The year may have just begun, but consumers’ thoughts and purchase intentions around luxury in 2016 are already set in stone, writes Amrita Banta, Managing Director at Agility Research & Strategy.


From the Champs Elysee in Paris, to Orchard Road in Singapore, luxury brands have long been recognised for their attractive and recognisable boutiques. With their large floor space, high ceilings, and attentive sales personnel, a visit to one of these stores always provides luxury shoppers with a memorable experience for each luxury item they acquire.

However, as the world increasingly becomes a smaller place with increased connectivity via the Internet, more and more shoppers are trying their hand at purchasing luxury goods online, skipping the unique purchase experience for better prices and the increased convenience of the online world.


 While luxury will be serving the same purpose, and meeting similar needs, purchase frequency is likely to vary 


In late 2015, Agility Research, a consumer research firm specialising in understanding the Affluent consumer and luxury brands, conducted a multi-country study covering online luxury shoppers who purchased luxury online in markets such as China, Australia, Hong Kong, Japan, and South Korea to discover their thoughts and purchase intentions around luxury in 2016.


Luxury’s Purpose In 2016

To start off, while luxury will be serving the same purpose, and meeting similar needs to most shoppers across the globe, purchase frequency is likely to vary. For example, for many luxury shoppers, luxury is all about quality, exclusivity, and uniqueness.

This is especially true amongst shoppers in Australia, China, India, and South East Asia (In contrast, shoppers from New Zealand do not place as much importance on standing out or purchasing luxury as a status symbol). However, looking forward specifically to 2016, most shoppers do not plan to spend more on luxury. Only in China and India can we expect luxury spending to increase and also these consumers purchasing luxury as a nationality overseas.



Figure 1


This broad view on luxury purchasing can be linked to overall consumer confidence heading into 2016. At this point in time, with the exception of China, India, Thailand, and Vietnam, most shoppers do not believe that they will be enjoying increased disposable incomes in 2016 (see figure 1). As such, it is logical for these shoppers to curb or simply maintain their luxury spending.


Reaching Luxury Shoppers In 2016

With huge markets such as China and India looking forward to an increase in spending on luxury in the next 12 months, it will be critical for luxury brands to ensure that communication strategies are geared towards these very confident markets.

Online is becoming a trusted resource for many markets, and should figure significantly in the marketing budgets of luxury brands that want to step up marketing in 2016.



Figure 2


Online search and brand websites are oft-cited as key information sources for a number of markets (see figure 2), indicating that many luxury shoppers proactively do their own online research before making their purchases.

Facebook, especially, plays a key role in reaching the right markets as it is the most cited social media source for luxury goods in all markets covered, except for China where consumers rely on Sina Weibo. Moreover, many shoppers, particularly in Asia, rely on their mobile devices when doing their research.

Most interesting is the consumer dependence on brand presence both online (social media/online search/brand website) and in shopping malls. It is likely that luxury brands with a strong presence in shopping centres are also those likely to be considered by those who might be ultimately purchasing online. This is unlike mass appeal brands that can do well even without a brick-and-mortar presence.

In retail terms, brick and mortar stores will still play a significant role in most markets as consumers are still likely to purchase from traditional mediums this year. In China and India, both sizeable markets, the majority of online shoppers are going to continue purchasing luxury online. As such it is still in the best interest of luxury brands to ensure that they keep their focus and attend to online retail needs in these two markets.


What Does This Mean For Luxury Brands?

1) Online, while not a key luxury retail channel globally, will play a significant role in the luxury brand wars of 2016. The brands that are most successful in engaging the right audience via Facebook (or Sina Weibo) in 2016 are likely to enjoy financial rewards within the year in markets like China and India who are both looking to spend more on luxury goods this year.

2) Search Engine Optimisation must figure highly in brand strategies and spending since all luxury shoppers engage in their own online research prior to purchase.

3) Physical retail outlets are here to stay. Most markets will still rely on consumers purchasing via retail outlets, and markets increasingly become more open to online purchasing will prefer brands that have a strong and visible retail presence. In the world of luxury, retail outlets that showcase the uniqueness, and exclusivity of luxury brands are a hygiene factor across any market regardless of where they might prefer to shop at.

4) China, India, and South East Asia, in this order, will be spending the most on luxury brands in 2016. Knowing their needs, and reaching this dynamic market will be critical to luxury brands who realise success this year.



For further consumer insights on Luxury Society, we invite you to explore the related materials as follows:

- Retail: What Differentiates Hong Kong & Chinese Luxury Shoppers?
- Luxury Brands Must Minimise Customer Effort on Path to Purchase
- A Closer Look At Luxury Consumption In Asia

About the author

Amrita Banta

Managing Director , Agility Research & Strategy

Amrita Banta is managing director and co- founder of Agility Research & Strategy, ranked as one of the top 10 luxury research firms globally and the first luxury and premium insights and consultancy firm founded in Asia. To date, she has conducted more than 350 consulting engagements for some of the world's biggest brands in the luxury, travel, and hospitality sectors.