By Erin Shea

Only 3 percent of affluent women and 9 percent of affluent men purchase designer apparel through their mobile device, according to new research by the American Affluence Research Center.

The “Affluent Marketing Tracking Study No. 23” found that half of affluent consumers who are purchasing designer apparel are making purchases online through a computer. Since both men and women are buying online, luxury marketers need to make sure their ecommerce sites are up to par.

“The greater number of people buying online versus mobile devices may be the result of online being more appropriate for a considered purchase, while mobile may be favored for more spontaneous and less considered purchases as well as for comparison shopping while in a store,” said Ron Kurtz, president of the American Affluence Research Center, Atlanta.

The American Affluence Research Center surveyed the wealthiest 10 percent of U.S. households based on net worth for this supplement to the Spring 2013 Affluent Market Tracking Study.

Buying online
During the last year, 43 percent of affluent women and 20 percent of affluent men said they purchased designer apparel.

Affluent women seem to be comfortable making purchases online, since 51 percent report buying designer apparel online through a computer, while 44 percent made purchases in-store, 3 percent used a mobile device and another 3 percent made the purchase by phone.

Affluent men have similar designer apparel purchasing habits.

Half of affluent men purchased apparel online via a computer, 39 percent were made in-store, 9 percent were made by a mobile device and 2 percent made purchases by phone.

However, affluent consumers are also purchasing non-designer apparel. Sixty percent of affluent women and 26 percent of affluent men report purchasing non-designer apparel products.

Also, few affluent consumers researched a product online without making a purchase.

Thirteen percent of affluent consumers researched designer apparel online and 9 percent researched non-designer apparel and made no purchase. For both, women are more likely than men to do research online and not make a purchase.

Overall, the data shows that affluent consumers are buying all types of apparel products online.

“It was interesting to see that women are more likely than men to research and purchase apparel online,” Mr. Kurtz said.

“It was also interesting that the source of purchases had about the same profile or pattern for designer apparel as for non-designer apparel,” he said.

Stepping up ecommerce
Since affluent consumers are making most of their apparel purchases online, luxury marketers need to make sure that their ecommerce sites are able to take consumers easily through their purchase journey.

Many luxury marketers have recently revamped their Web sites to help online shoppers make purchases. This can be especially helpful for consumers who are not nearby retail location.

For instance, Italian label Missoni launched its Web site at the end of March to offer ecommerce and brand content on a signal platform just as other fashion houses are doing the same. The site opens with a runway video taking up the majority of the screen while more content is offered below the fold.

Also, menswear label Ermenegildo Zegna overhauled its digital strategy to combine content and commerce and offer a seamless Web experience to consumers in all global markets.

The brand reformatted its Web site to act as a hub for all brand happenings where consumers can access collections, ecommerce, company news and style guides. Zegna launched the Web site with a giveaway of a black satin bow tie accompanied by a video tutorial to the first 100 customers.

Luxury marketers should be aware that consumers are making online purchases and should make their ecommerce sites appealing to gain more transactions.

“Luxury marketers need to be responsive to the increasing orientation of affluent consumers to research and purchase online,” Mr. Kurtz said.

By Erin Shea

Bentley Motors is showcasing its racing history with six limited-edition models that are featured on a new microsite.

Each of the models is inspired by a driver from the British automaker’s six victories at the 24 Hours of Le Mans race in France. Bentley created a microsite dedicated to the limited-edition models that tells its history with the Le Mans race and offers detailed information on each vehicle.

“The special editions of these models and the story behind them will reinforce the fact that Bentley provides both performance and luxury in all of its models,” said Ron Kurtz, president of the American Affluence Research Center, Atlanta.

“In addition, the limited number and distinctive features of these special editions will add to the prestige of owning one,” he said.

“These special models give Bentley content for media publicity and communications in various forms to its past and potential customers.”

Mr. Kurtz is not affiliated with Bentley, but agreed to comment as an industry expert.

Bentley did not respond before press deadline.

