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University of Arkansas, Fayetteville
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Marketing Undergraduate Honors Theses
Marketing
5-2016
Evaluating the Perception of Luxury Brands in
Today's Marketplace and the Impact of the Digital
Age on these Brands
Mary M. Turner
University of Arkansas, Fayetteville
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Recommended Citation
Turner, Mary M., "Evaluating the Perception of Luxury Brands in Today's Marketplace and the Impact of the Digital Age on these
Brands" (2016). Marketing Undergraduate Honors Theses. 27.
http://scholarworks.uark.edu/mktguht/27
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EvaluatingthePerceptionofLuxuryBrandsinToday’s
MarketplaceandtheImpactoftheDigitalAgeontheseBrands
Anhonorsthesissubmittedinpartialfulfillmentoftherequirementsforthedegree
BachelorofScienceinBusinessAdministration
By
MaryMarjorieTurner
SamM.WaltonHonorsCollegeofBusiness
Fayetteville,Arkansas
Marketing,2016
May2016
UniversityofArkansas
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Abstract
“Inspiteoftheglobalrecession,luxuryseemstobeeverywhere.Luxuryisatermthatis
routinelyusedinoureverydaylife:apromiseofdecadenceandadreamofanexclusive
lifestyle,akeycomponentofmarketingmanagementandataglineincommercialsand
advertisingcampaigns…However,whatdoesluxuryreallymean?Theonlyconsensuson
themeaningofluxuryisthatthereislittleconsensus”(Hennigsetal.3).Foranindustry
thatoncepresenteditselfassoexclusiveanddefinitive,itishardtobelievethereis
suchuncertaintyindefiningthismarket.Muchofthisambiguitycanbecontributedto
theimpactofglobalizationandconglomerationthatpreviouslyimpactedtheeconomy,
aswellastrendsinbrandandproductextensions.Regardlessofhoworwhythis
industryevolved,adefinitiveconsensuscanbemadethattheluxurybrandindustryis
differentthanitoncewas.However,asonecanimagine,theunderstandingof
consumers’perceptionsregardingluxurybrandsiskeyforcreatingappropriate
strategies.Consumers’varyingperceptionstowardsluxurybrandscreatesmany
questionsinregardstowhattraitortraitsreallydefineabrandas“luxury”.Isitthe
price,thequality,thebrand’shistoryorsomeotherindicatorthatidentifiesabrandasa
luxuriousonetoconsumers?Furthermore,theretendstobehypocrisyinconsumers’
perceptionstowardsluxurybrands.Inregardstoconsumers’attitudestowardsthe
conceptofluxury,TheJournalofBusiness&EconomicsResearchclaims“theyare
ambivalentacrossandwithinconsumers,asconsumerbehaviorisinconsistentwithselfreportedattitudes,asconsumerscan’tunderstandtheirowncontradictions”
(Stegemann61).Inadditiontomarketers’struggletounderstandwhatconsumers
perceiveasaluxurybrand,theimpactoftechnologyandthedigitalagehasonly
enhancedthesubjectmatter.Luxurybrandsthatoncepridedthemselvesonpremier
customerserviceandprovidingasortof“white–glove”experiencefortheircustomers,
mustbeflexibleandacceptingintheirmarketingstrategiesorfacethefearof
abandonment.Theconsumeroftoday’sworldnotonlyviewsluxurybrandsdifferently
butalsoshopsdifferently.Instantgratificationisaconceptthathasbecomeprevalentin
consumersbuyinghabitsandmustbenotedbymarketers.AstheEuropeanFinancial
Reviewrecognizes“Luxuryiseverywhere”,andthefactofthematteristhatthese
luxurybrandsmustcometotermswithtoday’sworldofE-commerce(Hennigs2).Itis
necessarytounderstandhowconsumersviewluxurybrandsaswellastheirroutine
purchasehabits,becausetheseperceptionsandpreferenceswillbeessentialin
establishingmarketingstrategiesthatensureloyalcustomers.
Thishonorsthesisisapprovedforrecommendation.
FacultyAdvisor:
SecondReader:
JohnW.Cole Dr.MollyRapert
Instructor
AssociateProfessor
DepartmentofMarketing DepartmentofMarketing **signature**
**signature**
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Acknowledgements
IwishtoacknowledgethefacultyandstaffoftheUniversityofArkansas.Inaddition,I
wouldalsoliketogratefullyextendmyappreciationtothefacultyandstaffofthe
respectedSamM.WaltonCollegeofBusiness.Itisthroughtheirdedicationand
commitmenttoteachingthatIhavebeenabletoexcelacademicallythesepast4years.
Inparticular,Iwouldliketoexpressmysinceregratitudetomythesisdirector,John
Cole,aswellasmyaccompanyingadvisor,Dr.MollyRapert.Theyhaveofferedtheir
valuablesuggestionsandconstructiveguidancethroughoutthisprocess.Notonlyhave
theysupportedmeinthisendeavor,butalsotheirleadershipstylesandsincerepassion
towardsteachinghaveinfluencedmemorethantheywilleverknow.Theydisplaya
truecompassionfortheircareersandtheirapproachablenaturehasimpactedme
indefinitely.Iamgenuinelythankfulfortheirsupportandencouragement,andstrongly
believethattheyhavecontributedtomysuccessatthisuniversity.
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Introduction
Luxurybrandsundoubtedlyplayapivotalroleintoday’smarketplace,andthe
marketingstrategiesforthesebrandsarecontinuouslychangingwiththegrowthof
technology.Althoughitisimperativethatthesebrandsareflexibleintheirways,the
constantadaptationsbroughtonbythedigitalagehavemanybrandsquestioningthe
appropriateapproach.Familynamesandlonghistoriesareassociatedwithmanyof
thesebrands,whichhasthemfacingthefearthatevolvingstrategiescouldpossibly
degradethevalueoftheirbrandnames.However,thesechangesareinevitabledueto
thenatureoftoday’sconsumer.Theconsumeroftoday’sworldisnotthesame
consumerthatexistedwhenmanyofthesebrandnamesevolved.This“newconsumer”
livesinaworldwhereinformationisaccessiblewiththetouchofabuttonand
exceptionalcustomerservicecanhavevariousmeanings.Whenevaluatingthe
perceptionofluxurybrandsandtheimpactofthedigitalageonthem,itisnecessaryto
examinethetruemeaningofa“luxurybrand”.Theperceptionofluxurybrandswidely
variesdependingontherespondentandhasbeenextensivelyresearched.
TheJournalofBusiness&EconomicsResearchgoesasfarastosaythat“theconceptof
luxuryiscomplex,asitissubjectiveandprimarilybuiltonconsumerperceptions,asthe
meaningofluxuryisdeterminedbypersonalandinterpersonalmotives”(Stegemann
59).Therefore,theelusivedefinitionofluxurybrandscreatesaninterestingscenarioto
explore;whilesomeconsumersviewtheworldofluxuryproductsasonethatdemands
respectforthequality,time,andaestheticsinvolved,othersviewthisworldasexcessive
andimplausible.Furthermore,theuncertaintyassociatedwiththedefinitionofaluxury
brandscreatesanargumentforhypocrisyandconfusion.Forexample,thegeneral
populationmighthearthename“RollsRoyce”or“Gucci”andimmediatelythink
negativelyaboutthosebrandsorthepeoplethatwillspendmoneyonthoseproducts,
butisthatassumptionfairwhenapproximately“1in4adultAmericansownaniPhone”
(Elmer-DeWitt1).Whyisitthatsomebrandsnamesconnatethisnegativeattitudefrom
consumersyetowninga$600mobiledeviceiscompletelyjustifiable?Throughample
researchanddatacollection,Iwanttodiscoverwhatpeopledefinealuxurybrandas
andwhyperceptionsdiffersodrastically.Isitindicatorssuchasthepriceoftheproduct,
thehistoryofthebrand,ortheexclusivityofbeingcapabletopurchasetheitemthat
leadconsumerstoidentifyabrandasluxurious?Furthermore,Iwanttodiscoverhow
technologyande-commercehascreatedadifferenttypeofconsumer,andhow
marketersmustbeabletoquicklyadaptinordertoensurefinancialstability.The
purposeofmyresearchis(1)tobetterunderstandtheperceptionofluxurybrandsin
today’smarketplace,(2)toanalyzetheluxuryconsumeroftoday’sdigitalworldandthe
changeinconsumerbehavior,(3)andtoanalyzetheflexibilitythatisimperativefor
luxurybrandstoacceptregardingfutureappropriatemarketingstrategies.Thisanalysis
canbeusedtorecognizetheoverallroleofluxurybrandsintodays’digitaleraandhow
understandingthecurrentconsumerisnecessarytodeterminetheaccuratemarketing
strategiesforthesebrands.
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Theme1:ThePerceptionofLuxuryBrandsinToday’sMarket
Uponreviewingcreditedonlinesourcesandpublishedliterature,Icollectedavast
amountofinformationfromavarietyofsourcesinordertodetermineluxurybrands
overallroleinthemarketplace.Whendoingso,Ideterminedthatitwasalsonecessary
toelaborateontheambiguityassociatedwiththeworldofluxurybrandsandthe
differentconnotationsassociatedwiththeconcept.
