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Affluent Consumers Covet Luxury Online

Thursday May 1st, 2014 - 11:14AM

Affluent consumers are embracing e-commerce, according to a multigenerational study of consumers 21 and older in the United States. The Luxury Institute study indicated that 43.5% of consumers who had a minimum annual household income of $150,000 per year made their last luxury product purchase online, exactly the same proportion who made their last purchase in a store.

Although e-commerce engagement was general, the influences affecting a purchase demonstrated significant generational differences. The three generations studied— Millennial ranging in age from 21 to 34, Generation X, 35- to 49-year-olds, and Baby Boomer, 50 and up— gather information from brand websites, online consumer reviews, friends and family, and sales associates. However, Baby Boomers are less susceptible to advertising influence than younger shoppers.

Millennials prefer to conduct in-store research before purchasing online and are open to receiving emails or text messages from luxury brands, or even individual salespeople. Millennials engage with companies on digital platforms like social media and mobile applications more than the other two demographic groups, the study suggested.

Even as online retailer popularity has gained, however, the growth of mobile shopping in the luxury sector remains slow, the study demonstrated. The vast majority of recent online luxury purchases were completed on a computer, and only 2% made via smartphone, it observed. Affluent Millennials have been quicker to engaged in mobile luxury shopping, the study related.

"Luxury brands are still trying to understand how to capture the loyalty of affluent Millennials because that really means cultivating the next generation of consumers and keeping your brand relevant," Luxury Institute CEO Milton Pedraza said in introducing the study. "Understanding diverse shopping behaviors of different generations of wealthy consumers is essential for catering distinct marketing strategies that resonate with each of them."