Advice from friends or family carries considerable weight in shaping spending decisions, but many wealthy consumers are turning to the Web for much of their education on potential high-end purchases, according to a recent survey in seven categories of luxury goods and services. However, some items remain easier to sell in person, including jewelry.
About 73 percent of respondents to a Luxury Institute survey of Americans with annual incomes of at least $150,000 said they are only comfortable closing automobile transactions at a showroom, while 61 percent would only buy real estate or luxury jewelry in person. More than one-third insists on choosing fashion apparel (38 percent) and wealth advisors (35 percent) in person.
“These highly tactile, big-ticket luxury items are generally better experienced rather than simply presented on a website,” said Milton Pedraza, Luxury Institute chief executive officer.
For many luxury items, however, these shoppers do go online for many luxury products, according to the survey, which polled households with an average annual income of $287,000 and average net-worth of $2.9 million.
Approximately 64 percent of wealthy consumers go directly to Web sites of known providers for information on luxury goods and services; slightly more than the 57 percent who say that they solicit input from friends and family, according to the survey.
Search engines, in particular, rank just behind company Web sites and advice from friends and family as the best sources of information when researching luxury purchases.
Ratings and review sites attract the eyeballs of 38 percent of wealthy consumers, according to the survey.
“At this stage, most luxury players are quickly awakening to the power of gateways like Google to drive customers to their sites,” Pedraza said. “But now is the time to get processes in place to measure the efficacy of various search optimization strategies and other traffic and sales driving tools.”
Google—recently earning top ranking in the Luxury Institute’s 2008 Luxury Brand Status Index survey for the search engine category, comfortably ahead of Yahoo! and Microsoft’s MSN—has carved out a dominant position within the luxury niche. Google was named specifically as a favorite ‘first-stop’ website for gathering information on luxury goods and services by 13 percent of wealthy consumers. The closest, but still distant, competition comes from Consumer Reports, a favorite of three percent of respondents.
The average comfort threshold for online purchases by wealthy consumers is $3,294, according to the survey.