Winners’ circle
Bentley chose to launch the vehicles in 2013 because this year marks the 90th anniversary of the race and the 10th anniversary of Bentley’s victory in 2003.

The Bentley racing team was a part of the inaugural 24 Hours of Le Mans race in 1923 and was the only British entry that year. However, the automaker placed fourth that year.

Bentley won the endurance race in 1924, 1927, 1928, 1929, 1930 and 2003.

The automaker is creating six vehicles dedicated to each victory. The special-edition vehicles will be available in the Mulsanne model and the Continental model.

The vehicles, which are named after the winning drivers, are John Duff, Dudley Benjafield, Woolf Barnato, Tim Birkin, Glen Kidston and Guy Smith.

Each vehicle will have a Le Mans-edition numbered badge, a Le Mans-edition clock face, embroidered Le Mans badge on each headrest, tread plates with the edition name, Le Mans-edition wheels and specific interior veneers and exterior colors.

Only 48 of each vehicle edition will be created. They will be available exclusively in North America.

Bentley created a microsite to showcase the vehicles that plays a 65-second introductory video, which gives an overview of Bentley’s history with the Le Mans race.

The microsite can be accessed at http://lemansedition.bentleymotors.com.

In addition, the microsite shows the details of each vehicle, a timeline of Bentley’s wins at Le Mans and the complete story of the history of Bentley at Le Mans.

A good year
Other automakers have promoted special-edition vehicles in 2013 to celebrate milestones.

For instance, British automaker Rolls-Royce Motor Cars is marketing a special collection of vehicles to celebrate 10 years since it started production at its headquarters in Goodwood, England.

The model line is titled “Home of Rolls-Royce Collection” and was designed by the automaker’s Bespoke team. Rolls-Royce is celebrating this anniversary throughout the year and plans to host exclusive events during 2013.

Also, German automaker Porsche honored its 5 million Facebook fans by letting them collaborate to design a 911 Carrera 4S vehicle.

Porsche announced that it hit the 5 million fan milestone Jan. 31 by updating its cover image to say “Thank you for 5 million likes.”

To celebrate, Porsche launched an interactive campaign on a Facebook application where fans were able to vote on the characteristics of a 911 Carrera 4S which it seems that Porsche will produce.

Bentley is likely creating a highly coveted product by only releasing a very limited number of the Le Mans vehicles.

“By releasing only a limited number of these vehicles, Bentley is creating an additional element of exclusivity that adds to the prestige of owning one,” Mr. Kurtz said.

By Andrew Sheivachman

While the affluent are spending more, they are less interested in cruising than ever before.

This is the message based on data from the American Affluence Research Center’s Spring 2013 report, a bi-annual survey of the wealthiest 10% of U.S. households.

Travel Market Report spoke with Ron Kurtz, president and founder of the American Affluence Research Center, to find out more about how the spending habits of affluent consumers will influence travel agents in 2013.

What are the major travel trends from your data?
Kurtz: Plans to cruise during the next year went down; we’re at a low point in terms of the historical readings we’ve had for planning a cruise. It may have been because of negative publicity from Carnival malfunctions. Some travel agents are saying there is some weakness in Wave Season bookings. There was also a sizable undecided group who haven’t made a decision about planning a cruise.

Are affluent consumers traveling more or less than in previous years?
Kurtz: Plans for the affluent to change their spending on domestic vacations were slightly positive, and plans to change spending for international vacations were basically in neutral territory. So changes in spending seem to be a relatively positive factor among the affluent.

Are affluent travelers booking online or using travel agents?
Kurtz: We had some questions about bookings and online research. When we compared these questions 10 years ago in 2003, we didn’t see much change in research being done online. We saw a very sizable increase in bookings being made online. While the affluent were already comfortable researching online, they’ve become much more comfortable making purchases online.

