Luxury Executives Catch On Slowly to Online Preferences of Wealthy Shoppers,

NEW YORK, June 25, 2008 – According to a real-time survey of more than

175 luxury executives at the recent Luxury Interactive 2008

(www.luxuryint.com) conference in New York City, luxury firms face muchwork ahead in bringing their online presence up to standards demanded by wealthy consumers.Only on one of nine key practices of the online customer experience were a majority of high-end firms performing at an “advanced” stage, in line with what wealthy shoppers expect; 52% say they make most or all of their offerings available online; 17% are planning to bring substantially all of their offerings online.

“Almost three-quarters of wealthy consumers we’ve interviewed say that they prefer to do their holiday shopping online,” says Milton Pedraza, CEO of the Luxury Institute, which conducted the survey with executives answering via hand-held keypads. “Making products available online is great, but it’s just the start. It’s good news that these executives tell us that they’re working on community building projects like posting online reviews and allowing customers to get closer to the brand and to each another.”

Indeed, luxury firms are adapting their brands and business practices to the Web in response to strong consumer preference for the online experience. Two-thirds of wealthy consumers go directly to websites of known providers when shopping for luxury goods. Firms are now obliging these shoppers: 42.4% of executives say their companies provide complete information on all of their offerings, while 39.4% say that they are in the intermediate stage of delivering comprehensive product information.

Slightly more than half of wealthy consumers launch their online luxury shopping experience with a search engine like Google or Yahoo! Luxury firms understand the critical gatekeeper roles played by these portals and 45% have advanced programs for optimizing search results to bring more traffic to their sites; 30% are in the intermediate stages of search engine optimization.

But there are areas in which luxury firms still fall short. “Ironically, the same executives who understand the importance of search engine optimization don’t seem to care what their customers are saying about their brands on the Web,” says Pedraza. “Despite the fact that 84% of wealthy customers tell us that they visit ratings and review sites, only 14% of companies track online customer comments, and only 12% post customer reviews on their own sites. These customers need to be engaged, not ignored.”

Clearly, a large segment of luxury firms do understand the importance of online community building: nearly 40% have plans to host their own online customer community, but 25% do not.

“Even more than online shoppers overall, wealthy consumers have come to depend on the Web as the primary avenue through which they experience brands,” says Pedraza. “With more of a focus on community building and value-added interactivity, luxury firms have a fantastic opportunity to build stronger customer relationships.”

Luxury Interactive 2008 is one of 60 conferences produced annually by WBR and attended by 10,000 senior executives from Fortune 1000 companies. “This year’s program focused on online tactics and strategies, covering everything from search optimization to mobile marketing, in an interactive forum that provided real-time feedback to attendees,” says Lori Holden, executive director of WBR. “One perfect example was Milton Pedraza’s dynamic Keynote presentation.”

The data from this and related surveys of the high net-worth market are available to members of the Luxury Board at

www.LuxuryBoard.com

About the Luxury Institute The Luxury Institute is the uniquely independent and impartial ratings, research and executive education institution that is the trusted and respected voice of the high net-worth consumer. The Institute provides a portfolio of proprietary publications, research and courses that guides and educates high net-worth individuals and the companies that cater to them on leading edge trends, high net-worth consumer rankings and ratings of luxury brands, and best practices. The Luxury Institute also operates the Luxury Board ( www.LuxuryBoard.com), the world’s firstglobal, membership-based online community for luxury goods and services executives, professionals and entrepreneurs. To reach the Luxury

Institute, please call 646-792-2669 or go to

 

 

 

www.LuxuryInstitute.com.

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