SOURCE: Luxury Institute

March 26, 2007 11:00 ET

The Wealthy on the Web: Luxury Institute Survey Shows Rich Americans Use Internet to Research and Buy but Lack of Customer-Centricity Is Major Obstacle

NEW YORK, NY -- (MARKET WIRE) -- March 26, 2007 -- Elegant boutiques and offices staffed by polite and informed sales personnel are important to the selling experience for luxury goods and services firms, but easy-to-navigate websites that provide product information and the ability to purchase all of the inventory sold offline are becoming just as important.

According to a new survey by the independent New York City-based Luxury Institute, 96 percent of Americans with annual incomes of $150,000+ buy products and services online; 55 do so frequently. Nearly all wealthy consumers (99 percent) use the Internet to research before they buy; two-thirds conduct online research frequently.

"The Internet is the channel the wealthy prefer when buying several categories of goods and services," said Milton Pedraza, CEO of the Luxury institute. "Sixty-nine percent make hotel and resort reservations mostly on the Internet. Ironically, the only remaining obstacle preventing wealthy consumers from purchasing a multitude of luxury products and services on the Internet appears to be the lack of customer-centricity of some luxury firms."

Illustrative of how the Internet has grown in importance as a sales channel for luxury goods marketing, more than half of the wealthy (53 percent) prefer to make purchases of women's apparel online; 43 percent prefer the Internet for buying men's apparel.

What works for marketers in attracting the wealthy to their sites? Effective search engine marketing strategies produce the biggest payoff (Google and Yahoo! are the top sites visited by the wealthy). Nearly three-fourths (73 percent) of the wealthy say that finding companies through Internet search is an effective way to create a positive impression. Just 30 percent, however, found ads on a search engine site an effective marketing technique. Surprisingly, finding ads in media is the second most popular method of creating a positive impression and getting the wealthy to buy -- 10 percent of the wealthy say this is an effective method, 43 percent say it's somewhat effective. Thirty-nine percent say free online newsletters are effective, while one-third respond positively to emails with special offers.

Once wealthy consumers arrive at a website, privacy and security are of chief importance, followed closely by ease of navigation. Forty percent find easy-to-navigate websites very effective at creating a positive impression and leading them to purchase; 37 percent cite ease of navigation as somewhat effective. Wealthy women are significantly more likely than men (46 percent to 35 percent) to find easy navigation very effective.

Useful content, and a liberal return policy, are highly important, as is the ability to track shipments. Companies should refrain from using pop-up or banner ads on-site as they are a turnoff for the wealthy, especially at the highest levels of income and net worth. What's not important? Having a physical location, an attribute the wealthy rate 4.8 (1-10 scale).

Full results of the survey, and examples of how the wealthy are embracing Web 2.0, are available online exclusively to members of the Luxury Board (, the Luxury Institute's online community for global luxury professionals.

About the Luxury Institute

The Luxury Institute is the uniquely independent and impartial ratings and research institution that is the trusted and respected voice of the high net worth consumer. The Institute provides a portfolio of proprietary publications and research that guides and educates high net-worth individuals and the companies that cater to them on leading edge trends, high net worth consumer rankings and ratings of luxury brands, and best practices. The Luxury Institute also operates the Luxury Board (, the world's first global, membership-based online community for luxury goods and services executives, professionals and entrepreneurs To reach the Luxury Institute, please call 646-792-2669 or go to

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