Welcome!
Luxury Consumer Behavior
Dr. Satyendra Singh
Professor, Marketing & International Business
University of Winnipeg, CANADA
https://sites.google.com/view/drsatsingh
s.singh@uwinnipeg.ca
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Luxury Consumers…
+1500 🡪 # of billionaire worldwide. ↑ 7% more billionaires every year
$300b/year (People spend on luxury). ↑ 20% sales/year. 200-300 luxury brands
Excluding home, car…
Affluent (.1m – 1m), HNWI (1-5m), HNWII (5-50m), HNWIII Ultra (>50m)
About 15m HNWI: 4m USA, 3m EU, 3m Asia-Pacific, 2m Japan, 1m Germany, .5m/UK/China/Latin America, .4m Middle East, .1m Africa
Luxury depends on wealth ($.5m/yr) affluent $.2m/yr) and status
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Luxury: wealth and status
Discreet
Authentic
French
Small logo
Russians
Emerging
Markets
CIVETS
Niche
Creators
British
Heritage
Need to prove
Counterfeit
Poor countries
Big logo
HI Status
HI Wealth
LO Status
LO Wealth
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Luxury consumer behavior
Traditional – aristocratic, high status (may be transferred)
Loyal to single brand,…buy established brand 🡪 Hermes, Dior,…
Modern – high status
Not brand loyal, or loyal to one brand,…
Smart, educated, savvy discerning consumers
Parent and children dress alike 🡪 ↓ gap
Cosmetics, surgery,…
Luxury market cannot be segmented
40s, 50s, 60s does not matter
Group pressure > individual taste
↑ group pressure in Japan, France, Spain
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Luxury: Design vs. Modernity
Lamborghini
Ferrari
Aston-Martin
???
You decide
BMW (???)
Mercedes
Lexus
Morgan
Bentley
Rolls Royce
Modern
Art/design
Traditional
Comfort
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Types of consumers
Purchaser
They’ve knowledge to buy products
Browser
For entertainment
May come back 🡪 need more time to make decision
Opinion leader
Meeting point 🡪 Sephora store (10,000 visits weekend)
We display our history and heritage
That’s why we have museum section in luxury stores
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Consumer behaviour: in-store and online
Time spent
Women (W) + W = 8 min
W + child = 7 min
W alone = 5 min
W + Man = 4 min
Stealing 🡪 33% by customers, 66% by staff
Always take receipt 🡪 staff makes fake returns
RFID 🡪 Radio Frequency Identification
Debate 🡪 Luxury cannot be sold online
Online 🡪 Pull consumers to store; Offline 🡪 sales people use knowledge for $
Prada 🡪 www for info only
Some brands sale limited (eg old) products online.
Others sale through luxury e-stores
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Consumer attitude towards luxury products? (10-pt scale)
China (8.2), Mexico (8.0), India/UK (7.3), USA = 6.8, S. Korea 6.4
Germany = 6.1 🡪 difficult relationship with luxury
Italy = 6.1 and France = 5.7 🡪 Catholic countries
Helping poor and controlling desire is important
Japan = 5.6 🡪 Symbolic revenge of WWII
Not liking may not mean 🡪 customer’ll not buy luxury products
Indian luxury market is very difficult to crack. Indians have their own luxury standards
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Luxury preferences - global
EU (Germany, Italy, Spain, UK). 25% of population +60; Older people in Europe than USA
Italy: Inspired by art, Flashy watches (mechanical), curves in jewellery
German: simple watches (Quartz) versus Switzerland (no heartless watches)
Japan: like cosmetics/RTW, no perfumes. Hides body odour. Encroaches personal space
India: loves gold (versus Mikimoto). Young educated population. To-be-served culture. No driving
HK/SP/Thailand/Taiwan: RTW, very young people, Stylish, sleek, brand visibility is important
Africa: love anything expensive or luxury. Nigeria. South Africa. Senegal
China: largest luxury market. Silk. Wine, whisky, BMW. cosmetics 🡪 ↑ whitening products
Russia: love luxury (banned before). Flashy. Moscow alone spends $2b/year on luxury
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Fake luxury products
Counterfeit industry is x4 luxury industry!!
Counterfeit. 100% copy. deceives customers as real
Pirated. Copied, customers know it
Imitation. Not 100% identical, customers know it
Replica. Could be real, made by disgruntled legitimate craftsman through some connection
France: criminal activities, buyer and sellerH
If caught, 2 years in jail
LV sued Carrefour for $40,000, Shanghai store
Hermes post warnings on Internet
LV, Burberry,… and police raid fake shops
LV spends $15m-$20m/year to combat fake luxury
Even fake USA embassy in Ghana!
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How to spot fake LV?
Questions?�s.singh@uwinnipeg.ca