US – Consumers prefer to pay for luxury items online, as a result of the lingering popularity of the flash sale sites that emerged during the economic downturn.
In 2011, flash sale sites recorded a 21% increase in sales, according to American Express. The credit card company has identified two groups of consumers as key online luxury spenders: Generation Y and Seniors.
Although Generation Y accounts for the smallest share of the luxury online market at present, they are the fastest-growing group, spending 33% more on luxury fashion in 2011 than in the previous year. American Express senior vice-president of consumer insight Ed Jay suggests that flash sales ‘sparked consumers’ luxury appetite’. As a result, luxury websites reported a 25% increase in sales last year.
According to American Express, in this ‘post-recession period’
Generation Y consumers have more disposable cash, and are happy to pay full price for newly discovered brands. Furthermore, the relative youth of Generation Y means that they have limited brand loyalty, and are prepared to try new things. The message from American Express is simple: this is a growing consumer group with great potential for the luxury online market.
The Seniors group now dominates the flash sale sites market and members of this group prefer to shop online. But the research also found that online sales do not translate to in-store sales.
For insights into how to create a compelling in-store experience to rival e-commerce, read our Tomorrow Store macrotrend.