Welcome to
Luxury Consumer Behavior
Dr. Satyendra Singh
Professor, Marketing and International Business
University of Winnipeg
s.singh@uwinnipeg.ca
www.uwinnipeg.ca/~ssingh5
What is Consumer Behaviour?
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
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…
Types of Consumers
Purchaser
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
Product Display
Level
Eye: ↑50%
Hand: ↓30-40%
Floor:???
End-of-aisle
Not brand loyal, or loyal to one brand,…
Stand alone
Windows displays  brand image, communications…
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
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
Bluefly.com
designerimports.com
Forzieri.com
Glam.com
Neimanmarcus.com
Net-a-porter.com
Yoox.com
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
Europe -- UK, Italy, Spain Germany
25% of population > 60
Older people in Europe than USA
Italy
Inspired by art
Flashy watches  mechanical
Curves in jewellery
Germany
Quality is important
Simple watches  Quartz
Japan
Like cosmetics, ready-to-wear,…
Do not like perfumes
It hides natural body odour
Encroaches personal space
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,…
World’s thinnest (3.5mm) Indian watch
Hilton in Sari
Victoria Bechman in Sari
German model Claudia Ciesla in Sari
Palace on wheel
Indian Service Luxury
Palace on wheels -- Inside
Palace on wheels -- Inside
HK/SP/Thailand/Taiwan
Full of young people
Stylish, sleek
Ready-to-wear
Brand visibility is important
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,…
Russia
90,000 millionaires
Moscow alone spends $2b/year on luxury
Russians love luxury  banned before
Flashy
New wealth  Skiing Courchevel French Alp
Other Emerging Luxury Markets
Columbia
Indonesia
Vietnam
Egypt
Turkey
South Africa
CIVETS
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
Customers know it
Custom-made  Could be real
Replica made by legitimate craftsman through some
connection
Where are Fake Luxury Products?
China, HK, Thailand, Morocco, Taiwan, Turkey,
S Korea  Customers age: 25-35
London  Oxford Street
Manhattan  Canal Street
Shanghai  Xiang-Yang Road (Closed now!)
…
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 