We all understand the importance of knowing your customer, but every so often a needed reminder hits us hard. A recent hit comes from a joint study conducted by Epsilon and The Luxury Institute. The study—The New Face of Luxury: Breaking Down the Myths and Stereotypes of the Luxury Shopper—comes out swinging in a press release announcing its publication: “Luxury brands lose 50% of their top customers annually because they routinely misidentify their demographic and economic profile while also failing to create a personalized sales experience for them.”
Half of your top customers out the door is a big hit indeed.
The study reports findings about the demographic characteristics of luxury customers in particular, but the overall lessons are clearly adaptable to brands and customers of all sorts.
Don’t be fooled by stereotypes. It’s well-known that most luxury shoppers are women, right? Except that the study knows that 57.5% of those shoppers are male.
Don’t be fooled by assumptions. In this prolonged age of conspicuous consumption, the best way to show off is in person, with expensive clothes, correct? But 13.8% of luxury shoppers indicate that their top merchandise categories are décor and gifts, more than those who indicated apparel. (But apparel is certainly in the running.) Hunting and fishing—no surprise—are pretty low on the list, so maybe that assumption was OK.
Fight internet pillage of your brand with instore experience appropriate to the customer. Reports the study: “Luxury shoppers crave the experience of the brand and look for a VIP interaction,” according to the report.
The white paper recommends: “Combine housefile information with third-party data including purchase behavior, to get the real picture of your shoppers. Use this information to segment your housefile into shopper personas.”