Study Shows Nearly One in Three Luxury Consumers Bragged About Getting a Good Deal

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The latest Empathica Consumer Insights Panel survey report also found that 28% of consumers said they tell others about their luxury purchase through social media sites such as Twitter, Facebook, or blogs.

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Empathica Inc., a leading provider of Customer Experience Management (CEM) solutions to more than 200 of the world’s most respected brands, announced that its Consumer Insights Panel survey of 5,000 North Americans reveal how consumers research and communicate information about their luxury retail purchases.

The study revealed that even luxury retail consumers are concerned with value in the current economic environment. Although less than 6% of consumers indicate that they bragged about their recent luxury purchase costing a lot, over 30% said they bragged about getting a good deal.

The survey results also showed that almost three-quarters of consumers said they verbally tell others about their recent luxury retail purchases; 28% said they share information about their purchases over blogs, Twitter, Facebook, or other social media websites.

Consumers’ Research Habits for Luxury Goods

Prior to committing to a luxury retail purchase, however, three in four consumers admitted to spending considerable time researching products. In fact, more than half of respondents said they felt they spend more time researching their luxury purchase today, as opposed to two or three years ago. In many cases, consumers reported using more than one channel to gather information, such as reading online reviews (45%), visiting the brand’s website (68%), and going to the brick-and-mortar store (67%).

“Generally, consumers’ reasoning for making the luxury purchase wasn’t to have the best of whatever their peers had, or even to be the first to have an item,” said Emmanuel Probst, VP of Retail at Empathica. “A significant number of consumers – nearly one in three – said they justified their purchase because it was a reward for themselves. Eighteen percent of consumers said they had simply been delaying the purchase for awhile.”

Many Luxury Retailers Not Following Up With Consumers Post-Purchase

With the variety of channels available today, consumers are more educated about products and services prior to purchasing them. “They are not only expecting to receive great customer service at the point-of-sale, but after the sale as well. There is often a missed opportunity after the sale, when many consumers would like someone to check in on their overall purchase experience,” said Dr. Gary Edwards, Chief Customer Officer at Empathica.

Despite this, the Empathica survey found that post-purchase communication was largely ignored by today’s luxury brands. More than a third of consumers (35%), in fact, reported that a luxury retailer did not communicate with them at all following a luxury purchase. Of those that did, half of the consumers reported receiving a follow-up via email.

“The lack of post-purchase follow-up is worrisome, and could be contributing to declining satisfaction with service levels,” added Edwards. “Brands must maintain good channels of communication with their customers, whether it’s in-store, online, through a call center, or another outlet. Luxury retailers need to understand that since many consumers admit to some ‘bragging’ about their purchase, it only makes sense to facilitate positive recommendations through some form of post-sale follow-up to complete the service experience.”

“If consumers do receive good customer service, as well as a good deal, they are more likely to share it not only with their friends but with their online community,” added Probst. “Post-purchase follow-up is so crucial today to encourage active brand advocacy. It’s necessary to ensure the entire experience -- from pre-purchase research to in-store interactions with staff, to post-purchase communications -- is as fluid and as simple for consumers as possible.”

For more information about the Empathica Consumer Insights Panel survey reports, visit http://www.empathica.com/insights/.

About the Empathica Consumer Insights Panel:
The Empathica Consumer Insights serves as an authoritative voice on consumer based economic indicators; the retail, financial services and restaurant industries; consumer shopping intentions and customer satisfaction as reported by thousands of consumers in the U.S. and Canada. Results from Empathica’s Consumer Insights, led by Dr. Gary Edwards and Empathica’s Consumer Insights’ team, are published several times a year. The results are based on outbound Internet surveys with Empathica’s growing Insights Panel, derived from more than 30 million consumer surveys per year. Results have been weighted to reflect latest Census distributions in the U.S. and in Canada, including Region, Gender, Age and Income.

Aforementioned data is reported by the Empathica Consumer Insights Panel – Wave 2 2011, Issue 3.

About Empathica:

Empathica provides Customer Experience Management programs to more than 200 of the world's leading brands, ranging from multi-unit retailers, to banks and restaurants. Its rich analysis of survey data using state-of-the-art surveying and dashboard reporting software allows for performance-improvement solutions, evidence-based marketing insights, and customer experience management consulting. Annually, Empathica's 30 million customer surveys in 25 languages reach more than 70,000 locations. A privately-held organization, Empathica is headquartered in Mississauga, Ontario, Canada, has an office in Birmingham, England, and U.S. executive consultants in New York, Chicago, Los Angeles, Atlanta, and Bozeman, Mont. For more information about deriving actionable insights that enhance a brand's operational excellence, visit Empathica at http://www.empathica.com.

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Lauren Eichmann

Bruce Warren
Empathica
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