Luxury Shoppers Are Skewing Younger This Holiday

While recent news of a rebound in the luxury market segment has overjoyed retailers, the facts show that the comeback may be in a very different form than we are accustomed to seeing, says Tom Jacobson, managing director of Accenture’s pricing and profit optimization practice. Rather than finding a mainstay among older, brick-and-mortar shoppers, luxury retailers should note that, continuing on last year’s trends, today’s luxury shopper is younger and savvier with a tendency to buy online and at a discount.

“While ultra-luxury retailers may still be able to play by previously well-established rules such as avoiding online sales to engender a sense of prestige, mass market luxury players must adapt. More sophisticated channel and promotional strategies are going to be critical to success,” Jacobsen said.

Luxury shoppers are skewing younger this holiday.

·While the traditional luxury goods shopper tends to be wealthier and older, age rather than income seemed to be the biggest influencer this year, with consumers ages 25-34 more likely to purchase some form of luxury gift this year. In fact, the likelihood to spend on luxury gifts declined after age 34.

As with holiday shopping overall, spending on luxury gifts is expected to be the same as last year.

·The vast majority of consumers (92 %) expect to spend the same or less on luxury gifts this holiday season than last year.

·More than a third of consumers (36 %) plan to spend less than $250 on all of their holiday gift purchases including luxury, while 34 % plan to spend more than $500 total on gifts.

The discounting of luxury goods is seen as a positive by consumers and is the largest influencer for purchasing decisions.

·70 % of consumers said that discounts are the biggest influence on their decision whether to purchase a luxury good as a holiday gift this year.

·Almost half (48 %) of consumers said that discounts and sales will also play a major role in both which luxury items they decide to buy and where they buy them.

·Price was the most important product attribute by far when choosing a luxury gift item this holiday – above quality, brand and store experience.

While discounts do play a key role in the purchasing decision, they are unlikely to cause customers to spend much more than they already planned.

·36 % of consumers still plan to spend the same amount on luxury no matter what deal they are offered. Still, among those with the highest incomes, consumers were willing to spend slightly more to get a steeply discounted luxury item.

Online is the number one place to shop for luxury gifts for the holidays.

·Online is where most consumers (26 %) will shop for luxury gifts, though the younger customers still show the greatest desire to shop online. Mass retailers (16 %) and discount stores (10 %) were the next popular shopping destinations for luxury this holiday, while specialty stores (4 %) and luxury brand stores (3 %) rounded the bottom of the list.

Most of consumers are keeping a close eye on sales during the holidays, but consumers with higher incomes are keeping a closer eye.

·While 76 % of respondents overall were actively keeping track of sales and promotions this holiday, surprisingly the study found that the likelihood to track sales grew with income level.

Lowering pricing on luxury does not lower brand perception.

·Only 1 % of consumers indicated that a deep discount would negatively impact their impression of a luxury product.