2. THE
NUMBERS
60%
use the internet each month to find
information about luxury goods
ARE
GROWING
54%
would like to see more advertising
for luxury goods online
FOR
LUXURY
BRANDS
51%
use the internet each month to communicate
with friends and family about luxury brands
advertising.microsoft.com
3. Digital Media & Luxury Brands
Objectives of Study Digital advertising has a role to play
Is it appropriate for luxury brands to use digital at every stage of engagement.
channels in marketing communications?
Microsoft has developed a luxury brand • Consideration: The act of researching,
• What are the motivations for purchasing
engagement model which identifies 6 choosing and ‘trying on’ a specific
luxury goods?
distinct engagement points consumers product.
• How do Luxury Lovers engage with have with a luxury brand, how they interact
• Purchase: Offline or online purchasing
luxury brands? with these points and what drives these
consumers to the point of purchase. It is the • Ownership: Membership of the brand
• How open are they to digital advertising? convergence of these engagements through club — purchase represents a higher level
• How should digital marketing be used in multiple channels that build stronger brands of relationship with the brand.
luxury marketing? and drives consumer brand advocacy.
The model describes the six fundamental
ways in which consumers engage with
luxury brands:
Awareness
• Awareness: Consumers actively seek out
information about luxury brands. p
nce Exc
hi
lge
Ad
ers
• Admiration: Luxury goods represent an
l
mir
Own
us
u
Ind
ivit
idealistic set of aesthetic and qualitative
ation
y
standards, and luxury brand advertising
represents a glimpse into a more A luxury
seductive, exciting world. brand
n
Purc
• Exploration: After the initial allure,
atio
Sta
consumers seek to explore, understand tu ali
ty
s
ha
Qu
lor
and authenticate the brand.
se
xp
E
Con
sideration
We can map digital advertising channels to the engagement model allows us to
understand the different roles that each can play in a campaign
Display Ads Search Email Instant Social Custom Desktop
Messaging Networks Solutions
Awareness Targeting first; Sponsored links: B2C: Newsletters C2C: Sharing, C2C: Sharing, Microsite(s) Gadgets Productivity
then environment text + video C2C: Sharing, WOM BOTs WOM Software*
WOM RSS feeds: news,
events, launches,
sales, etc.
Admiration Video Sponsored links: C2C: Sharing C2C: sponsored Microsite(s) Screensavers/
video Sharing Ads destinations Wallpaper
Exploration Link to content, Sponsored links: B2C: Newsletters C2C: Sharing, sponsored Microsite(s) Gadgets
e.g. Fashion Week text + video C2C: Sharing, WOM BOTs destinations
WOM
Consideration Sponsored links B2C: Newsletters BOTs C2C: C2C: Sharing, Microsite(s)
C2C: Sharing, WOM Sharing, WOM WOM My
My Gift Wish List My Gift Wish List Gift Wish List
Sponsored links
Purchase
Downloadable/ B2C: Exclusive UGC UGC Personalized Gadgets
Ownership Shareable newsletters UGC Content Screensavers/
Wallpaper
4. A Passion for Luxury
Our research confirms
a phenomenal
global appetite for
ASIA EUROPE
luxury goods. Total spend last year on luxury goods Total spend last year on luxury goods
We estimate around US$148 billion was US$134 Billion US$14 Billion
spent by online Luxury Lovers last year
Total luxury goods purchased last year Total luxury goods purchased last year
across our Asian and European countries,
of which around a quarter was spent online. 1.9 Billion 820 Million
It’s important to note
that Luxury Lovers also % of goods bought
like to share the love. for self as opposed
to gifting
Around one third of purchases across
categories are bought as gifts.
Designer clothing Designer fragrances Fine jewellery
and accesories and cosmetics and watches
ASIA 72% 66% 65%
EUROPE 67% 58% 57%
The European market comprises of a more mature market, whereas the Asian market is dictated by a younger luxury consumers. While luxury lovers in
Europe are evenly split in gender, Asians are skewed more male. These differences do not mirror their respective populations as a whole.
Understanding the differences between regions and within countries is key to targeting and planning for luxury consumers.
Note that India, China and Russia are characterized by much younger Lovers of Luxury – something which defines their attitudes towards luxury
consumption and use of digital channels
26% Europe
23% Female Male
Asia
18%
16% 16%
18% 56%
16% 50% 50%
14% 44%
13% 8%
6% 6%
7% 6%
4% 3%
18-25 26-30 31-35 36-40 41-45 46-50 51-55 55+ Europe Asia
advertising.microsoft.com
5. The Message of Luxury
Across all regions, we uncovered a common set
of core purchase motivations.
INDULGENCE
o Treating oneself to something ‘special’
o A sensory experience
o Promotes sense of wellbeing
o Premium to the act of indulging oneself
EXCLUSIVITY
o Being part of an exclusive club
o Members define themselves through understatement
o Members take pride in being ‘in the know’
o Members signal to and identify each other through
the brands they display
STATUS
o Communicating status to those around us
o A personal affirmation of one’s own progress through life
QUALITY
o Perceived excellence of design, materials, manufacturing
and craftsmanship.
