A total of 96 percent of Americans with annual incomes of $150,000 or more buy products and services online; 55 percent do so frequently, according to a Luxury Institute survey. Nearly all wealthy consumers (99 percent) use the Internet to research before they buy; two-thirds conduct online research frequently.
“The Internet is the channel the wealthy prefer when buying several categories of goods and services,” said Milton Pedraza, chief executive officer of the Luxury institute, New York City-based Luxury Institute, a ratings and research organization that specializes on high net worth consumers. “Sixty-nine percent make hotel and resort reservations mostly on the Internet. Ironically, the only remaining obstacle preventing wealthy consumers from purchasing a multitude of luxury products and services on the Internet appears to be the lack of customer-centricity of some luxury firms.”
Illustrative of how the Internet has grown in importance as a sales channel for luxury goods marketing, more than half of the wealthy (53 percent) prefer to make purchases of women’s apparel online; 43 percent prefer the Internet for buying men’s apparel, according to the survey.
Effective search engine marketing strategies produce the biggest payoff (Google and Yahoo! are the top sites visited by the wealthy). Nearly three-fourths of the wealthy say that finding companies through Internet search is an effective way to create a positive impression. Just 30 percent, however, found ads on a search engine site an effective marketing technique. Surprisingly, finding ads in media is the second most popular method of creating a positive impression and getting the wealthy to buy ­ 10 percent of the wealthy say this is an effective method, 43 percent say it’s somewhat effective. Thirty-nine percent say free online newsletters are effective, while one-third respond positively to emails with special offers.
Once wealthy consumers arrive at a Web site, privacy and security are of chief importance, followed closely by ease of navigation. Forty percent find easy-to-navigate websites very effective at creating a positive impression and leading them to purchase; 37 percent cite ease of navigation as somewhat effective. Wealthy women are significantly more likely than men (46 percent to 35 percent) to find easy navigation very effective.
Useful content, and a liberal return policy, are highly important, as is the ability to track shipments. Companies should refrain from using pop-up or banner ads on-site as they are a turnoff for the wealthy, especially at the highest levels of income and net worth. What’s not important? Having a physical location, an attribute the wealthy rate 4.8 (1-10 scale).Follow JCK on Instagram: @jckmagazine
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