Theworldofluxurybrandsisnotsomethingnew;infact,manyluxurybrandshavebeen
aroundforover100yearsandembodyFrenchrootsandalonglineoffamilytradition.
Theluxuryindustrywasestablished“withitsfocusonartandaesthetics”butdrastically
changedduetotheeffectsofglobalizationandmarketconditions(Stegemann59).In
ordertocompletelyunderstandtheindustry,thewordluxurymustbeevaluated.“The
originoftheworldluxuryisderivedfromtheLatinwords“luxus”and“luxuria”.
Accordingtodictionaries,luxurycompareswithextravagance,opulenceandrankness.
Thewordluxuryshouldhaveapositivevalueofsplendortoit.However,ittakesonthe
negativemeaningofdecadencewhenusedinassociationwith‘private’and‘excess’,
andputintoasocialcontext”(Stegemann59).Itisevidentthatpriceandexclusivityare
commonlyassociatedwithluxurygoods,whichtendstoresultintheautomaticcreation
ofspecificgroups,thosewiththeproductandthosewithout.Itistheneasytoseewhy
manyluxurybrandsacquirethisnegativeappearancebyyouraverageconsumerwhois
unabletopurchasetheseproducts.
However,inmyinitialresearch,Ibegantoquestiononwhatbasisconsumerscriticize
certainluxurybrandsandnotothersandnoticedsomehypocrisythroughoutthe
differentsources.Idobelievesomeofthisnegativityanduncertaintyresultsfromthe
factthat“bytradition,individualsconsumeluxurygoodsbecauseoftheirdesireto
differentiatethemselves”(Stegemann60).Inanearliertimeperiod,socialclasseswere
separatedanddefinedbywhatluxuryproductstheycouldownorconsume.Yet,Ithink
itisimportanttounderstandthat“inthe80s,luxurygoodsthatusedtobelongtothe
upperclassbecamevisible,recognizable,andaccessibletothepublic(Stegemann60).
Theluxurygoodsindustryhadsignificantgrowthandtheentireclienteleexpanded.
Withthisgrowth,the“newconsumersopposedthetraditionalostentatious
consumptionofluxurybrands,andweremoreoccasionalandselective,andcarefully
evaluatethevalueofabrand”(Stegemann60).Thisnewclienteleandexpansionnot
onlychangedtheluxurymarketfromthebusinesssideofthings,butitalsocreated
somewhatofa“greyarea”fordefiningluxuryproducts.Manyconsumersseetheluxury
marketinsuchanegativelight,butthecontinuousgrowthofthismarketiswherethe
focusshouldlie.
Itisnodoubtthattheluxurybrandindustryoncerepresentedanexclusiveclientele,but
Ithinktheiroverallpresenceintoday’smarketplaceisnoteworthy.Furthermore,I
believethatconsumersshouldnotonlyappreciateanygrowththatpositivelyimpacts
theeconomy,butIalsobelievetheyshouldevaluatetheirbuyinghabitsbeforemaking
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negativeassumptionsaboutluxurybrands.OnceagainIwillmakeacasewhereI
questionwhyitisacceptableforamaletopurchasea$300signedfootballjersey,buta
female’spurchaseofarecognizeddesigner,sayaPradabagisignorant.Isn’tthefemale
goingtogetdailyuseoutofthepursebutreallyhowoftencanthemalewherehis
footballjersey?Peopleshouldfocustheirattentiononthe“unprecedentedgrowthof
theluxurysectorfromavalueofUS$20billionin1985toitscurrent$180billionworth”
andwhatthismeansforthefuture(Okonkwo287).Peoplecanholdnegativeopinions
aboutluxurybrandsandtheirconsumers,butclearlythisindustryisnotgoinganywhere
andisn’tanyeconomicalgrowthapositiveimpact?GranbyMarketingstatesthat
“luxurybrandsareknownfortheirquality,serviceandstylewithproducts”but
regardlessofthemanytextbookdefinitions,Ifoundmyselfcontinuallyrecognizing
uncertaintyamongsourceswhendefiningabrandasluxuriousornot(Granby
Marketing).Furthermore,Ibelievethattoproperlymarkettotoday’sconsumer,
understandingiftheconsumerperceivesyourproductasluxuriousornotisessential.
Withthebeforementioneddiscussionasmotivation,IdecidedthatIwouldconductmy
ownresearchandtrytogathercollege-agedstudentsperceptionsonluxurybrands.The
college-ageddemographic,mostlyconsistingofmillennials,havenotonlygrownupin
thedigitalagewhereinformationisavailablewithinseconds,buttheyarealso
approachingthejobworldandholdagreatdealofpurchasingpower.
Theme2:TheLuxuryConsumerofToday’sDigitalWorld
Whenevaluatingtheroleofluxurybrandsintoday’smarketplace,theimpactofthe
digitalageandtechnologyisparamount.ItissafetosaythattechnologyandEcommercehaschangedalmosteverybusinessindustry,buttheeffectoftheseonthe
worldofluxurybrandshasbeenveryunique.Consumerbehaviorhaschanged
drastically,withtheaverageshopperbecomingmoretechnologicallycapableandtime
beingofupmostimportance.McKinseyGroupgoesasfarastosaythat“threeoutof
fourluxuryshoppersownasmartphoneandabouthalfownatablet”(Dauriz,Remy,
andSandri).However,forthelongesttimeintheworldofluxurybrands,theshopping
experiencehasalwaysbeenthekeyinestablishingcustomersatisfactionandretention.
“Itusedtobethataluxurybuyingexperienceinvolveddressingupandgoingintoa
high-endboutiquetoconsultwithasalespersononwhattobuyandenjoyingaglassof
champagnewhileitwasbeingcarefullywrappedupforyou”(Adams).Althoughthis
luxurybuyingexperiencehasnotcompletelyvanished,ithasdefinitelyevolvedandis
rarelythesinglesourceforthepurchasedecision.
Anotherkeyelementtorecognizeintoday’sfast-pacedworldisthat“peoplewithlarge
amountsofdisposableincomeoftenhavelowamountsofdisposabletime.Beingable
toshopontheirscheduleandontheirterms(possiblyintheirunderwear)[turns]outto
bemoreappealingthanhavingtoleaveone’shomeorofficetobuysomething”
(Adams).Luxurybrandsoncebuilttheirentiremarketingstrategyonproviding
exceptionalcustomerserviceandasuperbshoppingexperience;manytimesthese
aspectswereasimportanttoconsumersastheproducttheywereselling.Althoughthe
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digitalagehasimpactedconsumersineveryindustry,thestrugglearisesbecauseofthe
longtraditionofserviceassociatedwiththeluxurymarket.Formanyyears“the
pervasivebeliefwasthatluxuryshoppers,withtheirdiscriminatingtasteandpreference
forhigh-pricedgoods,wouldn’tbuyexpensivethingsonline;theywouldalwaysoptfor
thepersonalizedcustomerserviceandtactileshoppingexperiencethatmonobrand
brick-and-mortarstoresprovide”(Dauriz,Remy,andSandri).However,thisbeliefhas
changedandtechnologyhasnotonlycreatedanewwaytopurchaseluxurygoodsfor
consumers,butithasalsobecomeasignificantsourceofinformationforconsumers.
TheMcKinseyCompanyelaboratesonthisbyexplaining,“E-commerceisonlyone
aspectofthedigitalopportunity.Ourresearchfoundthat40percentofluxury
purchasesareinsomewayinfluencedbyconsumers’digitalexperience-forexample,
throughonlineresearchofanitemthatissubsequentlyboughtoffline,orsocial-media
“buzz”thatleadstoanin-storepurchase”(Dauriz,Remy,andSandri).Thisstatistic
aloneportrayshowtheconsumeroftoday’sworldistechsavvyandinformationdriven
andtheprioritiesthatonceweresoimportanttotheluxuryconsumerhaveshifted.
Furthermore,animportantaspectoftheluxuryconsumertomentionisthecommon
misidentificationthatisassociatedwiththistargetedgroup.Thisphenomenonfurther
strengthensmypointabouttheelusivenessofthewordluxuryandshowsthe
significanceofunderstandingtheluxuryconsumeroftoday’sworld.GranbyMarketing
elaboratesbysaying,“Askalmostanyonetodescribewhattheybelievetobealuxury
consumerandtheywillprobablysayamiddle-agedaffluentfemalewithalargenet
worth-wrong!Infact,itsthismisidentificationfromluxurybrandsthatcoststhe50%of
theirtopcustomersannually”(GranbyMarketing).Manyluxurybrandstargetthis“true
luxe”customerwhoonlypurchasesluxurybrandswithoutregardstoprice;“however,
therealityis,luxurybrandsarekept-a-floatby‘Momentsofwealth’customerswhosave
toaffordspecificitemsand‘dressedforthepart’consumerswhopurchaseluxuryitems
tomaintaintheappearanceofsomeonewholivesaluxurylifestylebutcannotbea
‘Trueluxe’consumer(GranbyMarketing).Itisimperativethatluxurybrandsunderstand
theircustomerbaseanddonottakeforgrantedthese“momentofwealth”or“dressed
forthepart”customers.
