“The next generation of ecommerce is going to use rich media and video to support a browsing experience similar to a magazine.”
Catering to Affluent Shoppers Online - An interview with Suzanne Hader
VP of Market Development
Code and Theory
Code and Theory’s Suzanne Hader advises clients on cross-platform ecommerce strategies that focus on the customer experience. Hader spoke with eMarketer’s Tobi Elkin about affluent consumers’ expectations of the retailers they do business with and strategies for improving the online shopping experience.
eMarketer: Have affluent consumers returned to pre-recession levels of spending, or are they holding back because of the uncertain economy?
Hader: No, they definitely haven’t returned to pre-recession levels of spending. That’s something that we won’t see again for probably at least another 10 to 15 years. A lot of brands have fallen off the radar, shut their doors or struggled. Retailers continue to have to whittle down their assortments.
Affluent customers have scaled back on the amount of money they spend, and they’ve focused on particular categories. So whereas before they would pick a fashion category to spend a lot in and would still spend a significant amount in other categories as well, now we’re seeing a hyper focus on a single segment that becomes like a reward.
eMarketer: How has the recession changed the way affluent consumers shop online?
Hader: Saks and Nieman took a big hit in 2008 and 2009, and they haven’t reset their expectations. Now, there’s an expectation that you can buy Marc Jacobs’ most recent season items at 30% off. If that’s the case, why would you ever buy them at full price? An affluent consumer with this expectation will wait a little bit. They don’t need the pieces three months earlier than everybody else especially because of the wardrobe mentality where they’re only buying key pieces that fit with their personal style.
eMarketer: What do affluent shoppers expect from the retailers they do business with online?
“Affluent customers have pretty strict expectations when it comes to shipping. The item must ship within 24 hours and arrive within three days.”
Hader: It’s pretty straightforward—that what they see is what they get in the way that the product is portrayed. The photography has to be truly representative of what the item looks like. They expect no problems with customer service. If they get something and for any reason don’t like it, they expect to be able to return the item easily. Affluent customers have pretty strict expectations when it comes to shipping. The item must ship within 24 hours and arrive within three days. Net-a-Porter has same-day shipping in London and New York, for a fee, and offers free shipping from time to time. It handles returns free.
Retailers that go above and beyond the minimal expectations are more highly regarded by affluent shoppers. Even if you’re shopping with Zappos, which isn’t a luxury retailer but offers free shipping both ways and free returns for a year, then online shopping is associated with a more luxurious experience.
Affluent customers expect online shopping to be a form of entertainment. Video is appealing to affluent consumers. For example, the concept of the runway show has a great deal of emotional value given the way the fashion industry has turned into more of an entertainment industry. Video is an appropriate delivery mechanism for some of those experiences but it needs to be accompanied by robust content, something that’s more akin to a publishing experience. Net-a-Porter has started to break into that with online shopping magazines.
eMarketer: What do you mean by online shopping magazines?
Hader: It’s rich-media content, not just static photography online. Retailers can create lookbooks that consumers can use to change up outfits and try on various looks. The web is useful for this kind of information and idea sharing.
“The next generation of ecommerce is going to use rich media and video to support a browsing experience similar to a magazine.”
The next generation of ecommerce is going to use rich media and video to support a browsing experience similar to a magazine. It might include nonlinear video and some static photography, combined with a social media component. People need a way to get into the online shopping experience when they don’t know what they’re looking for. Integrating social media in a meaningful way is also important.
eMarketer: What does social shopping mean to an affluent customer?
Hader: Say J. Crew could target its highest-spending customers and create a special engagement with them through in-store and Facebook programs. These customers may spend a lot, but they also post a lot of pictures of their favorite J. Crew outfits and how they’re wearing the clothes to the J. Crew Facebook presence. This gets customers more involved with the brand from an engagement perspective, not just a wallet perspective.
You might offer customers free access to review or create their own outfits and put them either on a website or Facebook. They get free rein to be creative. There are ways to bridge mass reviews and the overly architected editorial approach to social media. This helps reward the customers that already value your brand the most.
“The piece that hasn’t been explored yet is how to take the trust that affluent customers have for a highly curated editorial approach and balance it against their distrust of the mass-review approach.”
The piece that hasn’t been explored yet is how to take the trust that affluent customers have for a highly curated editorial approach and balance it against their distrust of the mass-review approach. How can affluent customers who are most engaged with a brand curate the content and looks?
eMarketer: How does the internet inform and influence affluent consumers’ purchases?
Hader: Nonlinear video and dense photography combined with a social media component are key. Retailers need to figure out how to enable social shopping elements and get more participants involved in ratings and reviews. In the affluent space, there are some opinions that matter more than others. For affluent shoppers, it’s less about the ability to star stuff than it is about key influencers selecting or curating items.
eMarketer: Does their online shopping behavior differ from that of less-well-off consumers?
Hader: In certain places it does, only because the price point is higher. Anytime you’re spending more than a baseline amount on an item, you get a little choosier about what information you believe and what you don’t believe. Yes, they do have higher expectations and they do want different things.
In online especially, high-end brands break new ground in providing value from a customer experience. Zappos is an outlier on that one, because it isn’t a luxury brand but redefined the service model and expectations for service. What happens at the high end trickles down to everything else. For example, Net-A-Porter offers same-day delivery in Manhattan. Now you’re starting to see other brands offer same-day delivery in Manhattan. Luxury brands must continue to push the envelope further because the mass brands and retailers want to copy that as quickly as possible.
eMarketer: Are affluent consumers embracing mobile shopping?
Hader: Mobile commerce is more of a generational thing. Young girls are going shopping and taking pictures of themselves in dressing rooms and emailing the images to friends. That’s a form of mobile commerce without anyone really enabling it. That’s an example of where the consumer is really pushing for the experience. The consumer, in some cases, is almost dragging the retailer into it. Retailers are very late to the game with mobile. These customers are maybe 25 or 26 right now, but they’re going to become the next generation of affluent shoppers.
Read the article on eMarketer
