BCG&Altagamma：2014年全球高端奢侈品消费者洞察

True-Luxury Global Consumer Insight Summary of The Boston Consulting Group’s Study
Milan, January 2014
True-Luxury Global Consumer Insight Summary of The Boston Consulting Group’s Study
A document prepared
by
The Boston Consulting Group
Piazzetta Bossi, 2
20121 Milan
Milan, January 2014
Contents
INTRODUCTION (4)
WHY NOW? (5)
WHAT MAKES THIS SURVEY UNIQUE? (5)
WHERE WILL GROWTH COME FROM IN THE FUTURE? (5)
WHAT IS NEEDED TO ATTRACT LUXURY CONSUMERS? (6)
WHICH SEGMENTS OF CONSUMERS WILL DRIVE GROWTH OVER THE NEXT FEW YEARS? .8 WHICH ARE THE KEY LESSONS TO BE LEARNED? (10)
INTRODUCTION
This document is a summary of the "True-Luxury Global Consumer Insight" study carried out by The Boston Consulting Group (BCG) in cooperation with Fondazione Altagamma and is intended for press officers. The first edition of this survey is an innovative study on luxury consumers which aims to go beyond the limits of previously available research in order to reach unprecedented scale and relevance:
•More than 40,000 consumers have been interviewed, including 10,000 “Core” luxury consumers (who spend an average of 30,000 Euros a year with the first quartile reaching 85,000 Euros a year)
• A wide geographic area has been covered, with an analysis of over 20 countries and a focus on 10 countries key to the sector: Italy, France, UK, Germany, US, Japan, Brazil, China, South Korea, Russia
•Comprehensive vision of the luxury world: "Core" luxury consumers, Aspirational and Prospective consumers have been interviewed
•All luxury categories have been included: personal luxury goods (apparel, accessories, jewellery and watches, fragrances and cosmetics), luxury experiences and cars •Focus on understanding consumers and developing recommendations for luxury companies thanks to BCG’s competence and the advisory board created on purpose, composed of 18 luxury brands (Amex, Bernstein, Bulgari, Burberry, Chanel, Ermenegildo Zegna, Fendi, Ferrari, Gucci, Illy, Kering, La Rinascente, Loro Piana, Luxottica, LVMH, Neiman Marcus, Richemont, and Rocco Forte Hotels)
With True-Luxury Global Consumer Insight, BCG and Altagamma have answered five fundamental questions to provide practical suggestions to luxury brands:
1.Why now?
2.What makes this survey unique?
3.Where will growth come from in the future?
4.What is needed to attract luxury consumers?
5.Which segments of consumers will drive growth over the next years?
A summary of this survey was presented on January 28 at Fondazione Cariplo before an audience of executives from the main Italian and foreign luxury brands and sector experts, in the context of the "Altagamma Consumer and Retail Insight" conference organized by Fondazione Altagamma.
WHY NOW?
Growth in the luxury sector in the next decade will be mostly organic (2/3 of the total) and will see the consumer "at the centre", as main engine of growth. For this reason, knowing the consumers, understanding their values, inclinations and aspirations is pivotal. But it is also necessary to understand and anticipate the impact that the changes in the buying behaviour will have on the strategies of luxury brands, in terms of store experience, enhancement of the "Made in…" excellence concept, adoption of new technologies and rethinking of the marketing mix. Such changes in consumers’ mind and behaviour will have a relevant impact on more than 100bn Euros of investments in the sector.
WHAT MAKES THIS SURVEY UNIQUE?
The scale and relevance of the segment concerned: more than 40,000 consumers have been interviewed by analysing "Core"luxury consumers (who spend on average 30,000 Euros a year), Aspirational consumers (who spend on average up to 2,000 Euros a year) and prospective consumers. At geographical level, more than 20 countries have been covered in mature and emerging markets, with a special focus on 10 countries (Italy, France, UK, Germany, US, China, Japan, Brazil, South Korea, Russia). All luxury categories have been included (personal luxury goods, luxury experiences, and cars) with a sample of consumers having bought luxury goods for more than 230m Euros last year. More than 100 brands have been mapped within a survey in which 18 executives from the sector’s leading companies have been involved.
WHERE WILL GROWTH COME FROM IN THE FUTURE?
