By their very nature, luxury brands should excel at building deep, trusting relationships with their clients over transactional-minded mass-market brands, but affluent consumers indicate otherwise.
“Affluent consumers globally consistently make high value, high risk, high investment and high emotion purchasing decisions with luxury goods and services brands,” says Luxury Institute CEO Milton Pedraza. “It stands to reason that they should overwhelmingly trust luxury brands with their data far more than mass-market brands, but this is not yet the case. In a digitized world where privileged access to personal data for advanced personalization and deeper relationship building will be absolutely critical, luxury brands need to step up their trust quotient far above commodity mass-market brands immediately.”
The numbers according to the New York-based Luxury Institute’s new State of the Luxury Industry 2020 report:
- 55% of affluent consumers would voluntarily provide data to companies and brands that they trust in return for reassurances of privacy protection and delivery of advanced personalization.
- 64% of affluent consumers agree that luxury brands want to build trusted relationships with them more than mass-market brands.
- 52% say that they trust luxury brands with personal data more than they trust mass-market brands.
- 75% of affluent consumers younger than 40 years of age indicate a greater willingness to share personal data with luxury firms, while only 39% of those 40 and older say the same.
- 89% of affluent consumers in China trust luxury brands with personal data more than they do mass-market brands; conversely only 31% of affluent consumers in Canada and the US and 34% in the UK trust luxury brands.
- The average age of affluent consumers surveyed in China is 34, while in the US the average age is 54.
- Globally men (54%) are slightly more likely than women (50%) to place greater data-sharing trust in luxury brands. In the US, men (35%) vs. women (27%) are more likely to do so.
- France is the only country where women (58%) were more likely than men (45%) to place more trust in luxury brands than mass-market brands.
- Higher-income consumers (59% vs. 46%) and those with higher net worth (56% vs. 51%) are more likely than those with lower levels of income and wealth to agree that luxury brands want to build a trusted relationship with them than do mass-market brands.
- In the US, 41% of consumers earning more than $250,000 per year place greater trust in luxury brands, compared to 25% of those earning less than $250,000.
- Age: Globally, younger consumers place greater trust in luxury brands.
- Gender: On a global basis, men are slightly more likely than women to place greater data-sharing trust in luxury brands.
- Geography: Chinese consumers have the highest level of trust in luxury brands.
- Net Worth: Trust in luxury rises with income and net worth.
Photo: Christian Wiediger via Unsplash