Inaddition,thetechnologyoftodaymakesitincreasinglyeasyforcompetitionto
outperformoneanother.Thisreasoniswhytheserviceofferedbyluxurybrandsisstill
extremelyrelevant;thewayexceptionalserviceisprovidedmighthavechanged,
nonethelessitisstillofupmostimportance.JazFrederickelaboratesonjusthowthe
meaningofservicehasshifted;“Insteadofdrivingtoaphysicalstore,luxuryshoppers
enjoytheconvenienceofhavinganitemdeliveredtotheirdoorstepwithinafewshort
businessdays.Additionally,purchasingfromauthenticbrandsitesgivesshopperpeace
ofmindknowingthey’rebuyinglegitimateitemsfromthebranditselfwithouthavingto
worryaboutreceivingcounterfeitgoods.(Frederick).Thisfindingshowstherelevanceof
understandingconsumers’perceptionsofwhatqualityserviceisintoday’sage.Inmy
ownresearch,Iwanttounderstandthetopservicequalitiesthatconsumer’slookforin
e-commercepurchases,andIwanttodiscovertheirroutinepathtopurchase.Ibelieve
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thatcollege-agedemographicswillproveextremelyrelevant;Granbymarketing
strengthensthisbystatingthat“thedigitalizationofluxuryisrapidlyevolvingas
millennialsandyoungerconsumerbecomemoreaffluent;andwithmillennials
accountingforapredicted30%ofretailsalesin2020.Therefore,thedigitalexperience
shouldnotbeover-lookedastheyoungerconsumergroupscontinuetoseek
technology-drivenproductsandexperienceswhichrequiresluxuryretailerstodeliver
consistent,personalized,high-engagementinteractionsateverytouchpointonthe
customerjourney”(GranbyMarketing).
Settingthefoundationofmyresearchwithunderstandingtheperceptionofluxury
brandsintoday’smarketplaceandcontinuingbylookingathowtechnologyhas
impactedtheluxuryconsumerandtheirpathtopurchase,Isoughttounderstandwhat
thismeansforcreatingtheappropriatemarketingstrategiesforluxurybrandsinthe
future.
Theme3:StrategicFlexibilityinMarketingLuxuryBrands
Inaccordancetomydelineationofluxurybrand’sstrongpresenceintoday’s
marketplaceandthedigitalage’ssignificanteffectsonconsumers,Inowwantto
examinewhatthismeansforluxurybrandswhendevisingappropriatemarketing
strategiesforthefuture.Aspreviouslymentioned,theluxurybrandmarkethas
experiencedremarkablegrowthandresearchersdonotseethegrowthhalting.
However,Ifinditinterestingthatmanyluxurybrandsarestillhesitantintheir
acceptanceofastrongonlinepresence.PFSWebacknowledges,“eventhoughthe
demographicofaffluentfamiliescontinuestogrowworldwide,theworld’stopluxury
brandsonlyprovideE-commercesitestoapproximately45%ofleadingmarkets”
(Frederick).Thishesitantacceptancecanbeexplainedbythefactthat“somebrands
fearthatanonlinestorewouldtarnishtheirexclusivebrandimage,makingthemless
“luxurious”toshoppers,orgreatlytakeawayfromin-storesalesandvaluedpersonal
service”(Frederick).AlthoughIunderstandthereasoning,itisnowthatImakean
argumentthatluxurybrandsmustbeflexibleintheiracceptanceofthedigitalageand
understandthattheyarenotonlydealingwithdifferentclientelebutalsotechsavvy
consumers.Withoutbeingabletoadjusttotheimpactofthedigitalage,luxurybrands
willsuffergreatly.TimAndersonfromTheGuardianstatesitdirectandtothepoint,
“Theriseofdigitalmarketingischangingthewayluxurybrandsengagewithcustomers,
andtraditionalcompaniesmustembracewhatisnowpossibleintoday’sconnectedand
mobileworldorbeleftbehind”(Anderson).TheJournalofBusinessandEconomics
explainsthat“Foryearstheluxurygoodsindustryenjoyeditsexclusivepositioninthe
marketandafairlystablemarketenvironment.Howeversupplyanddemandpatterns
forthemarketforluxurybrandshavechangedconsiderablyduetoincreased
competitionandcounterfeitedluxurygoods”(Stegemann59).Asmentionedbythese
creditedsources,theexpansionofluxurybrandsintoglobalmarketsandthedigital
createdanunavoidablechangeforthisindustry;Ibelievethatacceptanceofthisnew
eraiskeyforthelongevityofluxurybrands.
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Inadditiontopreviouslymentionedfearsregardingreducedserviceandatarnished
brandnameuponacceptanceofthedigitalera,discussionhasaroseaboutthe
substantialamountofmoneyinvolved.TimAndersonfromTheGuardianelaborateson
someofthequestionsthatarosewhenanaudiencewasinvitedtojoinindustryexperts
“todebatetherisksandcreativeopportunitiesforluxurybrandsenabledbydigital
technology”(Anderson).Anumberofaudiencememberscontinuedtoquestionwhy
theyshouldinvestindigitaladvertisingwhenthe“thereturnoninvestment(ROI)isnot
asbigwithdigital?”Thepanelrespondedbystating“Youshouldlookatreturnon
interactionratherthanreturnoninvestment”.Furthermore,“oneofthebenefitsof
digitalmediaisthatitgeneratesdata,enablinganalyticsthatwerepreviously
impossible.Itismoremeasurablethananyotherformofmediawedo,anditisnotjust
abouthugereachnumbers,itisaboutcreatingengagement,understandingour
customers’journeyandthendeliveringrelevantcontentalongtheway”(Anderson).
ThisstatementcompletelyconfirmsmystrongfeelingsandpointthatIamtryingto
prove.Thereisnothingluxurybrandscandotochangethedigitalworldoftodayor
consumersbehaviors;therefore,theymustacceptthenewwaysandfindwhatstrategy
worksbestforthem.AlthoughIunderstandthatitisnecessaryforbrandstounderstand
thefinancialconsequencesofsuchastrongdigitalpresence,theconsumersthatthey
needtofocustheireffortsonarethosewhohavegrownupinthisdigitalera.
Furthermore,Ibelievemyresearchwillhelpstrengthenwhatthesecreditedsources
havestatedaboutthereturnoninteractionbeingtheimportantelementtofocuson.
Surveyresponsesfrommillennialsareidealforensuringtrustworthyanswersregarding
shoppinghabitsandmarketingtacticsofthefuture.
Furthermore,Iwantedtoextendtherelevanceofthisissuebyprovidingstatisticsand
acknowledgingsomebrandsthathavealreadyseenthebenefitsofacceptingthenew
digitalways.Avarietyofsourceshavemadeclaimsaboutthevalueofunderstandthe
luxurysector,statingcommentssuchas“Inall,mostforecastpointstoagloballuxury
megamarketjustwaitingtobetappedinto”and“Digitalspendinginluxuryhasreached
historiclevels,thecorequestioniswhetherbrandsaregettingthebestoutofit”
(Frederick;Angelic).AlthoughIunderstandluxurybrandsfearsofcompromisingtheir
corevalues,Ibelievetheimportantaspectforthesebrandstofocusonisthatthereis
hugegrowthintheirindustryandproperlyconnectingwiththeirconsumersisofpivotal
importance.AForbesarticledescribesanoteworthyexampleofTheGucci’sbrand
understandingandacceptingtheimpactofthedigitalworldontheirclientele.“A
feelingofdisgustfellonthefacesofluxurybrandexecutiveswhentheysawtheirgoods
soldviaonlineauctionsideeBayorAmazon-arguablytheworld’slargesshoppingmall.
Thathoweverwasinthebeginning,andluxurybrandsarefeelingfriendliertoplaceslike
eBayandAmazonbecausesalesnumbersprovetheirfearstobewithoutmerit.Gucci
forexamplehasmadeAmazon.comtheirofficialauthorizedonlineretailer”(Adams).
ThisbrandunderstandsthebenefitsthatAmazoncanprovidetheirshopperssuchas2
dayshippingandaccessibilitytoalltypesofproducts;Guccitookadvantageofthis
forumandunderstandsthat“intheendconsumersarelookingforaneasywaytoget
thethingstheywant”(Adams).AlthoughGucciunderstandsthebenefitsofusinga
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third-partyretailer,theluxurybrandexperiencemustberecognizedateverystageof
thepurchaseprocess.Granbymarketingclaims“theexpectedandrequiredcustomer
serviceismuchhigherfromaluxuryretailer;fromin-storecustomerservicetoafter
caresupportluxurybrandsneedtoliveuptoexpectationswhenitcomestocustomer
service”(GranbyMarketing).Thisclaimdisplaystheimportanceofhowthedigitalage
hascreatedanomnichannelapproachtosales.Whetherthecustomerisbuyingthe
Guccipurseinstoreornot,theserviceandexperienceofthepurchasemustbecarried
outinallchannels.Regardlessoftheluxuryproductbeingsold,brandsmustrecognize
thatstrategychangeisnecessaryforsuccess.
