New York City The Luxury Institute revealed Tuesday that luxury brands are failing to satisfy shoppers at this critical time in the industry, according to the association’s latest WealthSurvey.
The study, which is based on responses from approximately 500 high net-worth consumers, reported that shoppers want superior quality (82%), superior craftsmanship (78%) and superior customer service (60%) when shopping at a luxury brand. Unfortunately, one-third of these consumers said their favorite luxury brands are operating worse today in these areas than in the past, especially regarding customer service. Shoppers reported that chains are failing to provide knowledgeable salespeople.
Half of consumers who earn more than $200,000 annually, along with 46% of those who have a net worth of more than $1 million, also stated that luxury brands are becoming commodities. Worse, 62% of wealthy shoppers said the current state of the economy has changed their view of the luxury industry.
Like other cost-conscious shoppers, wealthy consumers are also becoming more budget-conscious and they too are re-thinking and re-prioritizing some purchases.
"We have an industry that, according to wealthy consumers, fails to deliver on the fundamentals, especially service and trained salespeople,” said Milton Pedraza, CEO, Luxury Institute. “Luxury leaders need to quickly get beyond the price and cost-cutting exercises and start innovating again on quality, craftsmanship and, especially, customer service.”