Luxury consumers: types and strategies for loyalty

Through our research on The customer journey in the Mexican luxury sector (in Spanish) we have identified three types of profiles among buyers of luxury goods, based on their relationship with eCommerce:

1. Convinced: 73.1% of luxury buyers go online, at least some of the time, to make exclusive purchases. They can be further divided into three subcategories:

• Classics: usually buy from renowned retailers or from eCommerce platforms with a good reputation that inspire confidence in their buyers. Classics account for around half of the Convinced group.
• Needys: turn to internet for their luxury shopping needs because what they’re looking for is not available locally. They represent 30.9% of online buyers of luxury.
• Intrepids: buy all kinds of products online, and are happy to explore new brands or use new eCommerce platforms for categories such as fashion or travel. They are a minority group (23.3%) within luxury buyers online.

2. Reserved: 15.4% of luxury consumers purchase other goods online, but not luxury goods, for two main reasons:

• In two out three cases, buyers would only buy basic daily consumer products, such as food or books, online.
• In one of three cases, they would prefer to visit the physical store, because they enjoy the experience and they feel a physical store is more secure.

3. Distants: finally, 11.5% of respondents said they never buy online. Why? The reason is primarily based on consumer distrust.

• The main reason for not buying online is still a reluctance to give out personal information.
• Skeptics also prefer to see and touch the product before buying.
• Possible issues around shipping and refunds are also disincentives. Having a problem in the past also makes a buyer less likely to buy online; problems with fraud and delivery are often cited as negative experiences that reduce a buyer’s confidence in online shopping.

Each of these three consumer profiles requires a different digital strategy by manufacturers and brands to attract or retain every type of customer.

The journey of the Distants

Distants will look online for information before they make purchases, but they do not buy online. The data shows that if they did shop online, they would likely spend more money than other consumers.

What can brands do to change their point of view?

1. Strengthen their SEO strategies. 76.5% of Distants look for product information online. They will search around for the best price before purchasing, and as a group, they’re the most likely to use price comparison sites.
2. They’re influenced by what they read online and by personal recommendations. Brands must strengthen focus on both these areas in their communication strategy.
3. This group believes that all advertising formats are intrusive, and they are more likely to install adblockers. Do not try to make them see what they do not want to see. Featured Google searches, promoted content on social media; yes. Banners, pre-roll ads, pop-ups; no.
4. Celebrities are not the best way to convince Distants to buy your product. Distants don’t often follow celebrities, and they are skeptical of celebrity endorsements.
5. Distants visit physical stores more often than any other group, and they appreciate digital innovation in store; product customisation, interactive testers, geo-promotions… show Distants that digital is cool!
6. More than half, even in exchange for promotions and discounts, are reluctant to reveal personal information. When asking these consumers for personal information, don’t overdo it.

The journey of the Reserved

The Reserved are big luxury spenders. While they shop online, they won’t shop online for luxury goods. How do we convince them to do so?

1. They enjoy the classics; the ads and articles they read in print media affect them more than the average consumer. Figure out what they’re reading, and then let them know about the benefits of e-commerce.
2. They are also independent and wary of big business. Tools that allow them to enhance their autonomy are more useful than recommendations.
3. They are the group most willing to pay higher prices for socially responsible brands. Take this into account in your CSR strategy.
4. They prefer tablets. Don’t forget that when thinking about sales channels and formats.
5. They like to follow celebrities, first on Facebook, then Twitter and then Instagram. The order is important.
6. More than any other consumer group, they appreciate easy and intuitive web design. Increase your budget for UX.
7. Recall that the Reserved group are the biggest spenders. Therefore, they are also the most concerned with payment security. Make it known that your website is entirely secure.
8. Personalised recommendations are most useful when targeting this consumer group. Use email for this purpose.

The journey of the Convinced

They already buy online, and they’re already buying luxury goods online; they’re an eCommerce dream come true. Be careful not to lose them. The challenge is to get them to spend more on less technologically advanced categories.

1. They are intensive information-seekers, and the most influenced by online articles and reviews. Have you ever heard of branded content?
2. Publications on social networks and corporate blogs are the second most influential source of information. Get rid of that fellow trainee and hire a great community manager.
3. They are the most likely to follow celebrities. And the least comfortable with promoted publications integrated into social networks. Keep this in mind when choosing how to talk about your product.
4. They love digital, in store and online. Don’t you think an iPad would be great next positioned next to that luxury watch exhibitor?
5. They are more open to listening just before they make a purchase. They take into account the opinions of other customers. Make your website participatory.
6. If incentivised, the Convinced group are most willing to cede their personal data. Make the most of this.

Access the full study here: The customer journey in the Mexican luxury sector (in Spanish)