380 million luxury consumers who now spend about 730bn Euros in personal luxury goods and luxury experiences will be 440 million in 2020, with a total expenditure of 880bn Euros. Of these, 32 million are "Core" consumers (spending on average 10,000 Euros a year in personal luxury goods and luxury experiences– excluding cars) and represent about 40% of the total market value; the remaining are aspirational consumers (who spend up to 2,000 Euros a year). The growth will be mainly driven by "core"consumers with 10 million new consumers by 2020 and a market increase of 85bn Euros. "Core" consumers will increase in particular in the US but also in China, Europe and Middle East. Conversely aspirational consumers will increase from 350 million in 2014 to 400 million in 2020 with a market value increasing from 470 billion Euros to 535 billion in 2020. Growth will be strongly driven by China with 15 million new consumers, compared to 10 million in the United States and 6 million in Europe.
In traditional markets (USA, EU, Japan) besides new consumers, about 1 million "disaffected" consumers are expected to drastically reduce their spending in luxury goods, putting at risk about 4bn Euros of turnover. They are above all French, Italian, Japanese and US consumers (respectively 8%, 7%, 6% and 6% of the total number of "Core" consumers) aged from 45 to 50, who will reduce their spend in personal luxury goods (fragrances, cosmetics, glasses, and shoes), without, however, renouncing luxury experiences, especially holidays and home furniture. These are mostly people whose purchases are influenced, above all, by visits to shops and interaction with sales staff, and who value product quality and craftsmanship. Brands will have to focus on these elements to counteract the decrease in consumption for this segment.
WHAT IS NEEDED TO ATTRACT LUXURY CONSUMERS?
The survey reveals 7 general trends, which will have a significant impact on the sector at a global level over the next decade. Such trends will impact most of the "Core" luxury consumers, not only some segments, and thus understanding them is crucial to the luxury companies’ success.
1.Back to intrinsic values.Intrinsic values (quality, exclusivity, craftsmanship, timeless
classics) are regaining importance (about 70%) over external aspects (brand visibility, aesthetic components, sensuality and coolness). This trend strengthens as the consumer’s age increases and is now also relevant for emerging countries. More than anything else, product quality and exclusivity make the difference, in the whole world.
The clear visibility of a brand and the products’ design are expected to be less important reasons for buying, yet they remain a real driver for 19% and 31% of consumers, respectively.
Understanding consumers’ values is crucial, because such values will impact the drivers for purchasing in the future. For example, brand visibility, still a powerful driver for purchasing in China (for 43% of Chinese consumers), is expected to become less important because only less than 20% of them declare it relevant for luxury.
2.The "Made in…" excellence concept as a fundamental asset. Product origin is very
important as about 80% of consumers declare to check where the products they buy are manufactured. This tendency is especially strong in emerging countries. In all categories of personal luxury goods, “Made in Italy” products rank first (3 times more as “Made in France” products), except for watches, where Switzerland remains the country of reference.
3.The era of Advocacy. In the new context of global and digital information, the so-called
"Word of Mouth"becomes increasingly important both in face-to-face and digital communication (social media). It strongly influences 44% of "Core" luxury consumers.
About 2/3 of consumers prove to be "active advocates" i.e. they often recommend their own preferred brands, especially for product quality and style. The word of mouth is a well-established habit in China and in emerging markets, but also in Italy. This important element, however, must be considered in the context of a communication strategy structured and defined by an all-media approach, where a differentiated marketing mix becomes essential to have a very strong relationship with consumers in the various markets.
4.Men, what a surprise! Men are the real surprise. They are giving a fundamental impulse
to growth, thanks to their spending on typically feminine product categories: 1 man out of 4 buys jewels, bags, fragrances and cosmetics for himself. But gentlemen still exist: presents represent 30% of purchases, made especially (70%) by men and for personal, non-business reasons.
5.Globetrotters. About 50% of the consumption of luxury products takes place outside the
home country, especially in the case of emerging markets' consumers. The reasons are lower prices and the availability of a wider range of products. However, a strong brand awareness and presence in the home country are crucial to be shopped by consumers when abroad. In the worldwide ranking of top shopping cities, Paris comes first then Milan, London and New York. On the other hand, Singapore, Moscow and Macau will sharply grow in the future, at the expense of the most renowned centres (now attracting 70% of consumers worldwide). There is a strong consumer turnover in Milan, with a tendency to lose high-spending, sophisticated consumers and gain consumers with a reduced spending power, who focus more on "entry-level" luxury categories.