Overall, will wealthier Americans continue to spend on leisure activities?
Kurtz: People are saying they’ll maintain their spending level; we’re not seeing big changes either way. The results are similar to what we found in our Fall 2012 survey, and the main reason for that is most respondents felt they were going to be maintaining or improving their net worth. Net worth is usually a better indicator of wealth than income, and 75% said their net worth after taxes will be the same or a little higher.

By Tricia Carr

The majority of U.S. affluent consumers book hotel stays online, but mobile reservations are becoming more common among younger consumers, according to new research by the American Affluence Research Center.

Eighty percent of consumers among the wealthiest 10 percent of U.S. households book their hotel stays for vacations online. Since 53 percent of this sample owns two or more mobile devices, luxury hotel marketers should be sure that their reservation sites are optimized across desktop, tablets and smartphones.

“Booking via a mobile device will certainly increase with the growth in ownership and usage of such devices,” said Ron Kurtz, president of the American Affluence Research Center, Atlanta.

“However, mobile devices may be more appropriate for last-minute bookings and rearrangement of plans while traveling,” he said.

The American Affluence Research Center surveyed the wealthiest 10 percent of U.S. households based on net worth for this supplement to the Spring 2013 Affluent Market Tracking Study.

It all starts online
Seventy-four percent of respondents in the Affluent Market Tracking Study booked hotel nights for vacation in the past 12 months. Therefore, the survey uncovered that an estimated 8.4 million households booked vacation hotel nights online in the past year.

Also, 76 percent of respondents booked vacation air travel online in the last 12 months.

While 80 percent of respondents booked hotels online, 89 percent said that they do online research prior to booking a hotel for vacation.

The likelihood of booking vacation hotel stays online was about the same among all age, gender and income groups.

Yet, 64 percent of respondents that fall into to the wealthiest one percentile in the United States booked vacation travel online.

Some other hotel booking preferences emerged in certain groups as well.

For example, 18 percent of respondents age 60 and over, 18 percent of female respondents, 17 percent of respondents with an income of more than $200,000 and 17 percent of respondents in the top five percentile of net worth booked hotel stays by phone.

Notably, 12 percent of respondents under the age of 50 made hotel reservations for vacation on their mobile device.

In all, 5 percent of all surveyed booked hotels via their mobile device.

Hotel habits
Many hotel marketers are coming to the realization that the majority of their bookings are taking place online.

Therefore, they are optimizing their reservation system for consumer use across computers, tablets and smartphones.

For example, The Leading Hotels of the World refreshed its digital strategy in March with a new Web site that offers content to help consumers plan their trip along with a simplified booking platform.

The initial focus was the desktop and tablet version of the site so that it seamlessly adapts based on the device used. A smartphone-enabled version of the site will launch later this year.

In addition, Fairmont Hotels & Resorts rolled out updates to its desktop site so that its features are optimized and touch-enabled for tablet devices.

The hotel brand saw an increase in tablet usage – up more than 300 percent in 2012 – as well as an increase in time spent on its sites. Therefore, Fairmont catered to the digital habits of its customers through the first phase of digital renovations.

Indeed, a Waldorf Astoria executive who spoke at the American Express Publishing Luxury Summit 2013 said that luxury marketers should focus all technology-driven efforts on leveraging service above all else.

“Luxury hotels need to be sure they are presenting their product features and prices effectively and in a user-friendly manner with easy procedures for making a booking in order to capitalize on this behavior and to be competitive,” Mr. Kurtz said.

In a recent survey by the American Affluence Research Center of the wealthiest 10% of US households, online booking by computer was the most frequently mentioned method for buying a cruise among 54% of the affluent consumers who had cruised during the prior 12 months.

By Erin Shea

Rolls-Royce Motor Cars is targeting affluent Harrods shoppers with window displays at the London department store to celebrate the British debut of the Wraith vehicle.

This display marks the first time that the British automaker has put its vehicles on display in a retailer’s windows. The display will likely give both brands additional exposure since automakers typically do not advertise in retail windows.