Inmyreviewoftheliterature,Idiscussedthevariousviewpointstowardsluxurybrands
intoday’smarketplace.Ialsoexpressedtheimpactofthedigitalworldontheluxury
brandconsumer,suggestingthatthisconsumerisnotthesameastheconsumerthat
existedwhenmanyofthesebrandsoriginated.Icontinuedbyintroducingthe
importanceofluxurybrandsinunderstandingthetechsavvyconsumeroftodayand
howthesebrands’marketingstrategiesmustevolve.Basedontheinformationgathered
andpersonalresponses,Iconductedasurveythatfurtheracknowledgeshow
understandingluxurybrandsandtheirconsumersandacceptingthedigitalrevolutionis
imperativetocreatingappropriatemarketingstrategies.Furthermore,theresponses
fromcollege-agedstudents,mostlymillennials,willprovideinterestinginsightand
perhapsrelevantcomparisonsduetotheeffectsofworldeventssuchastheemergence
oftechnologyandthegrowthoftheluxurysectoronthisgeneration.
ResearchMethods
Inpursuanceofsuccessfullyanalyzingtheaforementionedthemes,myresearch
incorporatedacomprehensivereviewofsecondaryliteratureaswellasaprimary
researchsurvey.Ibeganmyresearchbysearchingforcrediblediscussionregarding
perceptionsonluxurybrandsandfoundthatthistopichasbeengreatlydiscussedsince
luxurybrandsoriginated.Myresearchrevealedthattherehasalwaysbeenadifference
ofopinionamongconsumers’attitudestowardstheluxurymarket,andthateven
individuals’psychologicalmotivesplayaroleinthisdiscussion.However,Iwantedto
personallydiscoverpeople’sinitialthoughtstowardsthisparticularmarketsegmentin
currenttimesandseeiftherewerespecificcharacteristicsaboutproductsandbrands
thatmadeconsumersperceivethemeasluxurious.Inregardstomysecondtheme,
thereisnodenyingthatconsumerhabitsandshoppingmethodshavedrastically
evolvedduetothedigitalworld.Researchexplicitlyrevealedthatthereisnodoubta
newconsumerintoday’sworld;however,thesearchforidentifyingluxuryconsumers
seemedmoreelusive.Furthermore,seekingtoestablishtheexactwantsandneedsof
theseconsumersprovedtobeaninterestingquestion.Idecidedthatsurveyingcollege
studentdemographicwouldprovideauniqueperspectiveonperceptionsofluxury
brandsandwouldupholdsecondarydataregardingthecurrentshoppinghabits.This
particulardemographichasalsogrownupconcurrentwiththeriseoftechnologyaswell
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astheenormousexpansionoftheluxurymarket.Inadditiontosurveyingthecollege
studentdemographic,Ibelieveditwouldbeusefultohaveresultsfromolder
demographicsthatwereaccustomedtotraditionalshoppingmethodsandknewaworld
withouttechnology.Finally,Iwantedtofurtherexamineandprovetheimperativeness
ofluxurybrandsacceptancetowardsthedigitalage,andtheirneedforflexibilitywithin
theirmarketingstrategies.Thus,Icreatedasurveytoaddresseachofmythemes;
overall,Iwantedmysurveytoanswerifandmorespecificallywhatcertainaspects
influencedindividuals’perceptionstowardsluxuryproducts.Furthermore,Ihopedit
wouldrevealessentialinformationthatbrandscoulduseinordertocreateappropriate
marketingstrategiesthatwouldensuretheirfuturesuccess.
Whenanalyzingtheresultsgatheredinmysurvey,theresponsesnotonlyproved
beneficialinsupportingmysecondaryresearchbutalsoprovidedinterestingandnew
findings.Iorganizedmyprimaryresultsaswellasmysecondaryfindingsinorderto
properlysupportmydifferentthemes.Throughthesemethods,Iwilldivulgemy
findingsandprovideinsightfulrecommendations.
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Demographics
Chart1
• 91%collegestudents
•
•
•
•
•
Seniors-32%
Juniors-22%
Sophomores-19%
Freshman-21%
GradStudent-1%
=totalof239respondents
• 36%male
• 64%female
• 91%18-24yearolds
• 9%25+yearolds
13
ResearchResults:
Theme1Results:ThePerceptionofLuxuryBrandsinToday’sMarket
Thereisnodisputebetweenresearchersthattheluxurymarketsectorhasexperienced
rapidgrowthsincethe1990s.Thisexpansionhasbeenonsetby“globalization,wealthcreationopportunities,newmarketsegments,digitalcommunications,international
travelandcultureconvergence,andhasledtoaseriesofbusinesschallengesthatluxury
practitionershaveneverknown”(Okonkwo285).Whenanindustryexperiencessuchan
expansion,itisevidentthatnotonlytheclientelebasewillexpand,inthiscaseresulting
inlessexclusivity,butalsotheentiremarkets’appearanceisfacedwithopportunitiesto
transform.However,whenconductingmysecondaryresearchandevenconversingwith
accreditedpeers,Irealizedthereisstillanelusiveunderstandingwhendefiningthis
market.Theretendstobeinconsistencyinindividuals’attitudesandfeelingstowards
themarket.Inmypersonalresearch,Iwantedtounderstandpeople’sinitialthoughts
towardstheluxuryindustryandevaluatetheirfeelingstowardsspecificbrands.When
collectingthisdata,Ihopedtogainabetterinsightonindividual’s,particularly
millennials,perceptionstowardstheluxurymarketandrecognizespecificconsistencies
orinconsistenciesamongrespondentswhenidentifyingaproductasluxurious.
(1) Initialresponsesontheterm“luxurybrand”
ThefirsttwoquestionsIaskedduringmysurveywereinregardstopeople’sinitial
thoughtswhenhearingorseeingtheterm“luxurybrand”.Thefirstquestionasked
respondents“What3wordsfirstcometomindwhenyouheartheterm“luxurybrand”?
Thesecondquestionwas“what3brandsfirstcometomindwhenyouheartheterm
“luxurybrand”?Althoughsimplisticinresponse,Iwantedtogatherageneralconsensus
onpeople’sinitialthoughtsanddetermineifthereweresimilaritiesamongrespondents.
Ialsowantedtoseeiftherewereanynoteworthyoutliersoruniqueresponsesthat
wouldproveworthytomyresearch.
14
MostFrequentResponsesforDescribingLuxuryBrands
Chart2
What3wordsfirstcometomindwhen
youheartheterm"luxurybrand"?
What3brands,irstcometomindwhen
youheartheterm"luxurybrand"?
70%
31%
27%
22%
20%
37%
20%
13%
Rolex
Mercedes
Louis
Vuitton
Chanel
Fromtheabovecharts,wecandrawsomekeyconclusions:
• Theword“expensive”wasassociatedwithrespondentsinitialthoughtsonthe
term“luxurybrand”70%ofthetime
• 31%ofrespondentsincludedRolexasoneofthefirst3brandstocometomind
whenhearingtheterm“luxurybrand”
• 13%ofresponsesincludedtheword“rich”intheiranswerswithregardstothe
firstwordstocometomindwhenhearingtheterm“luxurybrand”
Althoughnotshownintheabovecharts,otherinterestingtakeawaysweregathered
fromthepreviouslymentionedquestions:
• Responsessuchas“entitled”,“egotistical”,“modern”,“snob”,“rich”,“new”,
“leather”,“silk”,and“cars”wererecordedbyrespondents
• TheApplebrandwasmentionedamultitudeoftimeswhenrespondents
referredtoluxurybrands
Expensive
Quality
Nice
Rich
15
(2) GeneralQualitiesforIdentificationofLuxuryProducts
Inordertogainanunderstandingofwhatqualitiesconsumersrecognizewhen
distinguishingaproductasa“luxuryitem”ornot,Iaskedacoupleofquestions
associatedwithproductfeatures.ThefirstquestionIaskedwasforrespondentsto
“pleaserankinorder(1=highest,6=lowest)whichqualitiesyoubelievearethebest
indicatorsforidentifyingaproduct/brand/serviceasa“luxurygood”.Thequalitieslisted
forthequestionwere:quality,price,historyofbrand,serviceexperience,exclusiveness,
anddegreetowhichtheproductiscustomized.Representedbelowareresultsshowing
whichproductattributesconsumerslistedasthebestindicatorsforidentification.
