SOURCE: Unity Marketing

November 30, 2007 07:50 ET

Social Networking Is Not Just for Kids Anymore -- New Study Finds Even Luxury Consumers Do It

Unity Marketing Survey of Luxury Consumers and Their Use of the Internet Underscores Its Vital Role as a Resource for Luxury Purchases

STEVENS, PA--(Marketwire - November 30, 2007) - Think social networking sites are just for teens and tweens who post party photos and lists of favorite bands? Think again. A new generation is flocking to Internet-based social networking sites -- and they may well be the adult consumers most likely to make a luxury purchase.

Over 40 percent of luxury consumers visited a social networking site, such as Facebook, YouTube, MySpace, etc. in the past three months. This is the most surprising finding of a new survey by Unity Marketing about how luxury consumers are using the Internet. It is based upon a survey conducted in October among 1,074 affluent consumers who made at least one luxury purchase in the past three months (average income $150,200 and age 43.6 years).

"This study shows the method behind Microsoft's 'madness' in paying $240 million for only 1.6 percent of Facebook. It isn't just kids visiting the social networking sites like Facebook anymore. Even middle-aged affluent consumers are networking online," says Pam Danziger, president of Unity Marketing and author of "Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience." "Young affluents, those 40 years and under, were the most active social networkers, but even one-third of the over 40 year old consumers reported visiting a social networking site."

Amazon.com ranks as luxury consumers' favorite website

When it comes to their favorite websites for shopping, Amazon.com with their wide range of product offerings gets top billing. Following Amazon.com in the ranking was eBay (#2), Nordstrom.com (#3), Macys.com and Overstock.com (tied #4) and Neimanmarcus.com (#5). A complete list of the websites named in the survey is available here http://www.unitymarketingonline.com/cms_luxury/luxury/luxury3/Luxury_Tracking_3Q2007.php.

Internet exerts a powerful influence on luxury consumers' purchases

The research study also found that over half (52 percent) of the luxury consumers of home luxury products and 46 percent of buyers of luxury fashion, fashion accessories, cosmetics, jewelry and watches used the Internet in support of their recent luxury purchases.

"The Internet has a powerful influence on luxury consumers in terms of their spending. For example, those customers who used the Internet for home luxury purchases spent 11 percent more on their homes, while those who used the Internet for their personal luxury purchases spent 12.5 percent more on average buying fashion, jewelry, watches and cosmetic products.

"They used the Internet both to research purchases, especially to compare prices and read other customers' reviews, as well as to make purchases. The research also shows that they will visit a retailers' website to 'browse' before they head out to the store. The lesson is that luxury marketers and retailers that offer their customers a website get a significant return on investment in terms of more spending," Danziger says.

Many websites give luxury consumers what they are hankering for

When it comes to the features that luxury consumers value most in the Internet, the convenience of shopping at home is right at the top of the list, along with the wide selection of merchandise available online. They also are passionate about the tools that the Internet gives them to compare prices and evaluate product features. It saves them time and makes shopping less of a chore.

The many pluses of Internet shopping make up for any minor annoyances and inconveniences, such as shipping and handling charges and delays in receiving the merchandise. Other issues, however, are more of a hindrance to luxury shoppers. Some 35 percent of luxury consumers are very discouraged from using the Internet because of difficulties in returns and exchanges. And 21 percent are uneasy about making big ticket purchases, for example kitchen appliances and jewelry, online.

"When asked what features were most important for a luxury shopping site to offer these luxury consumers, they were adamant about three features -- in-depth product information and specifications, detailed product pictures and a flexible return policy. They were far less concerned with company or brand news, lifestyle content or a store locator among other features," Danziger says.

Luxury travelers make the absolute most of the Internet

Luxury travel is the one category where the Internet has most penetrated the luxury market. Commenting on the research, Danziger says, "Luxury consumers are maxing out the capabilities of the Internet in terms of their luxury travel. Over 90 percent of luxury consumers used the Internet in support of their travel planning in the third quarter. Over 80 percent made travel reservations online and researched travel destinations. More than half (56 percent) visited a website to see what other travelers have to say about their destination."

Danziger concludes, "This study shows just how important the Internet is as a resource in support of the luxury consumers' lifestyle. Its value as a shopping venue is without question, but for marketers and retailers its role in influencing and informing the shopper cannot be ignored. So when making investment decisions pertaining to the Internet, marketers need to carefully measure its power in advertising, promoting and building the company's brand and not just take into account the cash flow resulting directly from Internet purchases."

For media: Charts, tables and graphs are available on request. http://www.unitymarketingonline.com/cms_luxury/luxury/luxury3/Luxury_Tracking_3Q2007.php

About Pam Danziger and Unity Marketing

Pamela N. Danziger is an internationally recognized expert specializing in consumer insights, especially for marketers and retailers that sell luxury goods and experiences to the masses or the "classes." She is president of Unity Marketing, a marketing consulting firm she founded in 1992.

Advising such clients as PPR, Diageo, Swarovski, Waterford/Wedgwood, Lenox, Prudential Fine Homes, GM, Orient-Express Hotels, The World Gold Council, and The Conference Board , Danziger taps consumer psychology to help clients navigate and master the changing luxury consumer marketplace.

In recognition of her groundbreaking work in the luxury consumer market, Pam received the Global Luxury Award presented by Harper's Bazaar for top luxury industry achievers in 2007.

Her latest book is "Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience," published by Kaplan Publishing in October 2006. Her other books include "Let Them Eat Cake: Marketing Luxury to the Masses -- as well as the Classes," (Dearborn Trade Publishing, $27, hardcover) and "Why People Buy Things They Don't Need: Understanding and Predicting Consumer Behavior" (Chicago: Dearborn Trade Publishing, 2004).

Contact Information

  • Contact:
    Pam Danziger
    (717) 336-1600