Study reveals luxury brands miss huge opportunities by not understanding their customer

Epsilon and the Luxury Institute release “The new face of luxury”; uncover that brands are targeting the wrong shopper and losing nearly half their customers

DALLAS, TX – December 26, 2014 – Luxury brands lose 50% of their top customers annually because they routinely misidentify their demographic and economic profile while also failing to create a personalized sales experience for them, according to new research from Epsilon and The Luxury Institute.

Epsilon, the global leader in helping clients create customer connections that build brand and business equity, analyzed and compared 30,000 luxury shoppers to uncover insights, myths and stereotypes of the luxury shopper. The study was conducted in collaboration with The Luxury Institute, an independent, global voice of the high net-worth consumer.

Luxury brands mistakenly believe their customers are typically female and on average 45-years old with a net worth over $1 million, the study found. However, 57.5% of luxury spenders are in fact, male. They are likely to be of Asian and Middle-Eastern descent with a net worth over $500,000. Additionally, nearly 13.8% of shoppers with a net worth over $1 million invest mostly in modern, contemporary décor and gifts as opposed to high-ticket apparel items.

“Luxury brands need to truly understand who their customers are and what they are looking for in a luxe shopping experience,” said Jean-Yves Sabot, vice president, retail business development at Epsilon. “This is critical in creating a personalized experience for the customer that drives engagement, retention and satisfaction.”

Key to the report is its break down of the different types of luxury shoppers and the revelation that they are not all alike and therefore should be marketed to accordingly. These shoppers fall into four distinct groups:

  • Aspirational Shopper: These shoppers desire to own pieces from a brand, but may not have the means to do so on a regular basis.
  • Moments of Wealth: This shopper may save for a specific piece, but does not purchase from the brand frequently.
  • Dressed for the Part: This customer purchases luxury items to give off the appearance of being someone who lives a luxury lifestyle, but may not have the financial resources to be a true luxury buyer.
  • True Luxe: This individual has the means to purchase luxury items at will without financial concern.

The study also found that online shopping accounts for less than a quarter of sales for multichannel luxury retail brands, because these consumers typically want to see and touch the product. While 98% of luxury shoppers use the internet regularly, more than 50% of the time they are researching products and comparing prices on their mobile devices. Luxury shoppers crave the experience of the brand and look for a VIP interaction, according to the report.

Based on the study findings, Epsilon recommends that luxury goods marketers consider the following tactics to reach consumers:

  • Use insights to tailor marketing communication to the optimal targets for more personalized and relevant communication.
  • Leverage external shopper behavior for true one-on-one interaction both in-store and online.
  • Tap into third-party data including purchase behavior, to get a complete and accurate picture of your luxury shoppers.


To download the full whitepaper, The New Face of Luxury, click here.

About Epsilon

Epsilon is the global leader in creating connections between people and brands. An all-encompassing global marketing company, we harness the power of rich data, groundbreaking technologies, engaging creative and transformative ideas to get the results our clients require. Recognized by Ad Age as the #1 World CRM/Direct Marketing Network and #1 U.S. Agency from All Disciplines, Epsilon employs over 7,000 associates in 70 offices worldwide. Epsilon is an Alliance Data company. For more information, visit, follow us on Twitter @EpsilonMktg or call 1.800.309.0505.

About the Luxury Institute

Luxury Institute is a boutique research and consulting firm that helps clients to build highly profitable, customer-centric enterprises. We offer luxury intelligence, brand strategy, relationship-building culture, membership associations, and industry and brand events to top-tier luxury brands, as well as startups. For more information, visit