GeneralQualitiesforIdentificationofLuxuryProducts
Pleaserankinorder(1=highest,6=lowest)whichqualitiesyoubelievearethe
bestindicatorsforidentifyingaproduct/brand/serviceasa“luxurygood”:
Chart3
Quality
44%
Price
24%
16%
Exclusiveness
HistoryofBrand
13%
DegreetowhichProductis
Customized
5%
3%
ServiceExperience
0%
20%
40%
60%
80%
100%
KeyPointsofInterest:
• 44%ofrespondentsbelievethatqualityisthebestindicatorforidentifyinga
product/brand/serviceasa“luxurygood”
o Thequalityoftheproductgreatlyexceededallotherattributesasbeing
thebestindicatorforidentification
• 24%ofrespondentsbelievethatpriceisthebestindicatorforidentifyinga
product/brand/serviceasa“luxurygood”
• Thefewestamountofrespondents,only3%,believedthattheservice
experiencewasthebestindicatorforidentifyingaproduct/brand/serviceasa
“luxurygood”
16
ThenextquestionIaskedwasrelatedtothepreviousone,askingrespondents“Are
thereindicators,otherthantheoneslistedinthepreviousquestion,thatwouldidentify
aproduct/brand/serviceasa“luxurygood”toyou?Ifso,pleasestatethembelow.If
not,simplystate“N/A”.Describedbelowaresomeoftheresponsesreceived:
“uniqueness….
emotiontowardstheproduct…..
theabilityfortheconsumertofeel
appearance….locationof
purchase-ex.Departmentstore,highendboutique,flagship
popularforits
category... limitedavailability…minimum
store…..
rare…
locationstogetthem
”
at…..rarity…easeofproducing/acquiringproduct
(3) ConsiderationsofBrands&PreviousPurchases
Forthenextsetofquestions,Iwantedtofirstseehowoftentherespondentsinmy
surveyconsideredthemselvesconsumersofluxurybrands.Furthermore,Iwantedto
evaluatetheirperceptionsonparticularbrandsandproductsandthenseewhichof
thoseproductstheyhavepreviouslypurchased.Mygoalinaskingthesequestionswas
toseeifIcouldidentifyhoworwhyconsumersrankcertainproductsasluxuriousand
thentrytoevaluatewhetherornottherewereinconsistenciesamongconsumer
responses.ThefirstquestionIaskedrespondentsstated,“Pleaseindicatewhichofthe
followingyouconsidertobealuxurybrand/product/service(checkallthatapply).The
secondquestionstated,“Pleaseindicatewhichofthefollowingyouhavepreviously
purchased(checkallthatapply).Belowaregraphsdepicting(1)thepercentageof
respondentsthatconsidereachbrandoritemasaluxurybrand,and(2)thepercentage
ofrespondentsthathavepurchasedthosesameitems.
17
ConsiderationsofBrands
(1)Pleaseindicatewhichofthefollowingyouconsidertobealuxury
brand/product/service(checkallthatapply).
Chart4
PreviousPurchases
(2)Pleaseindicatewhichofthefollowingyouhavepreviouslypurchased(check
allthatapply).
Chart5
KeyPointsofInterest:
• 29%ofrespondentsconsideranAppleiPhonetobealuxuryproduct
• 87%ofrespondentshavepreviouslypurchasedanAppleiPhone
• Only12%ofrespondentsconsiderStarbuck’scoffeetobealuxuryitem
• 89%ofrespondentshavepreviouslypurchasedaStarbuck’scoffee
18
ConclusionsaboutTheme1Results:
Basedonmyanalysisofrespondents’initialthoughtstowardstheterm“luxurybrand”,I
wasabletoconcludethatthemajority,70%tobeexact,directlyassociatetheword
“expensive”withthisphrase.Inregardstothissamequestion,Ifounditinterestingthat
the4thmostfrequentwordamongrespondentswas“rich”.Inaddition,condescending
wordssuchas“entitled”andegotistical”wererecorded.Ibelievethattheseresponses
proveinterestingtomyresearchbecauseitshowshowindividuals’focusimmediately
shiftsfromdescribingluxurybrands,andinsteaddescribingpersonalcharacteristics.
Moreimportantly,Ithinktheseresponsesshowssomeindicationofwherethe
inconsistenciesinattitudesandperceptionsarisewithregardstowardstheluxury
market.Itismybeliefthatindividualsoftenincorporatetheirpersonalfeelingstowards
individualswhoownluxuryproductswiththeiroverallfeelingstowardstheindustry.
Furthermore,inmyanalysisofthebestindicatorsforidentifyingluxuryproducts,I
foundsomeinterestingstatistics.44%ofrespondentsbelievethatqualityisthebest
indicatorforidentifyingaproduct/brand/serviceasaluxurygood,followedbypriceand
thenexclusiveness.Theopen-endedquestionprovedrelevantduetothecontradictions
inresponses.Forexample,onerespondentlisted“popularforitscategory”asaword
thatwouldidentifyaproduct/brand/serviceasaluxurygood.Yetotherrespondents
providedanswersjustoppositethanthat,statingthewords“rare”and“rarity”for
appropriateindicators.Thedifferenceinopinionportrayedbytheseremarkssupports
mycasefortheuncertaintyassociatedwiththisindustry.
Whenevaluatingrespondents’personalconsiderationstowardscertainbrandsand
purchasehistory,significantresultsarose.Respondentswereaskediftheyconsidered
themselvestobeaconsumerofluxurybrandsorservicesandifsowhatpercentageof
thetime.Amongthe239respondents,therewasacombinedaverageof30%ofthe
time.Whenaskedaboutspecificbrandsandproducts,only29%ofrespondents
consideranAppleiPhonetobealuxuryproduct.However,43%ofpeopleconsiderCole
Haanpennyloafersaluxuryitem.ThesestatisticsarewhereIwillprovethathypocrisyis
profoundlydisplayedamongconsumers.Asseenearlier,70%ofindividualsimmediately
associateexpensivewiththe“luxuryindustry”,sowhyisa$400-$600AppleiPhoneseen
aslessluxuriousthana$100pennyloafer?Inthiscase,Ibelieveitisthepopularityof
theiPhoneandindividuals’needforacceptanceamongsocietythattakesprecedence
overthepriceissue.Anotherexampleprovesrelevantwithregardstoonly12%of
consumersconsideringaStarbuck’scoffeetobealuxuryitem,yet93%ofpeople
viewingaGuccipurseasluxurious.InnowayamIinferringthataGuccipurseinnota
luxuriousitem;however,Ibelieveanexamplescenarioneedstobeconsideredwith
regardstolowpercentageofpeoplewhoconsideraStarbuck’scoffeeasaluxuryitem.
Forinstance,aconsumerpurchases$5Starbuck’scoffeeeveryday,Monday-Friday,
resultinginroughly$25spentweeklyand$100spentmonthly,and$1000+annually.In
thistime,thatsameconsumercouldhavepurchasedaGuccipurseforlessthanthey
spentoncoffeeandownanitemthatisguaranteedtolastalifetime,incomparisontoa
19
productthatisconsumedinamatterofminutes.However,individuals’needsfor
instantgratificationaswellastheirinabilitytoseetheimpactsoftheirdailyspending
disguisetheseoccurrences.Alsonoteworthy,89%and87%ofrespondentsanswered
thattheyhadpurchasedStarbuck’scoffeeandanAppleiPhone,makingitsafetosay
thatalmostalloftherespondentscouldbeidentifiedasconsumersofluxurybrands.
Thepreviouslymentionedstatisticsanddescribedscenariosfurtherprovethe
inconsistenciesbetweentheperceptionsofluxurybrandsamongconsumers.
Theme2Results-TheLuxuryConsumerofToday’sDigitalWorld:
Whenevaluatingluxurybrandsintoday’smarketplaceandtheimpactofthedigitalage
onthesebrands,theconsumermustbeanalyzed.Regardlessofwhatmarketisbeing
evaluated,thereisnoconflictamongresearchersthatthereisinfactanewconsumerto
bediscussed.Accordingtoaglobalmanagement-consultingfirm,“Manyluxurybrandsineffortstoengageandinfluencecustomersineverystageofthe“customerdecision
journey”arepartneringwithmulti-brandretailersonline”(Dauriz,Remy,andSandri).
Theluxuryconsumerthatwasonceeasilyrecognizablebymarketersasonewhowas
absorbedwithenjoyingtheentireshoppingexperienceandpremiercustomerservice
nolongerexists.Itisevidentthatthedigitalworldcontinuestorapidlyadvanceandis
thenquicklyfollowedbychangesinconsumerbehavior.Therefore,thenewconsumer
ofthedigitalworldaswellasthenewmeaningoftheluxuryshoppingexperiencemust
beunderstood.Forthistheme,Iwantedtoevaluateindividuals,particularlymillennials,
routinepathtopurchasestartingwiththeinitialformofadvertisingcontactandthen
seeingtheirpreferredresearchtactics.Whencollectingthisdata,Iwantedtogaina
baselineunderstandingofwhatkeyfactorsleadtocustomersatisfactionandrecognize
whatismostimportantformarketerstounderstandaboutthepresentdayluxury
consumer.
(1) ImpactofTechnology&SocialMediaonConsumers
Inordertoachieveanunderstandingofthestrongpresenceoftechnologyandsocial
mediaincurrentconsumers’lives,Iaskedaseriesofdifferentquestions.Ifirstasked
respondentsiftheyownedasmartphone,meaningonethattypicallyhasInternet
access,andreceived“yes”from100%oftherespondents.Mynextquestionasked
consumers(1)“whichofthefollowingsocialnetworkingsitesdoyoucurrentlyhavean
accountwith?”Followingthatquestion,Iaskedconsumers(2)howmanytimesperday
theyaccessanyoralloftheirsocialmediaaccounts?Thegraphsbelowdepictthe
results:
20
ImpactofTechnology&SocialMediaonConsumers
(1)Whichofthefollowingsocialnetworkingsitesdoyoucurrentlyhavean
accountwith?(Checkallthatapply):***Noneoftheabovewasanoption
Chart6
(2)Howmanytimesperdaydoyouaccessanyorallofyoursocialmedia
accounts?(24=averageofonceperhour)…ifyoudonotaccessdaily,please
choose(N/A).
