The study, which looked at wealthy shoppers ages 25 to 64, bucks the conventional wisdom that luxury shoppers prefer the in-store experience. It finds that while both segments shop online, millionaires vastly prefer online shopping to in-store and are much more likely to use the internet than their not-quite-as-wealthy brethren.
|Photo: George Doyle|
Ultra-affluents, as defined by Google, have net worths of $1 million or more and household incomes of at least $250,000 a year for married couples and at least $175,000 for singles. Millionaires are defined as those with an income of more than $1 million. And while millionaires are a dwindling group after the recent financial turmoil, they spend a lot on luxury goods: $211,267 annually.
Google said it looked at the 25-to-64 age bracket because that is the group most luxury marketers are interested in reaching. However, Peter Francese, demographic-trends analyst for Ogilvy & Mather, said leaving out people older than 64 makes millionaires as a group appear younger than they really are. He cites Census Bureau data that show the most affluent 5% of U.S. households make $177,000 a year or more -- and their average age is 50. That's significantly older than 37, the age the Google study suggests for the average ultra-affluent American.
Even a few years ago, many luxury brands professed the online marketplace was not appropriate for them. "The world has changed," said Pam Danziger, president of Unity Marketing, and a researcher on the Google study. "Companies have got to step up to the plate and adapt."
John McAteer, industry director-retail at Google, added that many chief marketers have misconceptions of their customers as "ladies who lunch." In fact, he said, they are strapped for time and looking to the internet not only to shop but to find product reviews and information.
"All the people we're talking about have far more money than time. The internet provides that time efficiency," said Ms. Danziger. "Customer experience, by definition, doesn't mean in-store experience. It means how people want to be served. ... Sometimes it's so much more convenient to sit down at a computer and not have to set foot in the store."
Here's what Google's study, conducted among 993 people via a qualitative focus group and quantitative online survey, found.