Consumers who frequent luxury stores say that the products are by far the most important attribute for high-end retailers, despite 'items from exclusive and emerging designers' being of the least importance, according to the 2006 AlixPartners Luxury Department Store Research Study.
The study was set up to monitor consumer expectations regarding luxury retailers in terms of the importance of product, price, experience, service and accessibility. On a scale of 1 to 5, "product" earned a 4.16 average rating, followed by experience (3.82), accessibility (3.81), price (3.69), and service (3.33).
The research suggests that consumers expect luxury retailers to offer a broad assortment of high quality items in exchange for their loyalty and willingness to pay higher prices. Indeed, the study found that luxury consumers now place great value on consistent quality across a wide range of fashionable and flattering products.
According to AlixPartners managing director Frederick A. Crawford, "What is surprising is that of the seven questions we asked about product, consumers ranked items from exclusive and emerging designers dead last. This points to an emerging trend we see among consumers, even wealthy consumers, to choose products based on perceived value and style, not just a name. This has important strategic implications for luxury retailers in how heavily they emphasize house and traditional labels, versus the latest hot designers."
The importance of service
Although the service attribute was ranked last in importance to the customer, basic services - such as the ability to easily return merchandise or having an associate who is knowledgeable and available - are still very important to luxury consumers. But many of the value-added services offered (e.g. salons and spas, personal shoppers, and delivery services) did not score very highly at all.
"While there is a lucrative and attractive segment of the luxury customer base that values these add-ons, they are not nearly as important as providing the basic services luxury consumers expect across the main store," Crawford warned. "It is therefore a mistake for luxury retailers to focus on the value-added areas at the expense of the main store."
When asked about employee attributes, the most important attributes were:
· Courteous and respectful employees (4.54);
· Quick, hassle-free merchandise returns (4.53).
The most important accessibility attributes were:
· A clean, well-maintained store (4.54);
· Ease of finding products (4.36);
· Convenient hours (4.25);
· Convenient parking (4.25);
· Valet parking was much less important (2.37).
In terms of price, the most important attributes were:
· Well-marked prices (4.27);
· Significant savings during sales (4.17);
· Honest prices (4.14).
In contrast to mainstream shopping channels, the attributes that were considered less important to luxury consumers were:
· Getting the lowest price available (3.58);
· Prices remaining constant (3.70).
The study asked 850 luxury store customers 63 questions designed to understand what is most important to them when shopping in the luxury department store segment. Each question received a score from one ("not important at all") to five ("very important"). The study also asked these consumers which stores were doing a good job for each of the five purchasing criteria (price, product, service, access and overall experience).