Chart7
18%
30%
0%
1%
0%
0%
8%
8%
2%
2%
4%
0%
1%
2%
8%
1%
3%
2%
3%
4%
4%
6%
3%
2%
4%
1%
N/A
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
10%
13%
20%
KeyPointsofInterest:
• 75%ofallrespondentshaveatleastoneorallofthefollowingaccounts
(Facebook,Instagram,Twitter,Snapchat)
• Norespondentschosethe“noneoftheabove”optionindicatingthatall239
respondentshaveoneofthesocialmediaaccountslisted
21
•
•
18%ofrespondentsindicatedthattheyaccessedanyoralloftheirsocialmedia
accountsatleastonceperhour(highestpercentagewas18%)
only3%ofparticipantsselectedthattheydonotaccessanyoralloftheirsocial
mediaaccountsdaily
(2)PathtoPurchaseHabits
Afterrecognizingtheoverallpresenceoftechnologyandsocialmediaamong
consumers,Iwantedtogatherdataregardingpathtopurchasehabits.Resultsfrommy
surveyaswellassecondaryresearchprovedthattechnologyisawayoflifeamong
shoppersintoday’sworld,butIwantedtoevaluatehowinfluentialitwasintheoverall
purchasepath.ThefirstquestionIposedaskedrespondentstorankfromhighestto
lowesttheformofadvertisementthatinfluencedtheirpurchasedecisionsmost
frequently.Ithenaskedconsumerstoindicatehowfrequentlytheyencounterthe
followingshoppinghabits/activities,rangingfromstronglydisagreetostronglyagree
(5),andtherearetwoquestionsassociatedwiththisplatform.Thepiechartdepictsthe
advertisingmediumsthatinfluenceconsumerspurchasehabitsmostfrequently.The
secondchartdepictstheaverageresponsetoeachstatement.
PathtoPurchaseHabits
Whatformofadvertisementinfluencesyourpurchasedecisionsmost
frequently?(pleaserankfromhighesttolowest…1=highest,7=lowest)
Chart8
WordofMouth
(friends,peers)
50%
SocialMedia
(Instagram,
Facebook,
Pinterest,
Snapchat)
34%
Radio
Commercials
1%
Billboards
1%
22
Television
Commercials
5%
Magazine
Advertisements
(online)
Magazine 6%
Advertisements
(print)
3%
(2)Pleaseindicatehowfrequentlyyouencounterthefollowingshopping
habits/activities:(1)stronglydisagree,(2)somewhatdisagree,(3)neitheragree
nordisagree,(4)somewhatagree,(5)stronglyagree
Chart9
KeyPointsofInterest:
• Themajorityofparticipantsagreedthattheywereinfluencedormadeawareby
someformofsocialmediaoronlineadvertisementaboutproductsbefore
purchasingthem
o 79%eithersomewhatagreedorstronglyagreedwiththisstatement
• Accordingtothegraph,mostconsumersagreedorstronglyagreedwiththe
statement“Whenpurchasingaproduct,IresearchtheproductonlinebeforeI
purchaseit”;itreceivedameanresponseof4.06.Tobeexact,acombined82%
ofrespondentsagreedorstronglyagreetothisstatementsowecaninferthat
morethan¾ofconsumersresearchproductsonlinebeforepurchasing.
(3)PreferredShoppingMethods
Afterobtainingtheresultsoftheimpactoftechnologyonconsumersaswellrecognizing
theadvertisementmediumsthatinfluenceconsumersmostfrequently,Iwantedto
focusmorespecificallyonconsumers’preferredshoppingmethods.OnequestionI
askedrespondentswas“Whenpurchasingaproductorservice,pleasemovethemarket
toindicatehowfrequently(%ofthetime)youusethespecifiedshoppingmethods
(0=neverusemethod,100=alwaysusemethod).Theinstoreshoppingmethodreceived
anaveragefrequencyof64.8%,whereastheonlineshoppingmethodreceivedan
averagefrequencyof43.4%.ThenextquestionIaskedconsumerswaswhetherthey
23
foundtheonlineshoppingexperiencetobemoreconvenientthantraditionalshopping
experience?Thepiechartbelowdepictstheresults.
PreferredShoppingMethods
Doyouconsidertheonlineshoppingexperiencetobemoreconvenientthanthe
traditionalshoppingexperience?
Chart10
KeyFindings:
• Asnotedabove,theinstoreshoppingmethodisusedmorefrequentlythanthe
onlineshoppingmethod
o However,78.3%ofconsumersconsidertheonlineshoppingexperience
tobemoreconvenient
ConclusionsaboutTheme2Results:
Myoverallmissioninthissectionofmyresearchwastoestablishthepredominant
effectoftechnologyonconsumers’everydaylifeandevaluatethecommonshopping
habits.Consideringmillennialsholdagreatdealofthefuturepurchasingpower,I
believeditwasessentialtoanalyzetheirbehavior.Iultimatelywantedtoidentifythese
newconsumers’behaviorbecauseIbelieveitisfundamentalforconstructingaccurate
luxurybrandmarketingstrategies.Firstandforemost,Ibelievemysurveyresultsproved
pivotalinsupportingthestrongpresenceoftechnologyandsocialmediaintoday’s
world.With100%ofrespondentsowningasmartphone,95%havingaFacebook
account,and18%ofthosecheckingoneoralloftheirsocialmediaaccountsonceper
hour,thesestatisticsleavenoroomtodenythemomentouspresenceofthedigital
24
world.Inmyhopestounderstandthepurchasepathtoconsumers,Ifoundthatwordof
mouthinfluencesconsumers50%ofthetimefollowedbysomeformofsocialmedia
advertisement34%ofthetime.Theimportantaspecttorealizeaboutthesestatisticsis
thatsocialmediaadvertisementoutweighsallotherformsoftraditionaladvertisingby
significantfigures.Alsoitisimportanttorealizethatintoday’sdigitalworld,wordof
mouthisnotconfinedtojustconversingwithfriendsinperson,ratheritincludes
conversingwithfriendsviaFacebook,Instagram,Snapchat,etc.So,itisarguablethat
consumerscouldbeinfluencedbyadvertisementsviatechnologyasmuchas84%ofthe
time,whichaffirmsmypreviousresults.Italsomustbenotedthat82%ofrespondents
saidtheyresearchproductsonlinebeforetheypurchaseit,andanastounding78.3%
saidtheyconsidertheonlineshoppingexperiencemoreconvenient.Furthermore,a
graphthatwaspreviouslyexplainedinmyTheme1resultsandcanbefoundonpage
16,provedextremelyrelevantforthisanalysis.Whenidentifyinga
product/brand/serviceasa“luxurygood”,amere3%believedthattheservice
experiencewasthebestindicator.Thisstatisticisshockingforanindustrythatwasat
onepointconsumedaroundofferinganexceptionalshoppingexperiencefortheir
customers.Ibelievetheresultsrepresentedabovespeakforthemselvesregardingthe
newconsumerthathasemergedintoday’sworld.
Theme3Results:StrategicFlexibilityinMarketingLuxuryBrands
Uponresearchingluxurybrandsstrongpresenceintoday’smarketplaceandprovingthe
impactofthedigitalageonconsumers,Iwantedtodiscoverwhatthismeansforthe
marketingofluxurybrands.Formanyindustriesitwasevidentthattheymustcreatea
strongdigitalpresenceinordertoretaintheircustomerbase,buttheluxuryindustry
facedmoreofachallenge.Manybrandsfearedwhatastrongdigitalpresencewoulddo
totheirimageandexclusivity,whileothersclaimedthatluxuryconsumerscaredtoo
muchaboutengaginginapremiershoppingexperiencetoeverpurchaseproducts
online.Whenanalyzingasignificantamountofsecondaryresearch,Ifoundthatmany
luxurybrandswerestilluncertainaboutwhatmarketingapproachestotakeinthisera.
Throughmyprimaryresearch,Iwantedtoidentifytheimportanceofluxurybrandsin
acceptingthechangesinthemarketplaceandproviderelevantstatisticstowhyadigital
presenceisnecessaryforprosperity.Thetopicofthenewdigitalconsumerthatwas
previouslydiscussedintheme2overlapswiththisthemebecauseitisimperativefor
marketerstorealizethisconsumers’presenceinordertoimplementthebestmarketing
strategies.Luxurybrandsmustacknowledgethattheirentireindustryhaschangedfrom
whatitoncewas,andtheymustfindthebestwaystoaccommodatetheircurrent
clientele.Iwantedtocontinuemyresearchbygatheringsomepersonalaspectsfrom
respondentsthatIbelievedwouldproverelevantinshowingtheimportanceofadigital
presenceforluxurybrands.Whencollectingandanalyzingresults,Isoughtto
understandwhattheidealshoppingexperiencewasforconsumersandwhatfactors
weresignificantwhenpurchasingluxuryproducts.
