The Evolution of Spending: A Luxe Notes Special Report

American women constitute the largest single economy in the world. They’re buying a lot of luxurious things for themselves – furs, diamonds, and cars. They also buy 70% of all NFL-licensed products sold. Yet a surprising number of women don’t really like to shop!

At a seminar during the recent Couture Collection and Conference in Scottsdale, Ariz., three experts on marketing to women shared some of their observations. The panel included marketing consultant Gerry Meyers; Karen Makris, product manager for Mercedes-Benz C Class; and Cary Jehl Broussard, corporate communicatons director of Wyndham Hotels and Resorts. Among their findings:

  • The movement of women over 40 into executive positions has practically revolutionized the financial services, automotive, and fashion industries, among others.

  • Time is the most important commodity to working women in high-income brackets. They will spend more money to save time.

  • Luxury is judged by the individual, not by society. Women think refinement without function is not luxury – it is a foolish purchase.

  • There are significant gender differences in shopping and negotiating behavior. For example, in conversation, a man nods to signifiy agreement. A woman nods to signify that she’s listening, not necessarily that she agrees.

  • If a woman says she wants to think about a purchase, she’s not asking to be sold harder. She means she wants time to think about it.

  • Women refer far more people to (or away from) a business than men do. A good experience means a woman’s friends may someday become customers; a bad experience virtually guarantees they won’t.

  • Women are information gatherers. They’re more receptive to a pragmatic, goal-oriented approach that is price-sensitive but not price-driven. They respond well to seminars in the financial services and automotive industries, where they’re relative newcomers to the market.

  • Women are actually less sensitive to price than men but are more sensitive to value.

  • Men expect a transaction. Women expect a relationship.

  • Women purchase 40% of all luxury autos in the United States and 50% of all autos; they influence 80% of all auto purchases.

  • Women are the fastest-growing segment of business travelers. Twenty years ago, they represented about 1% of all business travelers. Today they’re 38%. By the year 2000, they’re expected to account for half of all business travelers.

  • There are important differences in behavior between women who made their own money and women who inherited old money. Women who’ve earned their wealth tend to make riskier investment choices, while women with inherited wealth tend to make more conservative investments. Women who’ve earned their money tend to buy jewelry they can wear every day; women who’ve inherited their wealth tend to buy jewelry for social events.

  • Details count. It’s the little things that are important to women, and many are the times details have lost a sale. Cary Broussard of Wyndham Hotels says women notice the details in a hotel but all guests appreciate them. Important details for women include the safe, convenient availability of exercise equipment; the ability to order healthy meals; rooms with extra comfort amenities; and a friendly, safe environment.

The Italian Trade Commission, in collaboration with the Platinum Guild International, Vicenza Trade Fair Board, Miller Freeman Jewelry Group, and W Magazine, honored various individuals in the U.S. jewelry industry who’ve demostrated their support of Italian jewelry products through sales, marketing, or promotion. The gala dinner and awards ceremonies were held Monday, July 20 at the New York Public Library. Elsa Klensch, host of “Style with Elsa Klensch” on CNN, was the master of ceremonies, and fashion designer Isaac Mizrahi made a special guest appearance and presentation.

  • Brian Sobie of Simon Sobie & Co., New York, received the Multigenerational Commitment to High-end Italian Gold Jewelry Award.

  • Carolyn Kelly of Saks Fifth Avenue was named the Platinum Retailer of the Year.

  • Isaac Mizrahi was given the Platinum Personality Award.

  • Samuel Getz of Coral Gables, Fla.-based Mayors Jewelers received the Brand Recognition Award.

  • Andy Johnson of the Johnson Family Diamond Cellar, Columbus, Ohio, received the Spectrum Award (not to be confused with the AGTA award of the same name).

  • Susan Jacques of Borsheim’s in Omaha, Neb., received the Longevity Award.

  • The Wholesaler Award was given to Yroam Sheinman of OTC International Ltd.; the Electronic Retailing Revolution Award was presented to John Calnon of QVC; and the Mass Merchandisers Excellence in Promotion Award was presented to Rose Septer of Service Merchandise.

