By Raymond Florio, Raymond.Florio@accenture.com

Although fiscal cliff concerns, economic sluggishness and a massive hurricane may have dampened holiday sales, some sectors — luxury items particularly — could be looking good well into 2013. This upbeat outlook comes from the latest Accenture Luxury Shopping Survey, which examined the shopping behaviors and expectations of more than 2,000 U.S. consumers. Results show that roughly half of all survey respondents plan to make a luxury purchase in apparel, personal care or specialty food & drink in the coming months.

But despite these optimistic projections, the road ahead may still be challenging for luxury retailers. One reason is that, according to our survey, most luxury buyers don’t seem interested in projecting an overall image or creating an enduring style. In the apparel realm, 57% said they’re looking to incorporate just a few luxury items into a wardrobe that is predominantly composed of more-affordable pieces. 

For most shoppers, luxury is dessert — not a full meal. Fortunately, apparel and accessories retailers can still capture the sporadic luxury buyer by offering an appropriate selection of smaller-ticket luxury items to complement their high-end items. For example, a retailer of premium accessories and leather goods may find that its customers are thinking twice about splurging on a designer handbag; but they’ll happily consider a high-quality wallet instead.

Another cause for concern is that brands may be less able to count on their name. According to the study, buyers are placing an increasingly high premium on quality. In fact, 75% of respondents cited quality as one of their most important considerations when purchasing luxury items. Only 25% said the same thing about brand. The bottom line here is that, as consumers begin to ratchet up their spending, purveyors of luxury goods must ensure that the quality and value of their products match the expectations set by the price tags. Otherwise, retailers risk losing customers to another luxury brand, or even to a non-luxury one.

In addition to knowing what luxury items people are buying and why, retailers need to pay careful attention to where and how people shop. In each of the three categories Accenture studied (apparel, personal care and specialty food & drink), consumers indicated a strong preference for going to brick-and-mortar stores when shopping for luxury goods.

The top reason for this was the ability to touch and feel the products (selected by 49%); whereas the top reason for choosing an online retailer was the ability to find the best deal (selected by 37%). In the luxury apparel category, 58% picked department stores as their preferred venue, compared with only 29% who prefer a department store’s website and 36% prefer online-only retailers.

Physical stores also beat online shopping for luxury personal care products: Forty-four percent of shoppers in this category prefer drug stores and 40% favor department stores. Only 22% said they were partial to online-only retailers.

In-person shopping may be good news for brick-and-mortar retailers. However, Accenture’s research also revealed a sharp increase in luxury “showrooming:” viewing and experiencing an item in-person and then looking for the best deal and buying it online. Showrooming is hardly a new behavior, but it has become increasingly popular as smartphones become pervasive and additional daily-deal and member-shopping sites offer luxury products at a discount. 

More and more, customers have the best price at their fingertips — and it may not be attached to the product that they’re standing in front of. In fact, one out of every five survey respondents said they showroom. When asked why they did so, most successfully searched different websites and found a better price. Nearly 40% noted the importance of “finding more product options online.” Others said they disliked the feeling of being rushed in the store and wanted to take their time at home.

At least two lessons are implied by this finding. One is the need to attend diligently, but not oppressively, to in-person buyers and to consider the “spread” between your in-store price and your online price. Second, luxury brands and retailers have made great progress towards improving their online storefronts, but it may be possible that their online improvements have dulled the special nature of the in-store buying experience.

Lastly, retailers need to acknowledge that traditional conceptions of a luxury buyer’s age may be outdated. It’s still true that, on average, older consumers have more disposable income. But look at what age groups are planning to purchase luxury items in the next 12 months according to the survey: 40% of 18-24 year olds; 14% of 45-54 year olds; 15% of 55-64 year olds; and 9% of those 65 and older. Forty percent of Baby Boomers said their inclination to purchase luxury goods has dropped in the past year. True, younger shoppers may have less buying power per capita, but they could make up in volume what they lack in net worth.

None of these findings reduce the need for luxury retailers to continue asking themselves the quintessential question: “What is the advantage of buying from me?” If consumers can’t readily deduce the answer, there’s a good chance that online price-comparison engines, public customer reviews, blogs, barcode scanners, shopping apps and other retailers will make the decision for them. More than ever, thoughtful, seamless strategies and savvy marketing are needed to guide your sleigh through and beyond the holidays.

Raymond Florio is a member of the leadership team of Accenture's pricing & profit optimization practice. He has helped numerous Fortune 500 companies improve their ability to develop, market, price, and sell their products. Prior to joining Accenture, Ray worked in venture capital, assisting with the development of new business plans and venture designs. He can be reached at Raymond.Florio@accenture.com.

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