Hooked On A Feeling: What Drives the Luxury Consumer?

As the economy rebounds, at least for the wealthiest segments of western societies, the luxury market has revived in tandem. The Market Research Board's Outliers and Observations blog offers some useful insights into the mind of the luxury consumer and what motivates them. A couple of interesting highlights; the computer/mobile phone/tablet does not figure that significantly into their purchase process, being more tactile in their approach (marketers with budget take not); they also appear to do more research AFTER the purchase then before; emotion, not surprisingly, is a primary driver of purchase decision and choice:

"Take a look at the latest the Marketing Leadership council research into B2C purchase decisions and drivers.

To help members react to recent changes in how consumers make purchase decisions, we recently launched a 5,500-participant survey of North American and UK consumers. The study covers numerous segments – everything from small purchases to non-subscription services.

Some anecdotes seem to indicate that affluent consumers have given up on their hair shirts and that luxury as a category is back with a vengeance: The 2011 New York Fashion Week was among the most opulent ever; Porsche is experiencing double-digit sales increases, and Hermes sales are up 10%. So is there a luxury comeback? We’re not sure, but after our survey, we know a lot about what drives the luxury consumer:

Fire, ready, aim? Compared to the general population, luxury consumers do much more post-purchase research. In fact, a full 48% research after they buy compared to 28.9% of the general population. Their top reasons? To make sure they got the best price or to find out how to best use the product (each at 10%). This latter reason seems like yet another engagement opportunity to build brand loyalty.

When the going gets tough, the tough get anxious (and social). Who’d have thought handbags contain more than an ounce of angst? Consumers are afraid of getting it wrong when it comes to luxuries. 63% report being at least slightly anxious and 7% are “very” or “extremely” anxious. This figure is topped only by people buying cars (81% of whom are anxious).

This anxiousness is maybe borne out in pre-purchase chattiness: 68% of luxury consumers also spend considerable time talking to people in store – not just retail staff, but shopping companions and other consumers, too.

They appear to gain much from such interactions as well, rating conversations as “good” or “great” more than half the time (51% for sales reps, 50% for shopping companions). Social proof seems an indisputable part of the highly visible and symbolic luxury purchase.

Purchase on the small screen? Not yet. Luxury consumers tend to be more mobile savvy, as close to 70% have smartphones. However, even though an overwhelming majority knows you can research and make purchases on their mobile devices, usage remains low – 16% used it to research products while only a paltry 3% made an actual purchase. The same numbers for other consumer segments are even lower.

Hooked on a feeling. Perhaps unsurprisingly, emotions are a top driver of purchase decisions in the luxury segment. Top triggers of purchase are “I just really liked it” (26%), “I had enough money to buy it” (20%), beating more practical considerations such as “they’re running out”, “coupon going to expire” and “need to have it then for practical reasons”.

The price is generally right. Although the mean item price in our luxury dataset is an impressive $913, 50% bought without discount, plus another 5% who got a discount said they’d definitely buy, even if they had to pay full price.

Smaller consideration sets. You’d think it’s worth keeping your options open when shelling out $500, but luxury consumers have better articulated intent than ever. 26% only ever considered one product in their purchase process. 57% know what specific product they want; over half among them also had a brand in mind by the time they went shopping. Only 35% describe themselves as following the traditional funnel purchase process.