Luxury, Loyalty & Experience

Autumn 2018

The Research

Luxury, Loyalty & Experience is our dive into the luxury market. In this report we explore how exclusivity and quality shapes purchasing behaviour, and what loyalty and trust means to customers when it comes to luxury brands. As well as asking 300 luxury customers what matters most to them, we also interviewed Vivienne Westwood, Fiorentini + Baker and Paul Walsh, ex CEO of Diageo, for their views.

 
 

Why is Luxury Important?

Globally the Luxury Market is work over £1 trillion (Bain 2017), and last year the UK Luxury market saw sales grow by 5.6%. The Luxury market is a market that understands the power of differentiation, and compared to other markets that are finding the post-brexit reality a challenge, there is a lot to learn from the luxury retailers. These were our key findings:

  • Quality drives loyalty. 89% of high earners identified high quality as a key driver of loyalty in the Luxury market.

  • Social Media has a modest level of impact in the luxury market. Less than 1 in 10 people agreed celebrities and bloggers were important when choosing one brand over another.

  • In-Store is a key part of any experience. In store is still the highest route to purchase, with more than 3 in 10 people choosing bricks and mortar to purchase luxury goods.

  • Luxury customers are loyal. 71% of luxury customers claim they are loyal to their luxury brand of choice.

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Brands can put collections on the market in limited numbers which provide a degree of exclusivity; the place in which they are sold is another factor – which may include pop-up stores in hyped places, or entire floors in retailers like Harrods for a limited time.
— PEPPE LOREFICE - Knitwear and Jersey Designer for Vivienne Westwood
Any experience which gives the customer an insight into the brand and product and personal treatment is valued.
— Deborah Baker - Founder Fiorentini+Baker
For me luxury means expensive deserving and self-rewarding. Luxury is a relative statement. Luxurious timepieces have a different price point than gentlemen’s cosmetics but nevertheless they have a price premium, and in the mind of the consumer that price premium has to be justified either through brand or functionality of products.
— Paul Walsh Executive Chairman - Compass

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