25
(1)ConsumerPurchasingDecisions
Aspreviouslymentioned,theme2andtheme3areconnectedbecausetheconsumer
mustbeunderstoodinordertomarketabrandproperly.However,inanalyzingthe
resultsfrommysurvey,IhavebrokendownresponsesinawaythatIfeelbestfitseach
theme.Withthatbeingsaid,thenextsetofquestionswillinvolveconsumer-purchasing
decisions;however,Ibelievethesequestionsaremoreappropriateforprovingthe
flexibilitythatisobligatoryforluxurybrandmarketers.Ibeganbyaskingrespondentsto
rankaseriesofstatementsaccordingtohowstronglytheyagreed(5)ordisagreed(1).
Thegraphbelowdepictstheresults,displayingthemeanresponsetothe3statements.
Consumer-PurchasingDecisions
Pleaseindicatehowfrequentlythefollowingshoppinghabits/activities:
Stronglydisagree(1),somewhatdisagree(2),neitheragreenordisagree(3),
somewhatagree(4),stronglyagree(5)
Chart11
KeyFindings:
• Themajorityofrespondentsprefertophysicallypurchaseanamebrandproduct
instore
• Accordingtothegraph,themajorityofrespondents,29.7%tobeexact,disagree
withthestatement,Whenpurchasinga“namebrand”productonline,IwillONLY
purchaseitfromtheauthorizedwebsite
26
Themajorityofrespondentseitheragreed(36.9%)orstronglyagreed(36.0%)
withthestatement,“Whenpurchasinga“namebrand”productonline,Isearch
forthebestdealandpurchaseitfromthatsource”.Fromthiswecaninferthat
nearly¾ofconsumerssearchforthebestdeal.
ThenextquestionIaskedrespondentswastorankthekeyfactorsthatlead/would
leadtocustomersatisfactionwhenpurchasingaluxuryproductonline,with
1=highest,4=lowest).Withmytargetagegroupbeingmillennials,agenerationthat
hasgrownupwithtechnology,Ifeltthattheirresponseswouldprovebeneficial.The
resultsofthisgraphisdepictedbelow:
•
CustomerSatisfactionFactors
Whenpurchasingaluxuryproductonline,pleaserankthekeyfactorsthat
lead/wouldleadtocustomersatisfaction(1=highest,4=lowest):
Chart12
80%
70%
76%
60%
50%
40%
30%
20%
10%
16%
11%
0%
productquality
deliversinthecorrect websitefunc]onality
]me/place
(ex:easytonavigate
website)
5%
easyaccessto
customerservice
KeyFindings:
• 76%ofrespondentsplace“productquality”asthenumber1factorfor
customersatisfaction
• Basedontheresults,only5%ofrespondentsplace“easyaccesstocustomer
service”asthenumber1factorforcustomersatisfaction
Atthispointofmyresearch,IhadafewotherquestionsthatIbelievecouldprove
usefultomyresearch.Firstoff,Iwantedtoknowhowmanyoftherespondents
currentlyhadanAmazonaccount,andiftheydid,whetherornottheyhadAmazon
Prime.ThelastquestionIposedstated,“Inthefuture,wouldyouconsiderpurchasing
eitherofthefollowingproductsonline?”Thefollowinggraphsdisplaytheresults:
27
AmazonAccounts
DoyouhaveanAmazonaccount?
Chart13a
Ifyesisselected!DoyouhaveanAmazonprimeaccount?
Chart13b
FuturePurchaseBehavior
Inthefuture,wouldyouconsiderpurchasingeitherofthefollowingproducts
online?
Chart14
28
KeyPoints:
• 81%ofrespondentscurrentlyhaveanAmazonaccount,and61%ofthose
individualshaveanAmazonPrimeaccount
• Amere12%ofrespondentswouldconsiderpurchasingaweddingringonlinein
thefuture,andonly15%wouldconsiderpurchasinganautomobile
• ¾ofrespondentsclaimthattheywouldnotconsiderpurchasingeithera
weddingringoranautomobileonlineinthefuture
ConclusionsaboutTheme3Results:
Thepredominantgoalofthissectionwastogaininsightonwhattheimpactofthe
digitalagehasdoneforluxurybrands’marketingstrategies.Asdiscussed,Iknewthe
consumerhadevolvedintheirshoppinghabits,butIwantedtoexaminewhatthis
meantfromamarketingstandpoint.Ibelievedthattargetingmillennialswouldbe
advantageousbecausethisgenerationgrewupinthedigitalworld,buthasalsobeen
exposedtothetraditionalluxuryshoppingexperience.Whenanalyzingmysurvey,the
responsestothesequestionsprovedveryinteresting.Thequestionsinvolving
consumer-purchasingdecisionssuggestedthatthemajorityofrespondentswould
prefertophysicalphysicallypurchasealuxuryproductinstore.Anotherkeyfindingwas
thatthemajorityofrespondentsdisagreedwiththestatementthataddressedonly
purchasingluxurybrandproductsonlinefromtheauthorizedretailer;furthermore,
almost75%ofrespondentsagreedorstronglyagreedthattheywouldsearchforthe
bestdealonlineandpurchaseitfromthatsource.Statisticsalsoprovedthat76%of
respondentsbelievedthatproductqualitywouldbethemostimportantfactorin
guaranteeingcustomersatisfactionwhenpurchasingluxuryproductsonline.Themore
shockingstatisticfromthisquestionwasthatamere5%ofconsumersselected“easy
accesstocustomerservice”asthetopfactor.Thisstatisticprovidesextremelypertinent
becauseitrevealsthatwhenpurchasingonline,consumersarenolongerasfocusedon
theserviceprovidedbythebrands,ratherthattheyarefocusedonreceivingaproduct
worththepricetheyarepayingforit.
Iconcludedthisthemewithafewpersonalquestionsfortherespondents.Upon
analysis,Ibelievetheresponsessupportmypointabouttheluxurymarketneedingto
takeanomni-channelapproach.Aconsiderable81%ofrespondentsstatedthatthey
haveanAmazonaccountand61%ofthosehaveAmazonPrimeaccounts.Thesefindings
aloneshowthatalmostalloftherespondentshaveboughtorresearchedproducts
onlineatsomepoint,andthemajorityofthoseindividualscareaboutfastserviceand
freedeliveries,asthosearebenefitsassociatedwithAmazonPrimeaccounts.When
askingconsumerswhethertheywouldconsiderpurchasingaweddingringoracar
onlineinthefuture,77%respondedbysayingtheywouldpurchaseneither.Ibelieve
thesefindingsrevealthatluxurybrandsmustcontinuetoprovideexceptionalcustomer
serviceinstores,asmanyconsumersareadamantaboutbuyingcertainproductsthere.
Furthermore,Ibelievetheresponsesconfirmedmysecondaryresearchwhichsuggested
29
thatluxurybrands’digitalpresenceisnotjustforthepurposeofsalesanddistribution,
ratheritisforinformingandengagingcustomers.
Limitations:
Onemajorlimitationofthisstudywastheunanticipatedlengthofthesurvey.Therewas
afairlysubstantialamountofrespondentswhobeganthesurveybutdidnotcomplete
it,whichIbelieveisduetothenumberofquestionsadministered.Inthebrief
describingthesurvey,Istatedthatthesurveyshouldonlytake5-10minutes.Ibelieve
thatImighthaveunderestimatedthetimeexpectationsofthissurveyduetomy
familiaritywiththequestions.Inthefuture,Iwouldperhapsadministerthesurveyto
individualswhohadneverseenthequestionsbeforeandseehowlongittakesthemto
readthroughthequestionsandformulateresponses.Thismethodwouldthenallowme
tobetterinformindividualsaboutthetimeneededtotakethesurveyandhopefully
woulddecreasethedropoutrate,allowingformoreauthenticdatatobegathered.
Anotherlimitationofthisstudywastheformatofthequestionsadministeredtosurvey
respondents.IbelieveIshouldhaveconsideredmorecloselyhowIwouldbeanalyzing
thedataandwhatresultsIwouldwanttobedocumentingwithregardstomyresearch.
Forinstance,Iaskedmanyquestionsthataskedrespondentstoindicatehowfrequently
theyencounteredspecificshoppinghabits,onascaleof1-5with1being“strongly
disagree”and5being“stronglyagree”.However,onthisscale,Iincludedaneutral
responseof“neitheragreenordisagree”.Uponreexamination,Iwouldhavenot
includedthisoptionbecauseitgaveindividualsaquickandeasyoutletanddidnot
providethemostaccurateresponses.IbelieveifIwouldhavestructuredthequestions
moreprecisely,respondentswouldhavebeenmorespecificintheirresponsesandthe
datawouldhavebeenlessobscure.Ibelievethesechangescouldhavememore
convincedinmyfindingsaswellasmoreassertiveinmyrecommendations.
RecommendationsandConclusions:
Initially,Isetouttodiscovertheimpactthatthedigitalagehashadonluxurybrands.
