LUXURYThe Business of Happiness

By Pam Danziger, Unity Marketing

Luxury Brand’s Primary Goal:

Deliver HappinessWhy do people buy luxury?

Not because of left-brain traits like quality, value or enhanced features offered.

They buy luxury for the sheer, unadulterated pleasure and joy received in the anticipation of the purchase, the buying, and the using experience.

And if we are really lucky, customers also get happiness in the memory of each of those.

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Happiness Research Finds…All the academic research on happiness confirms this fact:

Greater joy and happiness comes from the things we do (i.e. experiences), not the things we buy and acquire (i.e. luxury goods).

It is the customer’s happiness experience that luxury marketers must focus on.

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Unity Marketing’s Luxury Consumer Research Confirms…A recent Unity Marketing survey on luxury consumer psychology makes this real. In a question of what categories of luxury purchases give the customer ‘much enjoyment,’ as opposed to some or little or no enjoyment, experiences – travel, dining, entertainment –get the highest ratings.

173

145

125122 120

113 110106 106

9388 88 87 87 86

8076 74

71

50

0

20

40

60

80

100

120

140

160

180

200

Index where 100=averageSource: Unity Marketing Affluent Consumer Tracking Study

n=1,200 Affluent Consumers (avg. HHI $271.7k)

Luxury Purchases that Give Much Enjoyment

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Some material purchases deliver more happiness… Gourmet food

A luxury thing that delivers an experience through taste and sharing it with others

Gifts

A purchase made to be given to others as a token of love and affection

Books, videos, music

Things that entertain and engage

173

145

125 122 120 113 110 106 106

93 88 88 87 87 86 80 76 74 71

50

0

20

40

60

80

100

120

140

160

180

200

Index where 100=averageSource: Unity Marketing Affluent Consumer Tracking Study

n=1,200 Affluent Consumers (avg. HHI $271.7k)

Luxury Purchases that Give Much Enjoyment

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Traditional luxury goods purchases are happiness challenged

Jewelry – Index 87, 13% less than average

Fashion – Index 88, 12% less than average

Luxury Goods – Index 71, 29% less than average

173

145

125 122 120 113 110 106 106

93 88 88 87 87 86 80 76 74 71

50

0

20

40

60

80

100

120

140

160

180

200

Index where 100=averageSource: Unity Marketing Affluent Consumer Tracking Study

n=1,200 Affluent Consumers (avg. HHI $271.7k)

Luxury Purchases that Give Much Enjoyment

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How Luxury Brands Can Deliver More Happiness

Different People/Different

Happiness

Tell New Stories of Luxury

Shopping Experience

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Different People/Different Happiness

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Different Types of People Get More or Less Happiness from Different Purchases

For example, affluent men gain more enjoyment from spirit and liquor and technology purchases and less from entertainment events.

Affluent women get more enjoyment from fashion purchases, though they still index close to average.

HENRYs (high-earners-not-rich-yet; HHI $100k-$249.9k) get less enjoyment overall from luxury goods purchases than do ultra-affluents ($250k+), with jewelry purchases being especially pleasant for ultra-affluents.

This suggest that jewelry marketers that aim to attract the younger HENRYs to their brand need to position around ways to make their shopping, wearing and gifting experiences more pleasurable to young HENRYs.

See next page for demographic analysis of enjoyment index where 100 = average. The greater the index value is above 100, the greater the personal enjoyment; the lower the value under 100, the less personal enjoyment…

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Luxury Consumers

Much Enjoyment

Purchasing Index

TOTAL

Index

(n=1,200)

Male

(n-480)

Female

(n=720)

AGE

24- 34

(n=195)

35- 44

(n=330)

45- 54

(n=342)

55- 70

(n=330)

24- 44

(n=525)

45- 70

(n=672)

INCOME

$100K-

$249K

(n=800)

$250K+

(n=400)

ETHNICITY

Caucasian

(n=1,015)

Other

(n=217)