6.The end of the global mono-brand concept.The mono-brand and flagship stores
continue to play a central role but they require a new approach, differentiated by age and geographic areas. Consumers in mature markets prefer specialized shops in exclusive locations and an intimate buying experience, whereas consumers in emerging economies prefer big flagship stores where the digital/virtual experience merges with the physical one. The type of support given by shop assistants is strongly opinion-splitting since only less than 20% of consumers have no opinion in this regard. Russian and South Korean consumers tend to be more independent, whereas Chinese and American customers prefer more interaction and support from the part of sales assistants (50-60%).
7.Digital "physicalization". Consumers are now immersed into the digital experience (the
digital media influence over 50% of the purchases of luxury products, with ROPO –Research Online, Purchase Offline – having become a global phenomenon, accounting for almost 40%). The use of digital media varies considerably across generations: more senior users rely on digital media especially to compare prices and products (more than 60%), whereas young consumers use it prevalently to share opinions both with other
consumers and directly with the brand. Pure ecommerce now accounts for 7%of purchases, with peaks in the US and Brazil (about 11%), and mobile purchases are becoming increasingly relevant.
WHICH SEGMENTS OF CONSUMERS WILL DRIVE GROWTH OVER THE NEXT FEW YEARS?
Knowing consumers, therefore, is now fundamental for all luxury companies. But behaviours, habits, and aspirations are no longer predictable or foreseeable on the basis of the traditional demographic and income variables. To act on this, BCG and Altagamma have introduced a segmentation mostly based on attitudinal and behavioural variables (aptitude for fashion, style, degree of independence in choices, use of mix & match…). A team with big data analysis skills worked more than 100,000 hours to analyse about 500 variables on 10,000 consumers spending on average 30,000 Euros a year, using regression models (cluster analysis) to ensure statistical validity. This resulted in the identification of 8 global segments, 2 of which are country specific and 2 sexes specific, providing a precise and detailed description of the different groups of a multi-faceted luxury consumer.
Absolute Luxurers: refined and elegant connoisseurs, who have grown up in luxury. Nothing is too much for them. They represent the European elite and the "happy few" from emerging markets. They buy both personal luxury goods and luxury experiences, focusing in particular on whatever is unique and customised. This is a segment including about 2 million consumers, who buy over 60 billion Euros a year of luxury products with an average spending of 30 thousand Euros per capita, rising up to 150 thousand Euros.
Megacitiers:they live in NYC, London, Paris, Rio, Moscow, and Shanghai and they are very homogeneous. Same playlist, same tastes, same holiday destinations, sure entrance at the party of the year, regardless of where it is. Trends soon become global also thanks to them. They include more than 2 million consumers, mainly in European capitals, NYC and in other, few, big US cities, along with the top megacities in emerging countries. Aged 25 to 35, they spend about 20 thousand Euros a year, totalling 38 billion Euros.
Socialwearers: these are consumers like Lucy Liu and all those who, like her, think that luxury is the green carpet for a better world; when protesting for animal rights, they rigorously do it by wearing "Green Valentino". Is this the first evidence of a phenomenon which will become more widespread? This category includes about 700,000 individuals, with a significant presence also in emerging markets, particularly China and Brazil. They spend 15 thousand Euros a year in luxury goods: quality, sustainability and the "Made in…" excellence concept are essential conditions. They continuously seek an emotional connection with the brand, which causes them to be very faithful customers once they have been conquered.
Experiencers: beyond luxury, there is luxury sharing. This happens when a moment of happiness on holiday or a first class dinner are more valuable than the umpteenth cloth in the wardrobe. Experiencers are discreet and sophisticated, they don’t like showing off. They buy above all holidays, hotel accommodations and luxury food. These are the consumers arising out of the ashes of the roaring luxury years in Europe, in the US and in Japan. They are about 3 million consumers, aged 45 to 50 and they spend about 12 thousand Euros a year, generating a market value of 33 billion Euros.
#LITTLEPRINCES: this is the Z generation, young consumers aged 18 to 25 who were born with their parents’ fortune smoothing their way into life. They are used to playing with designer toys; they are impulsive, always connected, longing for novelties and colours. The brand and, sometimes, the daring aesthetic of design are of outmost importance, more than intrinsic quality. They buy clothes, but also accessories, especially bags and glasses. 1.5 million very young luxury consumers, who already spend 10 thousand Euros a year, for a total market value of 15 billion Euros.