“Both Rolls-Royce and Harrods represent British luxury on the global stage, so it made perfect sense to showcase the most powerful and dramatic Rolls-Royce vehicle yet in Harrods famous window display,” said Emily Dungey, lifestyle communications and event manager at Rolls-Royce Motor Cars, Goodwood, West Sussex, England.

Making a scene
Rolls-Royce is taking over Harrods windows for one week to celebrate the British debut of its Wraith vehicle April 29.

The vehicle that is on display is painted Midnight Sapphire with an upper two-tone paint color of Cassiopeia Silver.

The interior has an Arctic White and navy leather scheme with embroidered Rolls-Royce logo in the headrests and Canadel Paneling in Santos Palisander.

This model also features the starlight headliner that glows from hundreds of star-like lights in the roof lining, which can be turned on with the press of a button.

Since it is not common for vehicles to be on display in retail windows, this effort will likely gain much attention and draw traffic to Harrods.

“This Rolls-Royce display is a great way for Harrods to attract media attention and to draw traffic to its store,” said Ron Kurtz, president of the American Affluence Research Center, Atlanta.

“Displaying a car like this is unique for a department store and there is a lot of consumer excitement and curiosity about the new Wraith model,” he said.

Prime real estate
The windows at Harrods are coveted by many luxury marketers since having such a prominent placement can give brands additional exposure.

Other luxury brands have used the prime location to show off their products.

For instance, Christian Dior recently wrapped up its month-long campaign within the walls of the London department store during which it took over Harrods’ windows and offered visitors a pop-up store, exhibit, beauty promotions and brand-themed eats.

Luxury brands can potentially benefit from a retail partnership similar to this one as long as the two parties can work together seamlessly and localize the shopping experience.

Also, Harrods partnered with Disney to create the 2012 Christmas window display that showed designer dresses inspired by princess characters as well as a dedicated in-store shopping section.

Harrods’ Knightsbridge Road window displays featured Disney princess dresses designed by fashion houses such as Oscar de la Renta, Versace and Elie Saab.

Without doubt Rolls-Royce and Harrods will benefit from the additional attention surrounding their unique partnership.

“Both brands benefit by being associated with the other, as both have an image of quality, luxury and prestige that is reinforced by their collaboration,” Mr. Kurtz said.

“Both brands also benefit by the media and consumer attention produced by such a promotion,” he said.

By Robert Frank

The consumer economy may look weak. But the affluent and wealthy consumers are ramping up their spending – and that could help drive the broader economy this year.

Two new studies show that wealthier consumers plan to increase their spending despite higher taxes and a generally skeptical view of economic growth and government.

A study from the American Affluence Research Center looked at the top 10 percent of consumers by income who account for more than half of consumer spending. It found that the majority of them plan to spend the same or more in 2013 as they did in 2012.

A separate survey from the Harrison Group and American Express Publishing found among the top 10 percent of earners, 25 percent plan to spend more on luxury this year – up from 15 percent last year. Among the top one percent, nearly a third plan to spend more, up from 21 percent last year.

The main reason: rising stocks, better incomes and more job security.

While the wealthy remain fairly pessimistic about the overall economy and country, they are increasingly bullish on their own fortunes and finances. Fully 55 percent said their household assets have improved, while 41 percent ay their incomes are higher.

About two thirds say the performance of the national government is worse than last year and more than half say America’s reputation in the world is worse.

Jim Taylor, vice chairman of the Harrison Group, said that the affluent have high savings rates and generally feel insulated from the problems of the broader economy.

“When you look at their balance sheets, they’re in the black and looking very robust,” he said.

That doesn’t mean, however, that the wealthy are throwing money around with reckless abandon. For many, memories of the recession still linger. Harrison Group found that today’s affluent consumers come in two species: “worth dominant” consumers and “deal dominant” consumers. Jim Taylor, vice chairman of Harrison Group, said that “worth” consumers buy based on quality, craftsmanship and service and are expected to spend $58 billion on luxuries this year.

The “deals” consumers have been shaped by the recession and are looking for discounts. Taylor said they are driven by resourcefulness, self-reliance and a deep sense of financial responsibility.