WEALTH

Less

Than

1$Mill

(n=668)

$1Mill

More

(n=394)

AGE &

INCOME

44Yrs And

Younger/

$250K+

(n=217)

44Yrs And

Younger/

$100-$249K

(n=308)

45Yrs

And

Older/

$250K

(n=183)

45Yrs And

Older/

$100-$249K

(n=489)

Travel and hotels 173 154 186 165 176 171 178 172 174 175 169 176 169 171 176 162 179 178 173

Fine dining 145 139 149 139 135 156 148 137 152 142 152 146 150 143 155 132 140 175 144

Entertainment, theatre,

music, etc. 125 92 146 109 106 137 141 107 139 127 120 128 112 120 129 99 113 145 137

Gourmet food 122 110 129 146 108 136 105 122 121 119 127 123 125 115 138 124 121 130 117

Gifts and things for others 120 105 129 118 104 123 133 109 128 118 123 124 99 114 133 102 114 146 122

Luxury experiences 113 93 126 140 103 121 97 117 109 96 145 112 116 96 140 146 98 145 95

Books, music,

videos/DVDs 110 96 119 105 105 114 113 105 114 105 120 112 105 104 127 116 98 124 110

Cultural events,

museums, art festivals,

etc. 106 95 113 106 99 102 117 102 109 103 112 107 107 96 130 114 93 109 109

Beauty & salon services,

massages, hair care,

mani-pedi 106 55 133 117 110 106 93 113 100 100 116 107 102 102 103 128 102 101 99

Fine wine 93 92 94 109 94 96 79 100 88 90 100 95 94 84 112 121 83 72 94

Home decor and home

furnishings 88 77 96 100 86 88 85 91 87 80 106 91 78 80 111 109 79 102 81

Fashion and clothing 88 64 103 100 95 90 72 97 81 80 104 88 91 82 105 105 91 104 73

Spirits & liquors 87 108 72 90 90 94 75 90 85 77 108 88 91 83 99 112 74 103 78

Jewelry 87 74 95 80 97 81 88 91 84 73 114 83 107 69 125 114 74 113 73

Technology tools and

gadgets 86 112 69 94 107 72 74 102 73 84 90 84 101 78 101 108 98 69 75

Beauty and cosmetics 80 43 99 107 77 78 68 88 73 76 87 81 79 73 94 89 88 86 68

Craft beer 76 96 59 85 74 84 63 78 74 78 73 80 64 69 93 76 79 67 77

Hobbies and crafts 74 71 77 68 72 68 87 71 77 75 72 75 77 73 82 69 72 75 78

Luxury goods 71 62 77 87 71 69 64 77 67 59 96 70 76 64 87 98 62 92 57

Sporting goods and

equipment 50 64 40 57 45 57 41 50 50 48 56 52 53 45 67 49 51 65 44

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Tell New Stories of Luxury

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Brand Story Telling Transforms Products into Experiences

Bernadette Jiwa, author and consultant, has made developing compelling brand stories her business:

“Creating a brand story is not simply about standing out and getting noticed. It’s about building something that people care about and want to buy into. It’s about thinking beyond the utility and functionality of products and services and striving for the creation of loyalty and meaningful bonds with your customers.”

Those ‘meaningful bonds’ are formed by stimulating pleasurable emotions and feelings of happiness that the brand promises to the customer.

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Old Luxury Stories of Aspiration Don’t Sell AnymoreTraditionally luxury brands have been telling aspirational stories about how ownership of the brand confers special status to the individual.

At is core, this is a story of elitism disguised by claims of exclusivity, design excellence and workmanship. It is supposed to create desire and aspiration in consumers to buy luxury brands to confirm one’s status and to show off to others.

But today’s affluent consumers aren’t buying into that old story of luxury anymore, most especially the younger consumers.

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Luxury Consumers Need Inspiration, Not AspirationAffluents, most especially the young HENRYs that are the future luxury customers, need to be inspired to buy luxury brands. The inspiration must come from new luxury stories that connect with the values and ideals of today’s affluents.

