1. Welcome to Luxury Consumer Behavior
by Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg Canada

2. What is a Premium Product?

3. What is Consumer Behaviour?

4. Luxury Consumers Traditional
Head-to-toe covered, loyal to single brand,…
Buy established brand  Hermes, Dior,…
Modern
Not brand loyal, or loyal to one brand,…
They know what they want
Different desire and expectations
Smart, educated, savvy discerning consumers
High status

5. Modern Consumers Parent and children dress alike  ↓ gap
Cosmetics, surgery,…
Luxury market cannot be segmented
40s, 50s, 60s does not matter
Presidents: Zimbabwe, Italy  80s
Group pressure > individual taste
↑ group pressure in Japan, France, Spain…

6. Types of Consumers Purchaser Browser For entertainment
They’ve knowledge to buy products
Browser
For entertainment
May come back  need more time to make decision
Opinion leader
Meeting point  Sephora store (10,000 visits weekend)
We display our history and heritage
That’s why we have museum section in luxury stores

7. Product Display Level Eye: ↑ 50% End-of-aisle
Hand: ↓30-40%
Floor:???
End-of-aisle
Not brand loyal, or loyal to one brand,…
Stand alone
Windows displays  brand image, communications…

8. In-store Consumer Behaviour
Time spent Women (W) + W = 8 min W + child = 7 min W alone = 5 min W + Man = 4 min Stealing  33% by customers, 66% by staff Always take receipt  staff makes fake returns RFID  Radio Frequency Identification

9. Online Consumer Behaviour
Online  Pull consumers to store Offline  sales people use knowledge for $ Debate  Luxury cannot be sold online Prada  www for info only Some brands sale limited (e.g., old) products online. Others sale through luxury e-stores

10. Bluefly.com

11. designerimports.com

12. Forzieri.com

13. Glam.com

14. Neimanmarcus.com

15. Net-a-porter.com

16. Yoox.com

17. Attitude towards Luxury Products? (10-pt scale)
China = 8.2 Mexico = 8.0 India = 7.3 UK = 7.3 USA = 6.8 S. Korea = 6.4 Germany = 6.1  difficult relationship with luxury Italy = 6.1 and France = 5.7  Catholic countries Helping poor and controlling desire is important Japan = 5.6  Symbolic revenge of WWII Not liking may not mean  customer’ll not buy luxury products

18. Europe -- UK, Italy, Spain Germany
25% of population > 60 Older people in Europe than USA

19. Italy
Inspired by art Flashy watches  mechanical Curves in jewellery

20. Germany
Quality is important Simple watches  Quartz

21. Japan Like cosmetics, ready-to-wear,… Do not like perfumes
It hides natural body odour
Encroaches personal space

22. India
70,000 millionaires 50% of population < 50 by 2020 Jewelleries  gold, diamonds, gems,… Industrial names  Sony, Mercedez, BMW… Own luxury  world’s thinnest watch Saries  even becoming popular abroad To be served  Indian palace train,…

23. World’s thinnest (3.5mm) Indian watch

24. Hilton in Sari

25. Victoria Bechman in Sari

26. German model Claudia Ciesla in Sari

28. Palace on wheel Indian Service Luxury

29. Palace on wheels -- Inside

30. Palace on wheels -- Inside

31. HK/SP/Thailand/Taiwan
Full of young people Stylish, sleek Ready-to-wear Brand visibility is important

32. China
Largest emerging luxury market in the world 300,000 millionaires in China 12% of luxury goods are sold in China To be 26% by 2020 Cosmetics  ↑ whitening products Silk, Wine, whisky,…

33. Russia
90,000 millionaires Moscow alone spends $2b/year on luxury Russians love luxury  banned before Flashy New wealth  Skiing Courchevel French Alp

35. Other Emerging Luxury Markets
Columbia Indonesia Vietnam Egypt Turkey South Africa
CIVETS

36. Types of Fake Luxury Products
Counterfeit industry $600b (x4 luxury industry!!) Counterfeit  100% copy Deceive customers as real Pirated  Copied Customers know it Imitation  Not 100% identical Custom-made  Could be real Replica made by legitimate craftsman through some connection

37. Where are Fake Luxury Products?
China, HK, Thailand, Morocco, Taiwan, Turkey, S Korea  Customers age: London  Oxford Street Manhattan  Canal Street Shanghai  Xiang-Yang Road (Closed now!) …

38. Fake KFC in Iran

39. Fake Apple Store in Iran

40. Fake Lxury Bag

41. Fake Luxury Products Prevention
France: criminal activities  buyer and seller
If caught, 2 years in jail
LV sued Carrefour for $40,000  Shanghai store
Hermes post warnings on Internet
LV, Burberry,… and police raid fake shops
LV spends $15m-$20m/year to combat fake luxury
How to detect it? Click 