“People accept to pay a high price, but they have also raised their expectations of what they receive in return,” explains Catherine Jubin, director of the International Luxury Business Association, which brings together European businesses in the sector, such as Nespresso and Jaguar. So as to get a clearer picture of their customers’ expectations, the Association commissioned OpinionWay, a market research specialist, to conduct a survey of buyers of luxury goods (jewellery, watches, fashion, accessories, travel, wines and/spirits, tableware and fragrance/cosmetics). Carried out during the first half of March 2010 in four countries – France, the United Kingdom, the United States and Japan – the survey questioned more than 1,000 people aged between 25 and 65 from the 10% of high-income individuals who had bought at least one luxury product in the previous 12 months. Of those questioned, 46% said they had spent more than €3,000, while 27% had spent over €5,000.
The main conclusion drawn by the survey, which OpinionWay presented in mid-April to an audience invited by the Association, was that of 15 given criteria, price ranked just sixth as a purchasing factor, behind quality, design, fine materials, product lifetime and features. The survey found that 74% of those questioned admitted to having bought a luxury item despite thinking the price was too high.
61% of those surveyed check on the Internet before buying, and so have an accurate idea of prices.
The importance of the Internet
While cost isn’t a make-or-break factor when buying a luxury product, it is nonetheless increasingly taken into consideration. More than 40% of those questioned said they took price and value for money into account more now than in the past. Indeed, “61% of those surveyed check on the Internet before buying, and so have an accurate idea of prices”, continues Catherine Jubin. At the same time, an increasing number (33%) wait for a special offer to take advantage of discounts, or even negotiate prices (21%), particularly in the watch sector where many retailers have been willing to negotiate in order to sell their stock.
Purchasing behaviour still varies widely from market to market nonetheless. The French tend to buy a luxury product simply because they fall in love with it, while the British are more likely to feel they have earned it, or wish to treat themselves after a setback. The Americans, meanwhile, are more pragmatic: their luxury purchases are driven first and foremost by the desire to possess the item of their dreams “at any price.”