This challenges many mainline, traditional luxury brands, but creates opportunities for emerging brands that interpret luxury in a new, value-based way.

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Tell Story of Luxury in a Brand New StyleUnity Marketing has just published a new report that outlines 17 new stories of luxury that connect with young HENRYs -- the future customers for traditional luxury brands and current customers of disruptive brands like WarbyParker, Everlane, Fitbit, Shinolaand many others.

The report profiles emerging luxury brands that position their luxury in a new style for the next generation of luxury customers.

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Make Shopping Fun

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Research Suggests Bad Service Enhances Aspiration for Luxury BrandsA recent article in the Journal of Consumer Research featured a provocative title, “Should the Devil Sell Prada? Retail rejection increases aspiring consumers’ desire for the brand” with an even more provocative conclusion: in luxury retailing environments, treating some customers with indifference, even disdain, may increase their desire to buy. The key words are “some” and “may.”

But don’t just read the headlines, skip the details, and decide that haughty and indifferent sales clerks are the answer to the current stagnant retail climate. WRONG!

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Luxury Customers Expect Exemplary ServiceThe real customers of luxury brands won’t stand for anything less than exemplary, caring service. The truly affluent customers don’t have aspirational yearning for luxury brands.

They believe they are entitled to getting what they want, when they want it. That starts with an exemplary shopping experience, online and most especially in-store with a personal touch between a caring service provider and the customer.

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High-Tech Retail Can Never Replace High-Touch Customer Service

Too many luxury brands today are focused on technological solutions to enhance the customer experience

Rather they need to be training and developing the personal touch delivered by sales professionals on the floor.

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Future of Luxury Retail Is PersonalGrégory Pouy, from his position as a thought leader in technology-enhanced marketing, makes it clear that the in-store shopping experience is critical for luxury brands and that experience must be delivered first and foremost person-to-person:

“Retail is not going to change much. You can write and over-think it, but you still need happy customers and salespeople. However, automation and rebotizationwill clearly make many new things possible in store. But when it comes to luxury brands, more so than anywhere else, human contact will make the difference.”

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Our Job:

Make Customers Happy

Understand what makes your customers happy

Tell brand stories in new ways that connects with the mindset and psychology of affluent customers

Focus on customer service to enhance the shopping experience

Luxury brands need to focus on the overall goal: Sell more goods by transforming the things they sell into experiences for the customer.

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Next Steps

The key: Understand what makes your customers and target customers happy and develop strategies to deliver that to them

Delve deeply through research and analysis into their demographics, purchase behavior and psychology and mindset

Understand where your luxury brand fits into their luxury lifestyle

Conduct consumer research to understand the happiness quotient of your brand’s customers and target customers.

Unity Marketing can help. Call us at 717-336-1600 or visit www.unitymarketingonline.com

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Today’s consumer marketers face an increasingly competitive environment with many business and marketing challenges.

Unity Marketing leads with research to help businesses gain insights into their core customers and their best target customers – the affluent who have discretionary income to spend.

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Affluent Consumer Tracking Study Two waves

Spring Shopper Track

Fall Product & Services Track

Consumer Gifting Study In-depth investigation into gift choices and shopping

behavior among middle-income to upper-income consumers.

Special investigation into how consumers use the internet for their gift research, planning and buying needs.

Survey completed April 2015 (n=1,649 consumers HHI $97,900)

Art, Framing & Wall Décor Study The ‘selfie’ culture has created a new market for frames

and wall décor. In addition, affluent consumers are collecting more original, one-of-a-kind artwork to display on their walls.

An in-depth study is planned in 2016 to investigate the new art, framing and wall décor market, with a special section devoted to how consumers use the internet in their pursuit of new art and frames to display.

Millennials on the Road to Affluence This new study has important implications for every

brand that wants to connect with the next generation of luxury consumers: the Millennials

To deliver more actionable

insights to marketers about

the best potential

customers in the U.S.

consumer market today –

the affluent top 20%.

