Luxury Shoppers Will Spend More on Fashion This Year
Have you ever thought what kind of a shopping experience you would have if you had hundreds of dollars to spend, an unlimited credit line you can buy a car while sitting right there on your couch? Have you ever wondered what it’s like to live a luxurious life and be able to make luxury choices when it comes to shopping? Business Insider released its new report where it covers all the major e-commerce trends of luxury shoppers. The report explores the spending habits and preferences of this highly sought-after group, as well as where, when, and how they do their shopping, and as we learn in 2016 luxury e-commerce will have a great boost.
One of the most interesting findings is that online shopping is becoming a big trend among this demographic, therefore, shaping the luxury e-commerce business further. This increasing preference changes some of the methods that brands use to attract consumers.
It’s clear that all brands and retailers aim at this consumer group. Even if a retailer’s main products are for budget-consumers (or at least, if they advertise so), they would still be highly interested in this segment, as that’s where half of all consumer expenditures are. The consumer group we are talking about receives an annual salary of $120,000 and more; no brand can ignore this number.
And this is not the end of the story. Discretionary spending of this group is growing faster than for the average US consumer, which means that every year consumers who receive a salary of $120K or above have more money to spend on shopping. Pretty good news for businesses, isn’t it?
A sales manager somewhere at a luxury company office probably thinks if there are so many funds available to be spent on online shopping, he really needs to reach out to these people. And he’s right!
Brands and e-commerce websites should start planning product expansions based on this data; the investment would most probably pay off in a year. According to YouGov, the discretionary spending of the mentioned income group will grow by 6.6% and will reach $406 billion this year. The notorious top 1% of the income group’s spending will increase by 10%.
Ironically, the spending for the average US consumer dropped by 1% between 2014 and 2015. So apart from the well known statement that the rich are getting richer, and the poor are getting poorer, we can now clearly predict that the rich will also be spending more, while the poor will have to cut the spending a little.
Moreover, the wealthy crowd’s increased spending will be directed to fashion, travel, and dining industries, with fashion being the top category on the list. It is estimated that spending on fashion will increase by 6.9%, totaling to $37.4 billion.
Although the report suggests that the wealthy or at least the upper middle class consumers have started to shop by prices and not by brands, luxury brands have no intentions of giving up. According to the data provided by Shullman Research Center, out of $133 million spending on ad placements last year, US luxury brands allocated 57% to print magazine ads. On the contrary, the most effective medium of advertising to the luxury shoppers is digital ad placement.
With the rise of digital sales, the luxury industry will gain a strong sales channel, and fortunately for them, that channel will continue to grow in the future.
Photo courtesy of Ohh Couture