Key findings include:
- The affluent purchase path is showing definitive signs of shortening, with 88 percent of total purchases occurring within three clicks in 2010. This reflects a 17 percent increase in “short-term” conversions versus 2009.

- Affluent shoppers continued searching online for luxury products throughout the economic downturn, but are displaying significantly increased interest in luxury brands versus a year ago. Customers seeking luxury products more fervently was evidenced with an increase of 20 million search impressions for the brands studied. (Nov. 2009-April 2010 versus Nov. 2008-April 2009)

- Customers are spending more per transaction on luxury goods than a year ago. The most recent holiday season showed average order values growing about $20 per order, or six percent. (Nov.-Dec. 2008 over Nov.-Dec. 2009) And the total number of orders for the 2009 holiday season increased almost 25 percent, with revenue for luxury retailers’ sites increasing 32 percent during this timeframe.

The whitepaper also detailed key findings for specific luxury verticals, including fashion, multi-category and beauty, as well as providing luxury retailers with the “New Rules for Luxury Retailers” in the form of key strategies to employ in 2011 and 2012.

“During the economic downturn, many industry ‘experts’ declared that luxury shoppers would never again be willing to by fully priced luxury goods or that ‘luxury was dead.’ Well, we are happy to report that neither of those predictions proved accurate,” said Vic Drabicky, Director of International and Vertical Market Development for Range Online Media. “While the economic recovery is not even close to complete, this research signals that affluent and aspirational consumers are already shifting their behavior in favor of the luxury brands they’ve coveted during the downturn. They are seeking and purchasing more luxury goods, and in a shorter timeframe from first click to purchase than they were during the height of the economic downturn.”

The study analyzed data from 424 luxury retail brands marketed within the company’s client base. Included in the analysis were the metrics of impressions, clicks, click through rate, CPC, cost, revenue, orders, conversion rates and average order value for November 2008 through April 2010. The Luxe Groupe also examined key economic indicators, such as the Dow Jones Industrial Average, in conjunction with this luxury client data. The client names and data specific to individual brands were not released due to proprietary and contractual limitations.

Please download the entire whitepaper, and read our findings about economic indicators for the luxury retail marketplace.

I suppose negative news is easier to sensationalize than positive news and we all know that sensationalism sells, especially in the news industry.

With all the bad news out there, we are entering a time when we all craving good news – a time when we all need a little positive news in our lives. We are entering what I like to call the “Infomercial Times” – a time when we are all willing to buy that ShamWow or Silver Bullet just because we all truly want something that works as well as the pitch man says it does and because we can get it at such a great price. We just need something positive to grab on to, which means it’s a salesman’s dream.

The same thing is starting to happen in the world of online. As marketers are forced to cut budgets and are continuing to see revenues dip, they are looking earnestly for a definite bright side. Enter a well-timed salesman with a shiny tool that fixes everything, or a vendor with a “can’t miss offer” and you end up with some poor decisions that produces a short term positive impact but long term damage to your brand and business model.

As we all do our best to fight the doom and gloom that seems to fill our days, please don’t fall victim to the infomercial pitchmen. There are no magical solutions, no guarantees and absolutely no short term fixes to solve all your problems. A ShamWow is still just a glorified towel. Snuggies are basically a blanket for suckers. Deal with the negativity just a bit longer, because when it passes, we can all celebrate the raises we got for not making stupid, rash decisions when times were tough.

In other words, we Texans love our bluebonnets. Tell a Texas expat that the bluebonnets are out and you’re likely to get:

1. Tears
2. Smiles
3. Stories about home, Shiner Bock and hot weather
4. All the above

And then, just like that, they’re gone. Hot weather settles in for the next six months and the Texas bluebonnets are the first to go. The next few months are spent pining for them until the fall, when we can be mesmerized by high school football instead. With such a short window for the bluebonnets, you really have to make the most of them.

Unfortunately, times are tougher this bluebonnet season, even though Texas seems to be weathering them better than a lot of other places. It’s a great reminder, however, of the opportunities that lie ahead of us, even in the face of a recession. Sure, customers are harder to find these days and maintaining marketing budgets is a tough sell – let alone increasing them. Everyone’s feeling the pinch right now.

That includes your competitors.

You know, the local guys who had just a little bit of a leg up on you before this? The huge national chains that seem to have you beat on size of selection and price point? They’re all having to cut their budgets, too. That means that there are going to be fewer voices fighting for the attention of your potential customers. There’s a vacuum that can be filled by anyone who has the courage to step up and keep their profile high during this time.