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Qualitative expertise Focus groups, IDIs

Expert, influential & channel partner studies

Quantitative expertise Survey design

Data analysis including statistical data analysis

Analyzing survey results for key take aways

Marketing & branding consulting How to use research to create more powerful brands

and more compelling marketing

Speaking experience Presentations that deliver the most important

information and insights that the audience can take away and put into action

We are a boutique

marketing research and

consulting firm.

We lead with research to

advise businesses that need

insights into mind of

affluent consumer with

incomes $100k and above.

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Greater access to new AFFLUENT consumer SAMPLES

In-depth data about HIGH-END & LUXURY customers

Understanding of BRAND USAGE & AWARENESS

Key COMPETITOR BRAND usage & awareness

Purchase & usage TRACKING STUDIES

CUSTOMER SURVEYS and studies to identify new opportunities

Unity Marketing can

provide more data about

the affluent consumers,

combining both qualitative

and quantitative research

strategies.

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UNDERSTAND your best prospective CUSTOMERS’ needs and desires

Get the COMPETITIVE EDGE

Develop more effective MARKETING STRATEGIES

RESEARCH your market

SHARE customer KNOWLEGDE & INSIGHTS

Evaluate NEW PRODUCTS

Find best CHANNELS OF DISTRIBUTION

Track TRENDS in the market

Unity Marketing can help you

use the research data you

have on hand to greater effect

to drive growth for your

business.

We consult with companies of

all sizes, from small to mid-

sized to large multi-nationals.

We support retailers,

manufacturers and marketers

in both B2C and B2B

marketing strategies.

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Presentations CUSTOMIZED to specific needs of your group

PREPARE your marketing and sales teams for the competitive landscape of tomorrow

Gain “All Access” into the mind of today’s most influential shoppers – the AMERICAN AFFLUENT

Turn research-based INSIGHTS into ACTIONABLE STRATEGIES for reaching your most profitable customers

For over a decade Pam Danziger has studied the changing preferences, shopping habits, attitudes, and lifestyles of affluent consumers.

Her presentations, speeches, seminars, webinars & workshops are customized to the needs of each audience.

Each presentation is designed to give the audience news they can use to understand the mind of today’s most influential shoppers – the American Affluent.

The goal is to deliver research-based insights that can be turned into actionable marketing strategies for each member of the audience to reach their most profitable customers.

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Unity's research-based

approach can help

marketers and retailers find

new opportunities for

growth in their businesses.

Email Pam188@ptd.net or

call 717.336.1600 to discuss

your marketing challenges.

© Unity Marketing, 2016

Pam Danziger and the Unity Marketing team offer a range of

tools and resources to help marketers and retailers identify

their best customers and channel partners and how to reach

them most effectively with targeted marketing strategies

and tactics.

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Speaker, author, and market researcher Pamela N. Danziger is internationally recognized for her expertise on the world's most influential consumers: the American Affluent. Her new mini-book, What Do HENRY's Want?, explores the changing face of America's consumer marketplace.

As founder of Unity Marketing in 1992, Pam leads with research to provide brands with actionable insights into the minds of their most profitable customers.

Leadership in luxury marketing recognized through Global Luxury Award presented by Harper’s Bazaar, London May 2007.

She was named to Luxury Daily's Luxury Women to Watch in 2013. She is a member of Jim Blasingame: The Small Business Advocate’s Brain Trust and a contributing columnist to The Robin Report.

Currently Pam is working on a new book : Meet the HENRYs: Millennials on the Road to Affluence

Her most recent books are What Do HENRYs Want? and Shops that POP! 7 Steps to Extraordinary Retail Success.

Previous books, Putting the Luxe Back in Luxury: How New Consumer Values Are Redefining the Way We Market Luxury; Shopping: Why We Love It, Let Them Eat Cake: Marketing Luxury to the Masses as well as the Classes & Why People Buy Things They Don’t Need

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