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Luxury Diamond Consumers Mostly Purchase Online Diamonds

2008: Luxury Diamond Consumers Spend More Income on Their Home

January 2008

Internet-based social networking sites are appealing to not just young web surfers, but older and more affluent consumers as well, according to a Unity Marketing study.

Over 40 percent of luxury consumers visited a social networking site, such as Facebook, YouTube, MySpace, etc. in the fall, according to a Unity Marketing survey conducted in October among 1,074 affluent consumers who made at least one recent luxury purchase (average income $150,200 and age 43.6 years).

"This study shows the method behind Microsoft's 'madness' in paying $240 million for only 1.6 percent of Facebook. It isn't just kids visiting the social networking sites like Facebook anymore. Even middle-aged affluent consumers are networking online," says Pam Danziger, president of Unity Marketing and author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience.

"Young affluents, those 40 years and under, were the most active social networkers, but even one-third of the over 40 year old consumers reported visiting a social networking site."

The research study also found that 46 percent of buyers of luxury fashion, fashion accessories, cosmetics, jewelry and watches used the Internet in support of their recent luxury purchases.

"The Internet has a powerful influence on luxury consumers in terms of their spending. For example, those customers who used the Internet for home luxury purchases spent 11 percent more on their homes, while those who used the Internet for their personal luxury purchases spent 12.5 percent more on average buying fashion, jewelry, watches and cosmetic products.

"They used the Internet both to research purchases, especially to compare prices and read other customers' reviews, as well as to make purchases. The research also shows that they will visit a retailers' website to 'browse' before they head out to the store. The lesson is that luxury marketers and retailers which offer their customers a website get a significant return on investment in terms of more spending," Danziger says.

When it comes to the features that luxury consumers value most in the Internet, the convenience of shopping at home tops the list, along with the wide selection of merchandise available online. Consumers also cite tools that the Internet gives them to compare prices and evaluate product features.

Among the pitfalls: 35 percent of luxury consumers are discouraged from using the Internet because of difficulties in returns and exchanges. And 21 percent are uneasy about making big ticket purchases, for example kitchen appliances and jewelry, online. 



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