6. The Motivations of Luxury
Indulgence, Exclusivity, Status and Quality
These four motivations map to either rational or emotional perceived luxury product benefits
RATIONAL EMOTIONAL
o Heritage, expertise, o Quality of o Success o Desirability
reputation manufacturing o Confidence o Indulgence
o Quality of design o Quality of o Wealth o Pleasure
o Quality of materials experience/
o Elitism o Reward
service
Luxury goods purchase in Asia is motivated by the desire to own high-end quality products while exclusivity and indulgence drive luxury purchases in Europe.
While each motivation plays a role in the decision to purchase luxury goods, our analysis suggests that Status is the most variable motivator when comparing
individuals
In Europe, the drivers of luxury consumption are exclusivity and indulgence, whereas in Asia, the primary driver is status
Index scores on each factor (arrows show
direction of mean relative to average)
Indulgence Exclusivity Status Quality
ASIA
(-0.1)
(0) (0.6) (0.2)
(-0.3)
EUROPE (0.1) (0.2) (0)
And differences even appear between
age groups within regions.
ASIA 0.02 -0.29 -0.74
-0.04 -0.02 0.06 0.67 0.48 0.55 0.19 0.20 0.18
0.06 0.08 -0.13 -0.05 -0.02 0.03
EUROPE
-0.09 -0.50 -0.80
0.17 0.19 0.05
18-35 36-54 55+
advertising.microsoft.com
7. Mapping countries according to their affinity with different purchase motivations provides
insights for campaign planning. We found that markets can differ by key motivators which
is important information for advertising strategists.
Germany, Denmark, Italy Spain are markets which are exclusivity-driven whereas Japan,
China are status-driven
The size of the bubbles indicate the online population. Axes show the extent
to which each country over/under indexes on each motivator.
Over-index = right and top, under-index = left and down.
Exclusivity Exclusivity Exclusivity
Driven +1.0 + Status
Germany
Singapore
Denmark
Spain Russia
Taiwan
India China
Sweden Italy Finland
-1.5 Status
Status South Korea +1.5
Switzerland Hong Kong
Netherlands
Belgium Japan
Status
Exclusivity Driven
Norway -1.0
Belgium, Netherlands and Sweden emerge as markets most driven by Indulgence as a motivator.
Indulgence Indulgence Indulgence
Driven +1.0 + Status
Sweden Belgium China
Netherlands
Taiwan
Germany
Spain
Norway
Switzerland Singapore
-1.5 Status
Status +1.5
Denmark Italy Finland India
South
Korea Russia
Hong
Kong
Japan
Status
-1.0
Driven
Indulgence
8. Luxury and Technology
Luxury Lovers are increasingly dependent on
digital media and technology
Our survey data confirm that Luxury Lovers are heavy users of online services and applications.
Used in past six months
Online Activity ASIA EUROPE
Using Email 80% 84%
Online Banking 73% 70%
Online Shopping 70% 66%
Business Purposes 59% 63%
Downloading Music 56% 44%
Instant Messaging 55% 46%
Watching user generated
video clips 54% 45%
Going on social
networking sites 48% 36%
Watching TV 42% 29%
advertising.microsoft.com
9. Luxury Consumers and the Internet
Luxury consumers are already using the internet to both
engage with and talk about luxury brands
60% Researching or 30% Receiving 51% Communicating
sourcing products communications from with others about
or brands brands or retailers brands or products
• Finding out where to buy • Receiving email newsletters from • Forwarding emails or links to friends – to share
a desired product prestige retailers or recommend products
• Establishing a brand’s heritage and • Receiving email newsletters or event • Sending IM to friends about luxury products
‘authenticity’ via its website invitations from luxury brands
• Sending SMS or MMS messages from stores to
• Browsing luxury goods online include friends in purchasing process
There is high acceptance of luxury In Europe, the Internet has an important
display advertising across many role to play in luxury brand inspiration.
online environments (even more so In Asia, the Internet rates highly as a key
for Asian Luxury Lovers) source of inspiration for luxury brands.
% of those who would be happy to see online ads Thinking about luxury items such as fashion, fine jewellery,
on each of the following watches, cosmetics and designer fragrances, which of the
following give you inspiration and ideas on what to buy?