While it’s tougher to get shoppers to buy than before, the bar for being able to reach customers and to put your brand in front of new faces is lower than ever. Finding ways to make the most of your branding opportunities and ways to reach new customers through targeted and low-cost methods online – especially through SEO and paid search programs – will not only help you to find new customers to take the place of those that aren’t buying right now, but will help establish your brand in the minds of consumers at a time when everyone else is pulling back their efforts to do so.

Like bluebonnet season, however, the window is short. By some estimates, the US will be pulling back into positive territory as early as later this year, at which point everyone’s advertising budgets will start to rise again and it’ll be just as difficult to get your unique message heard across the din. Optimizing your current campaigns and looking for ways to drive new, free or cheap traffic via natural search, social networking and feeds or even stepping out into broader branding campaigns are ways to find new revenue now and plant the seeds for further revenue down the road.

Bluebonnet season 2009 is definitely in the sunset of its days, so in Texas we’re all looking for ways to squeeze in a few more memories while the opportunity is there – how about you?

True, we are not in the best of times – the retail world is hurting for sure. But the hysteria flooding the market right now does little but produces more doom and gloom and further skew everyone’s perception of what is really happening. Instead, I propose a two-pronged approach to handling this little “recession” we are in:

1. Celebrate the Good News – For all the bad news out there, there is a decent amount of good news as well. Retail stocks are on the rise as of late, March losses are less than expected and Jos. A Bank’s is even reporting a 15% jump in net profit last quarter. This by no means is an indication the recession is over and we can go back to our free-spending ways, but it is a sign that not everything is terrible. Celebrate these pieces of good news as signs that the end of the world is not the only possible outcome.
2. Don’t Cower in the Corner – Yes, times can be scary, but cutting budgets and cowering in the corner and crossing your fingers isn’t the solution. Instead, use this time to challenge your teams, your agencies and your partners to innovate and become more efficient. Use this time to improve your business – find ways to run smarter campaigns, improve your customer experience, make customers happier!

Yes, this approach may seem a little idealistic and is definitely easier to write than it is to execute, but think of it this way: would you rather be Chicken Little always worrying that the sky is falling or would you rather be the person that just happened to improve your company (both short term and long term) should the sky just happen to stay up in the sky?

I’d like to point out that my foray into luxury retail was only made possible by ridiculous markdowns, and this got me thinking. I had turned into the type of consumer luxury marketers work to avoid: the ultra price-sensitive shopper who wanders and browses, never really associating with any particular brand. They’re sort of like Dory, the absent-minded fish from Finding Nemo, if Dory shopped for discounted Burberry handbags. Luxury retailers don’t really target these people, because while certain price-conscious shoppers want to purchase from designer labels, they don’t care about which one they’re buying—only that they are getting something fancy for 40% off.

Luxury brands might not be interested in bargain-hunters, but they are VERY interested in so-called Aspirationals, or those who aspire to luxury. Luxury retail is essentially a lifestyle choice, and just as regular people who want to be associated with rock music wear AC/DC shirts, people who desire association with luxury wear shirts from A/X. These people might only have a couple high-end items they wear over and over again (if you know what a $30k-a-year-millionaire is, we’re on the same page), but they are very brand conscious and spend what they can. You’d think that a luxury brand wouldn’t want this segment so much either, but it turns out that there are way more people who want to live a life of Prada than people who can actually afford to. These people still spend a lot of money, even if owning a pair of Versace jeans means they have to pick up an extra shift to pay the phone bill.

So what happens with Aspirationals’ spending habits when their income takes a hit, say for example, during a global recession? Curiously, none of the presentations I attended at Luxury Interactive really defined the luxury customer or the element of aspiration involved. I didn’t walk away with a solid sense of how we were going to work to address the chasm that now exists between the spending levels of yesterday and today. How do you measure the aspiration shift and better yet, how do you shift the crowd? If you can no longer aspire to buy a new coat and handbag once a quarter, maybe you’ll aspire to “timeless” luxury and buy a single higher-priced purse that will get you through the whole year. This is obviously the tip of the iceberg; there’s merchandising, inventories, margins and on and on and on to consider. As for me, I’m just ready to at least hear some honest talk around it. I’m ready to learn how to not run into me again.

Five Tips to Cope — or Even Thrive — Through Downturn
A Dig Through Ad Age Archives Reveals How to Grow in Adverse Times

LOS ANGELES (AdAge.com) — Ad Age has dug deep into our archives to analyze the issue of innovation during three of the worst times: the Depression and recessions of the early ’70s and early ’80s.

It certainly caught my attention so I clicked through only to find out that in order to access THE GOLDMINE I’d have to pay for the whitepaper.

Sigh.

Exactly AdAge, release a paper that was only created because of the*unforeseen events of today’s economy and then charge for it! Brilliant! Thriving in your own downtime and then pimping it out to my inbox. Disguised as help!

You sneaky little devil.

*depends on who you ask