“The lessons learned from the recession continue to dominate purchasing strategies in some of the country’s most successful households,” Taylor said. “They’re not going back to unreasonable self-indulgence.”

By Erin Shea

Eighty percent of affluent consumers own at least one type of mobile device and more than 53 percent own two or more, according to a new study by the American Affluence Research Center.

The “Spring 2013 Affluent Market Tracking Study” found that affluent consumers enjoy being connected online and the consumers who research products online are more likely to purchase them. This means that luxury marketers should increase their online and mobile presence to keep up with their connected target consumers.

“Mobile devices – both smartphones and tablets – play many roles for affluent consumers,” said Ron Kurtz, president of the American Affluence Research Center, Atlanta.

“Mobile devices are a means of communication in various forms, a source of entertainment, a source of knowledge, a convenience for research and purchases of products, and a place to store data, photos and videos,” he said.

“Mobile offers great potential as a relatively low-cost and effective method for communicating with consumers, and in some situations, it can be an enabler of sales.”

The Spring 2013 Affluent Market Tracking Study is based on a projectable national sample of 463 respondents representative of United States households with a minimum of $800,000 net worth. The respondents reported an average income of $309,000 per year and average net worth of $3.1 million. The average value of their primary residence is $1.2 million.

Staying connected
Out of those respondents who own smartphones, the iPhone was named more than twice as often as the combined total of Android, BlackBerry and other devices.

For those who own tablets, the iPad was named five times more than the combined total of Android tablets and other brands.

The affluent consumers who own two or more mobile devices are most likely males under age 59 with an annual income of more than $200,000.

Even though affluent consumers are very connected through mobile devices, luxury marketers should consider their target audience’s goals and their products before jumping into mobile-commerce efforts.

“The importance of mobile to marketers depends on many factors, including the type of product, the frequency of purchase of the product, the price points of the product, whether the product is a highly considered or researched purchase and the type of relationship that exists between the business and the consumer,” Mr. Kurtz said.

“Luxury marketers can always improve their mobile efforts by being responsive to change in consumer expectations, technology and actions of competitors,” he said.

In addition, affluent consumers are also connecting through social media and the Internet.

Seventy-two percent of affluent consumers who have access to the Internet regularly participate in social media. Most of these consumers are active on Facebook or LinkedIn.

Out of these consumers, 47 percent subscribe to receive regular communications from a marketer.

Also, 88 percent of these consumers said they went online to research or purchase a product in the last year.

The number of consumer purchases made in-store during the past year is approximately the same as the number of purchases made online via a computer in the past year.

The study also found that when consumers did online research, they were more likely to make a purchase.

Looking forward
Additionally, the new Affluent Market Tracking Study found that affluent consumers are optimistic about their future and intend on spending more in the near future.

More than 75 percent of affluent consumers expect their net worth to be the same or higher in a year’s time, while 60 percent expect their income to be the same or higher.

Also, affluent consumers are more optimistic about the future than the general public.

“Most of the affluent will maintain their spending despite higher income taxes and some concern about business conditions and the economy,” Mr. Kurtz said.

“This is good news for businesses marketing to the affluent and represents a more positive attitude than that of the general public, as evidenced by the Conference Board’s Consumer Confidence Index, the weekly Gallup Economic Confidence research, and other research of the general public,” he said.

“It is a good contrast with the overall .4 percent decline in total retail spending reported by the Commerce Department for March.”

This will benefit luxury marketers since their target audience is likely to continue spending.

“The continued spending of the affluent is good news for luxury marketers, who should continue to focus their marketing efforts on the consumers who can appreciate and afford their products,” Mr. Kurtz said.

In a March survey of the wealthiest 10% of U.S. households, the American Affluence Research Center found that intentions to cruise during the next 12 months had fallen to a record low of 11% of the respondents, down from 14% in the Fall 2012 survey.

The new reading compares to a high of 22% in the Fall 2007 survey and the prior record lows of 12% recorded in the Spring 2009 and Fall 2010 surveys. The studies have been conducted twice yearly since 2002 by the American Affluence Research Center.

