Luxury brands struggle to retain approximately 50% of their top shoppers every year, according to research from Epsilon and The Luxury Institute. In fact, these brands can lose up to 90% their customers in any given year.
The primary reason consumers decide to no longer shop with a luxury brand is not the product, but a rude or ineffective salesperson, according to the report. Only 10% to 15% of luxury customers state that they have a first-name relationship with a sales professional.
True Luxury Shoppers Vs. Stereotypes
Although luxury brands believe their customers are 45-year-old females with more than $1 million in wealth resources, the archetype for a luxury shopper is quite different.
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“True Luxe” shoppers, or those with the means to purchase luxury items at will without financial, are predominantly males (57.5%) between ages 25 and 44. These shoppers are likely to be of Asian and Middle Eastern descent with a net worth of more than $500,000.
While 13.8% of shoppers with a net worth of more than $1 million primarily spend their money on contemporary décor and gifts, 10.5% mostly purchase mid-ticket female apparel.
In addition to “True Luxe” shoppers, the report placed luxury shoppers into three categories:
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The “Aspriational Shopper,” who desires to own pieces from a brand, but doesn’t have the means to do so;
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The “Moments of Wealth” shopper, who saves money for a specific item but doesn’t purchase frequently from a brand; and
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The “Dressed for the Part” shopper, who purchases luxury items to give off the appearance of living a luxury lifestyle, but doesn’t have the resources to be a true luxury buyer.
Although luxury consumers research products online more than 50% of the time, online shopping accounts for less than one quarter of sales for luxury retail brands, according to the report. Consumers, overall, want to see the product in person before making a purchase, and crave the brand experience that can only be provided in a store.
Click here to access the full report.