Increasingly, high-end manufacturers are finding diffusion lines are an important part of growing a luxury business. Big news was this summer’s much-heralded launch of the Van Cleef & Arpels wholesale line (see story, page 114). Even überjewelers like Laurence Graff (story, page 110) have “boutique” lines of more accessibly priced jewelry. On the wholesale level, New York-based luxury diamond specialist Kwiat says response to its new “Kwiat Couture by Robin Garin” line is far exceeding initial expectations. The new line, which debuted at The JCK Show in Las Vegas, features Garin’s signature romantic styling in diamonds, 18k gold, and platinum. It is proportioned and designed for a woman to wear every day and is more accessibly priced than Kwiat’s traditional diamond-intensive superjewels. Garin says women who already wear Kwiat’s high-end pieces like the Couture line for its day-to-day wearability, but it also appeals to women who can’t afford the heavy diamond pieces or whose lifestyle doesn’t require them. At press time, plans for packaging, in-case signage, and insert cards were being finalized.

Signs of the times: For work, many women are doffing jackets and suits and replacing them with soft, pretty cashmere twin sets or light-as-air costly pashmina shawls. New fragrance trends are moving back toward headier floral scents and away from sporty “transparent” scents. The difference between today’s new fragrances and the power-potions of the 1980s is that these are alluring and romantic rather than blatantly sexy. In jewelry, the newest pieces are grandly sized but delicately romantic, vs. the bold pieces of the ’80s or the tiny, almost non-jewels of the early ’90s.

Familiar names that are considered icons of luxury are not necessarily the best products, says The Robb Report. In its 10th annual “Best of the Best” issue, such standard-bearers as Rolex, Montblanc, and Armani didn’t score top honors in their respective categories. (In fact, neither Rolex nor Armani made the list at all.) The top five watches were, in order: Patek Philippe, Jaeger-LeCoultre, Audemars Piguet, Girard-Perregaux, and Vacheron Constantin. Best jewelry was from Harry Winston, Cartier, Mikimoto, Van Cleef & Arpels (tie), and Asprey; Best writing instruments were from Omas, Namiki, Aurora, Pelikan, and Montblanc. The Robb Report feature, published in June, highlights the top performers in a wide scope of categories, including the best in hotels, champagne, and food as well as jets, boats, sporting equipment, collectible cars, and computers. (By the way, the best men’s suit is a Brioni.)

Luxury leather-goods maker Hermès reported its 1997 sales volume in Asia grew despite economic woes, presumably because those with money are economizing by shopping at home rather than traveling. Likewise, Bvlgari reported a 27% rise in sales for the first half of 1998. The Italian jeweler said sales worldwide have increased in all product categories, but particularly notable was a 33% gain in Japan. The Vendôme Group, whose brands include the likes of Cartier, Baume & Mercier, and Piaget, reported a 15.2% increase in operating profits and a 19.3% rise in sales for fiscal 1997. Comité Colbert, an association of 75 French luxury goods companies, reported 1997 sales rose 7.7% over 1996 figures. Modest growth (5%) came from the United States. In Asia, drops in Japan, Hong Kong, Singapore, Taiwan, and Thailand were offset by growth in China and South Korea, resulting in a net drop of only 1%.

French luxury powerhouse LVMH reported sales were down 5.6% for the first half of the year. The drop was attributed directly to drops in Asian tourism, resulting in a 30% sales decline in its DFS chain of duty-free travel shops.

Henry Dunay, considered by many to be the “father of American jewelry design,” is about to launch a new offspring. His first fragrance, due this fall, follows the lead of other great jewelry names such as Tiffany, Cartier, Van Cleef & Arpels, and Boucheron. The fragrance, called Sabi, debuts exclusively in Neiman Marcus next month, with international distribution slated for 1999. Standard editions of the fragrance will be sold in the fragrance department, but the special limited-edition version of the scent will be sold in Neiman’s Precious Jewels salons, next to Dunay’s jewelry collections. The limited-edition bottle, $30,000 retail, has an 18k gold, diamond-encrusted cap that doubles as a necklace. The actual perfume is housed in a removable, refillable one-ounce bottle nestled in an outer glass decanter. The cap comes with a pendant attachment and silk cord to create the necklace. Only 100 of the limited-edition bottle-cum-jewel will be produced; they’ll be signed, numbered, and presented in a black lacquer box lined with 24k gold leaf.

Daily newspaper readers are increasingly likely to be college graduates, over age 50, affluent, white, and male. Though women in the same socioeconomic group display similar readership patterns, they tend to have less time to read the paper on a regular basis. Both read general news; men also like sports and technology news while women enjoy community-related news and fashion or style reports.

(Sources: Staff reports, Women’s Wear Daily, The Robb Report, and Research Alert newsletter.)