Beforeevenbeginningresearch,Iwasawarethattechnologyhadsignificantlyaffected
consumer-shoppinghabitsineverymarketplaceandeveryindustry.Beingamillennial
myself,Ihavegrownupinaworldwhereinformationisavailablewithinsecondsand
technologyisapartofeverydaylife.However,thispointiswhenIbegantowonderjust
howmuchtechnologymusthaveimpactedanindustrythatwasbuiltaroundproviding
consumerswithalavishshoppingexperienceandofferingexclusiveproducts.OnceI
beganresearchingthisspecifictopic,Idiscoveredamultitudeofaspectsaboutthe
entireluxuryindustryitself.Ibecameawareoftheconsiderablepresenceoftheluxury
marketintheoveralleconomy,andnoticedthatperceptionsvariedgreatlywhen
definingthismarket.ItwasatthispointthatIrealizedinordertosuccessfully
understandtheimpactofthedigitalageontheluxuryindustry,Imustevaluatethe
differentperceptionsassociatedwithluxurybrands.Uponresearchingmore,I
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recognizedaproblemwithintheluxuryindustrywithbrandsstrugglingtoacceptwhat
thedigitalworldmeansfortheirmarketingstrategies.Throughoutmyresearch,I
believedthatbyinterpretingconsumers’perceptionsonluxurybrandsandassessing
shoppinghabits,Icouldthendeterminewhatthedigitalagereallymeansforthe
marketingofthesebrands.
Itwasapparentthroughmycompilationofsecondaryresearchaswellasprimary
researchthatluxurybrandshavebeenandcontinuetobeperceivedincontrasting
ways.Whenconductingmyownresearch,itwasrevealedthatindividualsnotonly
perceivethesebrandsdifferently,butthatsomerecognizetheminaverypositive
mannerandothersamorecondescendingmanner.Wordssuchas“rich”and
“egotistical”wereusedtodescribedluxurybrands.Oneaspectwasagreedupon,and
thatwasthatthemajorityofrespondentsassociatedtheword“expensive”when
hearingthetermluxurybrand.Themajorityofrespondentsalsoagreedthatqualityis
thebestindicatorforidentifyingaluxuryitem.Whenaskinganopen-endedquestionon
mysurveyregardingindicatorsforidentifyingluxuryproducts,Ireceivedmany
contradictingresponses.Somerespondentsidentifiedluxuryproductsasonesthatare
rareandunique,whereasothersidentifiedthemaspopularandknown.Other
contradictingresultsemergedwhenrespondentswereaskedtoidentifywhichbrands
orproductstheyconsideredtobeluxuryitems.Onlyaslightamountofrespondents
identifiedAppleiPhones,aproductrangingfrom$400-$600asluxuryitems,yet70%of
respondentsimmediatelyassociatedthetermexpensivewithluxurybrands.Itismy
consensusthatthepopularityoftheAppleiPhoneenablesindividualstodisregardthe
priceassociatedwiththeitemandthereforenotviewitasaluxuryitemorbrand.The
inconsistenciesthatarosewithresponsesfrommysurveyconfirmedmyprevious
secondaryresearchabouttheelusivemeaningofluxurybrands.Inconclusion,Ibelieve
thatperceptionstowardstheluxurymarketaremoreinfluencedbyindividuals’feelings
towardsothersthatconsumetheseproductsratherthantheproductitself.Ialsothink
thatthestatisticsprovethatconsumerscontinuetocontradictthemselveswhen
identifyingluxurybrands.
Mysecondthemedealtwithanalyzingtheluxuryconsumeroftoday’sdigitalworld.Itis
apparentthatregardlessofindividuals’ageorgeneration,everyone’sshoppinghabits
haveevolvedinsomeway.Formarketersofluxurybrands,itisofextremeimportance
thattheconsumeroftoday’sworldisacceptedandtargetedcorrectly.However,in
orderforluxurybrandstoproperlymarkettheirbrands,theirconsumersmustbe
analyzed.Fortheluxuryindustry,theimpactoftechnologyhasarguablyhadoneofthe
greatestimpactsonchangeinconsumerbehaviorduetotheshoppingexperiencebeing
suchapivotalpartofthepast.Aspreviouslymentionedintheresultssectionoftheme
2,100%ofrespondentsownamobiledevice,95%haveaFacebookaccount,and97%
checkalloroneofthoseaccountsonadailybasis.Thesestatisticsinthemselvesprove
theroleoftechnologyinconsumers’currentdailylives.Furthermore,socialmedia
provedtobethe2ndlargestadvertisingsourcetorespondentsfallingbehindwordof
mouth.Anotherconvincingstatistictotheimpactofthedigitalageisthatcloseto80%
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ofrespondentsagreedtoresearchingaproductonlinebeforepurchasingit.
Furthermore,amajorityofconsumersadmittedthattheybelievetheonlineshopping
experiencetobemoreconvenient.Theseresultssuggestthatthecurrentconsumerof
todayistech-savvy,influencedbysomeformofdigitaladvertising,andbelievesonline
shoppingtobeabeneficialmethod.
Theanalysisofthecurrentconsumerinmysecondthemeispivotalinexplainingwhy
luxurybrandsmustmakechangesintheirmarketingstrategies.Fortheme3,Iwanted
toprovewhyluxurybrandsmustbeflexibleintheirwaysandacceptthechangesthat
haveoccurredwithintheindustry.Ibeganthisresearchbyevaluatingconsumer
purchasedecisions,anddiscoveredthatthemajorityofrespondentswouldstillprefer
topurchasealuxurybrandproductin-store.Furthermore,mysurveyrevealedthatthe
majorityofconsumerswouldsearchforthebestdealwhenpurchasinganamebrand
productonline,andarenotconcernedwithpurchasingitfromtheauthorizedwebsite.
However,whenpurchasingaluxuryproductonline,respondentsdisclosedthatproduct
qualityisthekeyfactorforcustomersatisfaction.Otherresultsdivulgedthefactthat
81%ofrespondentscurrentlyhaveanAmazonaccount,andthemajorityofthosehave
Amazonprime.ItwasthroughmyanalysisofsecondaryresearchthatIdiscoveredthe
importanceofluxurybrand’sacceptancetowardsthedigitalworld;however,itis
throughmyprimaryresearchthatIamnowabletoproviderecommendationsforthe
marketersofthisindustry.
AsIdiscussedthroughoutmyresearch,consumers’perceptionsofluxurybrandsare
conflictingandunpredictable.Ibelievetheseinconsistencieshaveexistedsincethe
beginningofthisindustryandwillcontinuetoexistforavarietyofreasons.
Nonetheless,Ibelievetheimportantaspecttofocusonisthatluxurybrandspresencein
today’smarketplacecontinuestoexpand.Itismyrecommendationthatmarketersof
theluxuryindustryfirstcomprehendthenewconsumerofthedigitalworld,andthen
recognizetheimportanceofacceptingthedigitalways.Ibelievethatluxurybrandscan
provetheirvalueandworthinuniquewaysandimplementinganomni-channel
marketingstrategyisimportantforsuccess.Forexample,mysurveyindicatedthree
importantresultsforthisscenario:First,productqualityisthekeyforcustomer
satisfaction.Second,respondentsstatedthattheybelievetheonlineshoppingmethod
tobemoreconvenient.Third,theyrespondedbysayingthattheywouldsearchforthe
bestdealandorderfromthatsourcewhenpurchasingaluxuryproductonline.One
suggestionIwillpresentisthatluxurybrandsuse3rdpartyretailers,muchliketheGucci
examplepreviouslydescribed,inordertosatisfycustomers’wantsandneeds.Notonly
willtheyprofit,buttheycanalsoprovethemselvesasaluxuriousbrandbygivingthe
clientexactlywhattheywantandwhentheywantit.Anotherrecommendationdeals
withluxurybrandsthatarehesitantonacceptingadigitalapproachduetothehigh
expenseandlowreturnoninvestment.However,Iwanttoproposethefactthatmy
surveyrevealedthatamajorityofconsumersaremadeawareofproductsorbrandsby
socialmedia,andalsoamajorityofconsumersresearchproductsonlinebeforebuying.
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Thesestatementsprovethatastrongdigitalpresencecannotbemeasuredjustbysales
figuresbutrathershouldbemeasuredbytheinteractionandengagementtheyprovide
forconsumers.Intoday’sworlditisnolongerjustaboutprovidingqualityinperson
customerservicebutalsoaboutproperlyappealingtotheirconsumersonline.This
statementcanbeconfirmedbythemarketingdirectorofJaguarLandRoverLaura
Schwabwhenshestates,“Theimplicationformotoringbrandsisthatwinningthat
dealershipvisitrequiresengagingfirstwiththecustomeronline,andensuringthat
compellingdigitalcontentisavailable”(Anderson).Whetherconsumersaresimplythe
targetsofdigitaladvertisementsortheyareavidonlineshoppers,thefactofthematter
isthatthedigitalworldofshoppingisheretostayandluxurybrandsneedtowelcome
it.InnowayamIsuggestingthateveryluxurybrandfollowtheseexact
recommendations,ratherIamimplyingthatthedigitalworld’spresencemustbe
acceptedandappropriatemarketingstrategiesmustbeimplementedtoensurelongtermbrandsuccess.
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