example, House & Garden, Travel & Leisure, Bon Appetit, Food & Wine, Real Simple and Oprah are the top magazines in the second quarter according to luxury consumers.

Publishers who subscribe to the Luxury Tracking Study can add key product categories to the survey and 10-to-12 major luxury brands. They can also submit both their major publications and key competitors' titles to the magazine readership portion of the tracking survey. See more information on Luxury Tracking for Publishers.

Unity Marketing publishes its Luxury Tracking Study quarterly with the next due in September 2005. For more information, visit http://www.unitymarketingonline.com/reports2/luxury/luxury3.html or call Pam Danziger at 717-336-1600.

September, 2005 (About 100 pages)

Published Price: $2,500

(Please Note: With the purchase of this report, subscribers may apply subscription fee for 2Q2005 report to annual Luxury Tracking subscription)

Major Findings

More Information

Luxury Consumption Index

Table of Contents

Luxury Tracking 2005 Survey, Methodology & Questionnaire

Luxury Brands Listing

To subscribe to the Luxury Tracking Consumer Survey, please call Pam at 717-336-1600.

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