The FINANCIAL -- Luxury consumers across Europe plan to spend over €9,000 (US $11,190) on gifts during the festive period, according to the inaugural Luxury consumption among European high earners 2014 report published today by Deloitte Touche Tohmatsu Limited (DTTL). They will spend an average of €4,400 (US$5,470) on others and €4,700 (US$5,840) on themselves.
The survey of high-income earners living in France, Germany, Italy, Spain, Switzerland, and the United Kingdom was conducted to explore shopping behavior and general attitudes for luxury goods. Sixty-seven percent of luxury consumers still prefer to buy in-store, even if they do their initial research online. Interestingly, while 85 percent of luxury consumers are regular users of social media and 18 percent use social media to find product information, only 4 percent currently use social media to make end-of-year purchases during the festive period.
“The festive season is the most important time of year for the fashion and luxury sector, particularly as the Eurozone economy continues to remain subdued,” said Patrizia Arienti, Deloitte Italy luxury leader. “Deloitte’s analysis of luxury consumers’ shopping habits indicates a much-needed positive outlook for Europe’s luxury consumer market. The shopping budget luxury consumers estimate they will spend on others as well as themselves, will collectively have a positive impact on the sector overall,” she added.
In-store shopping still preferred — In-store-only purchases are particularly popular in Italy (55 percent) and Switzerland (51 percent). Customer service and the ability to manually handle items are the main reasons for in-store purchases, with single-brand stores having an edge in terms of staff knowledge and service. However, 47 percent of consumers say their online purchasing has increased since 2013, with consumers in the UK (38 percent) and Germany (34 percent) now doing a greater amount of their luxury shopping online, citing convenience as the main reason, according to Deloitte.
High social media usage — 85 percent of luxury consumers use social media, with Facebook (60 percent), LinkedIn (40 percent) and YouTube (39 percent) being the most-popular platforms. The most active group of social media users were those under 35 years (96 percent); the group using social media the least were those older than 55 years (77 percent).
Most-expensive items — The top luxury items purchased include: travel and hotels (20 percent) - higher in Italy (37 percent); clothes (12 percent), which are higher among females in Spain (24 percent); and handbags or leather goods (6 percent). Watches and jewelry still remain the highest-value items bought in personal luxury as gifts.
Frequency of luxury purchases — More than 50 percent of clothes and shoes are purchased on a quarterly basis. At a country level, Italians are more frequent buyers of luxury clothes (72 percent), shoes (56 percent), and handbags (42 percent).
Quality is key — Almost half (48 percent) of consumers said quality is the most important factor when buying high-ticket items. Italian luxury consumers placed quality higher (56 percent) than any other group surveyed. The second-most-important factor was value for money (42 percent). Spanish consumers place value slightly higher than average (52 percent). This was followed by design (34 percent) and brand reputation (25 percent), according to Deloitte.
“Looking ahead, we are likely to see the number of luxury items purchased online increase as there are still huge opportunities for brands to tap into the luxury consumer demographic via social media. At a sector level, the hotel and travel industry is currently taking the majority share of luxury expenditure. This should send a strong message to luxury brands that competition is coming from places that may not have previously had such a dominant influence in the sector,” said Arienti.