73% Visiting the 63%
Fashion Websites
67% actual stores 79%
Lifestyle, Culture & 67% 65%
Magazines
Entertainment Websites 60% 60%
Travel Websites 42% The Internet 63%
33% 50%
Upscale Community 53% Catalog/brochure 50%
Websites 31% through mail 45%
Major web portals, e.g: 48% Advertising 63%
msn.com 24% on TV 43%
Personal Finance 30% Advice from 46%
Websites 21% friends & family 41%
News websites 30% Billboards/posters 41%
20% 34%
Asia Asia
Anywhere online 35% Seeing what people 35%
19% Europe wearing on the street. 34% Europe
TV Shows 51%
29%
10. Luxury Online Advertising
Over half of Luxury Lovers would like to see more luxury advertising online
I would like to see more advertising of luxury goods on the Internet
% of global sample agreeing with statement
Agree 30% Among the ”Agree” and “Completely Agree” Groups:
24%
25% Completely Agree
Region:
ASIA EUROPE Age:
16-34 34-54 55+
13% 8% 64% 31% 59% 47% 34%
Completely Disagree
Internet is a great way to stay up to date with luxury brands
Agree 34% 34% Among the ”Agree” and “Completely Agree” Groups:
Completely Agree Region:
ASIA EUROPE Age:
16-34 34-54 55+
25%
13% 4% 72% 57% 72% 62% 52%
Completely Disagree
Perhaps unsurprisingly, Luxury Lovers want their favourite
luxury brands to adorn their PC desktop
Mean appeal scores of ad formats (1-5, where 5=very appealing)
Desktop Wallpapers 4 The overall order of preferred
3.6 formats was the same when
Desktop Gadgets* 3.7 comparing key demographics.
3.2
On Cellphones / Blackberries 3.6 Note the higher preference
2.9 for ads on cell phones and
Banner ads on websites 3.6 blackberries in Asia.
3.2
Desktop Screensavers 3.6 Base:
3.1 Total quantitative sample (n=3,603)
Email Newsletters 3.4 *Full text is “Desktop gadgets that
2.9 keep you up to date with the latest
luxury information”
IM Ad banner 3.2
2.5
In Game Advertisement 3.2
2.8 Asia
Search Engine (Ad Words) 3 Europe
2.7
advertising.microsoft.com
11. Microsoft Advertising
channels reach Luxury
Lovers of all demographics
% who use at least
once per month REGION AGE GENDER
Asia Europe 16-34 34-54 55+ Male Female
Windows Live Hotmail 74% 44% 72% 55% 43% 65% 64%
Windows Live Messenger 72% 47% 72% 52% 43% 64% 63%
Windows Live Search 67% 29% 61% 47% 30% 57% 53%
Facebook 58% 31% 60% 36% 15% 51% 48%
Windows Live Spaces 58% N/A** 61% 43% 29% 56% 52%
Windows Live Search
Maps
60% 22% 54% 32% 17% 48% 41%
XBOX Live 1% 17% 6% 6% 3% 5% 6%
MSN Portal 72% 38% 67% 53% 48% 63% 59%
* Base Total Sample (n=3,603)
** This question was not asked in Europe
12. Appendix | Methodology
All research was conducted by London-based Essential Research on Microsoft’s behalf.
Phase 1: Qualitative Research
A multi-stage approach across the US, UK, France and Japan
STEP 1 Media and technology diary
STEP 2 Individual depth interviews
STEP 3 Friendship pair interviews
Phase 2: Quantitative Research
A 15-minute online survey amongst 3,603 “Luxury Lovers” followed by a
wave of follow-up web chats conducted via Windows Live Messenger
ASIAN SAMPLES
South Korea China Japan India Hong Kong Singapore Taiwan
n:253 n:250 n:252 n:250 n:253 n:253 n:251
EUROPEAN SAMPLES
Italy Germany Spain Sweden Switzerland Belgium
n:255 n:254 n:255 n:58* n:255 n:153
Netherlands Denmark Norway Russia Finland
n:256 n:47* n:88* n:251 n:57*
*Note that Denmark, Norway, Finland, and Sweden were combined (weighted by population) and presented as Scandinavia
advertising.microsoft.com
13. Appendix | Internet is a critical source of information amongst luxury goods consumers
You mentioned that you use the internet to find out
about luxury items. Approximately how often do you
use the internet to find out about luxury goods?
Proportion of our sample who use the internet at least
monthly to find out about luxury products
Asia 69% Europe 52%
Proportion of Asian countries who use the internet at least
monthly to find out about luxury products online
Asia South Korea China Japan
69% 65% 78% 53%
India Hong Kong Singapore Taiwan
38% 63% 45% 37%
Proportion of European countries who use the internet at
least monthly to find out about luxury products online
Europe Italy Germany Spain Sweden Denmark
52% 49% 50% 49% 53% 61%
Norway Russia Switzerland Belgium Netherlands Finland
38% 63% 45% 37% 44% 66%
14. For more information contact:
Beth Uyenco, bethu@microsoft.com
Global Research Director
Nancy Ko, nancyko@microsoft.com
Research Manager for Greater Asia/Pacific
Simon Falconer, sifalcon@microsoft.com
Consumer & Emerging Media Insight
Manager for EMEA
advertising.microsoft.com
15. Call on Microsoft Advertising
for a customized advertising strategy
that targets your audience through a range
of digital experiences. We deliver the
innovation and expertise to help you reach
millions of people with just one platform.