At 11% of a population of 11.4 million households, the estimated number of cruise buyers is 1.3 million households or 2.6 million total cruisers over the next 12 months. This would represent over 20% of the North American market. In addition, about one million additional potential cruisers say they have not yet made a decision.

As the survey was conducted in March, it is likely that the decline in cruise plans was at least partially attributable to the negative media coverage of the Carnival Triumph incident.

The Affluent Market Tracking Study #23, published by the American Affluence Research Center, is based on 463 survey participants who have an average annual household income of $309,000, an average primary residence value of $1.2 million, an average net worth of $3.1 million, and average investable assets of $1.8 million.

By Jeff Miller

In-Store Jewelry Purchases Remain the Norm

The American Affluence Research Center released its annual spring affluent household market tracking study, which measured the mood, online tools and spending habits of the wealthiest 10 percent of U.S. households that in total account for almost half of all consumer spending.  The proprietary report also provided social media interaction trends, spending intentions and the impact of mobile devices for the year ahead. 

In this spring survey, affluent consumers confirmed they will maintain spending levels despite expecting lower income due to higher taxes, according to American Affluence Research Center. Nonetheless, even stable spending from affluent households is good news for businesses that target these affluent consumers, according to Ron Kurtz, the president of The Kurtz Group, the parent of American Affluence Research Center.

Survey participants had a net worth of at least $800,000, representing the wealthiest 11.4 million U.S. households. The average annual income of respondents was $309,000,  average net worth was $3.1 million and average value of a primary residence was $1.2 million. The survey measured past purchases and future intentions of affluent households for 17 products, including jewelry, travel, furnishings, appliances, apparel and services such as dining, recreation and charities.

Specifically for the fine jewelry and watches product category, American Affluence Research Center concluded that 42 percent of respondents intend to spend less on this category this year, while 55 percent expect to spend the same as they have and 4 percent will spend more in the coming months. For those products that often compete with the purse for jewelry, the survey suggested a double-digit surge in vacation spending by affluent households in the next 12 months, an 18 percent jump for home furnishings, a 17 percent increase on major home appliances and 16 percent of affluents will increase spending on home computers.

In terms of online habits of affluent households, the report found that 16 percent of respondents purchased jewelry and/or watches in the past 12 months. But in contrast with other product categories, jewelry purchases were least likely to have been made online as only 38 percent of affluents bought through a computer and 62 percent bought inside a store. No respondent purchased jewelry using a mobile device, according to the study. Only the ”major home appliance” category came close to this trend with 51 percent of affluents saying they bought an appliance in a store, while 39 percent purchased the appliance online and 1 percent used a mobile device.

The American Affluence Research Center found that 10 percent of those who bought jewelry online did research product and prices first, while 3 percent of all respondents simply researched jewelry or watches online without making a purchase. Six percent of shoppers did not research jewelry online before making their purchase, according to the research report. In contrast, the most popular product to purchase online was non-business airline travel, accounting for 76 percent of affluents in the survey, and 84 percent of those purchases were made via computer, while 10 percent were made by telephone, 5 percent were made on a mobile device and 1 percent in a store.

There appeared to be  little variation in ages or incomes of those who did make a jewelry or watch purchase online. In all, of those affluents who bought jewelry online in the past year, 23 percent were women and 11 percent were men. By age group, 13 percent  were under the age of 50, while 17 percent were between 50 and 59 and 16 percent were older than 60. And by net worth, 18 percent of those with a net worth of $800,000 to $1.49 million purchased jewelry online, while 14 percent in the $1.5 million to $5.9 million bracket and 18 percent of those with assets of $6 million or more bought jewelry online.

The study noted details on how affluent households view their future  earnings, savings, investment objectives and the general economy. Special questions on the survey also quantified the ownership and usage of smart phones and tablets, participation in social media  and how often they receive communications from their favorite manufacturers and retailers.