Fashionistas: they always know what is going on; for a fashionista, walking down the street is a fashion show. They love design and shopping is their admission ticket to be part of the world of luxury. They know everything, from the most renowned brands to the latest discovery in the world of style. They buy everything, including bags, cloths, shoes even if, as a consequence, they cannot afford to go on holiday or to the restaurant. These are about 3 million consumers, mostly women, aged 35 to 40, who spend on average 8 thousand Euros a year, for a total market value of 20 billion Euros.
Status Seekers: they live on a stage and the logo on their performance cloths must be clearly visible; for sure, they can’t do without a showy watch or accessory. They don’t like experimenting. They tend to follow well-established fashion trends and brands… in this world, the approval of others is essential.
They are represented by 2 million consumers aged 35 to 40, who come mainly from Asia, but also from Russia and Italy. They spend 8 thousand Euros per capita a year, generating a market value of 16 billion Euros.
Classpirationals: what classpirationals desire most, is avoiding making a bad impression on their boss. These are not particularly sophisticated luxury consumers, they are very far from the idea of experimenting, and they seek classical clothing and accessories with a good value for money. For them, accessible luxury is the way to feel accepted in the community in which they live, especially the working community. They compare prices online and use duty free shops as an alternative to mono-brand stores. They are 3 million consumers, men and women, aged 30 to
35, with a strong presence in Korea and Russia; they spend on average 3 thousand Euros a year, generating a market value of 10 billion Euros.
Luxe-Immune consumers: they can buy whatever they want, but it seems like they don’t really want it. They are pragmatic and very focused on themselves and tend to spend very low amounts of money in luxury compared to their income. They might have been heavy spenders in the past, but they are unlikely to be such again. They are about 1.5 million consumers, only in mature markets, and spend 6 billion Euros a year.
Rich Upstarters: these are the new rich in emerging countries, who have worked hard to reach their status and who have just realized to be able to spend their money in luxury goods. These consumers are still immature but they have a very high potential. They are slightly more than one million, mostly in emerging countries and they spend about 5 billion Euros a year.
TimelessPropers: Mrs Perfect, refined and elegant, wearing cloths suiting her to a T on every occasion. Risk is not her business; she loves a classical, timeless style and is faithful to few brands and stores. These are about 2.5 million consumers, mainly women, who spend about 8,000 Euros a year for a total market value of 21 billion Euros.
Omnigifters: They are gentlemen who buy above all for others and find it rewarding. This is the most senior segment, represented mostly by men, particularly in mature countries compared to emerging markets. They are about 2 million consumers for a market value of 19 billion Euros. Absolute Luxurers, Megacitiers and Experiencers are the consumers who spend the highest amounts (over 15,000 Euros a year) and represent more than 50% of the total luxury spending. They will still lead luxury consumptions in 2020, but the #LITTLEPRINCE and SocialWearer consumers will be the fastest growing segments. The most important segments in Europe are those of the Absolute Luxurers and Experiencers, followed by Fashionistas and Omnigifters. Each of these segments has different needs and preferences in terms of sources of information, buying channels, categories and types of products bought. For example, an Absolute Luxurer buys a lot of clothing, jewellery, and holidays and is strongly influenced by exclusive events and celebrities. Experiencers and Luxe-Immune consumers are the most important segments in the US, followed by Timeless Propers and Omnigifters, whereas Fashionistas, Rich Upstarters and Megacitiers are the most important consumer segments in China.
WHICH ARE THE KEY LESSONS TO BE LEARNED?
In a continuously growing and rapidly evolving world, there will be winners and losers. The key elements to success will include:
∙Evolution of the concept of mono-brand store in favour of customisation by country and generation
∙Focus on Quality and Exclusivity to ensure brand protection and development at global level
∙Advocacy as the foundation of a comprehensive and effective communication strategy including all means of communication
∙The digital experience in addition to face-to-face interaction in an increasingly integrated approach covering all media
∙The "Made In Italy" excellence concept as a fundamental asset, a starting point for brand development in the medium- and long-term period
∙The intimate and thorough knowledge of the consumer is key to growth (the so-called "Amazonization” phenomenon).
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