New York versus Shanghai. The battle between consumers of these two metropolises is on and it looks like Shanghai consumers are ahead in terms of spending.
Shanghai luxury consumers are set to outspend their fellow shoppers in New York City next year, according to a recent study.
Milan-based company ContactLab’s “Luxury Digital Behavior Study” examined the habits of consumers between the ages of 25 and 54, interviewing 922 New Yorkers and 975 Shanghainese. Twenty-six percent of the New York pool lived in upscale Manhattan. Similarly, 19 percent of respondents were from the Shanghai Inner Core, the city’s most upscale area.
Four out of five Shanghai residents surveyed purchased at least one luxury product within the past year, and 91 percent say they will be ready to purchase another item within the next six months, compared to just 77 percent of New Yorkers. The majority of respondents in both cities said that their next purchase will be for themselves, rather than a gift. The study also found that Shanghai consumers plan to outspend those in New York by 66 percent when they purchase their next luxury item.
The study’s primary focus was shoes, handbag, and apparel. Shoe purchases is expected to stay stable, while the handbag and apparel categories will experience increased sales. Sixty-nine percent of Shanghai consumers said they had bought luxury apparel in the past twelve months, spending an average of $1,010, a number that is expected to grow to $1,759, as the percentage of potential luxury consumers rises to 86 percent.
Of the three categories, handbags seemed to be slightly more popular as gifts, noted by 25 percent of Shanghainese and 30 percent of New Yorkers.
The biggest differences between the pools of consumers was in their mode of shopping. Forty-six percent of New York consumers said they only shop offline, while 13 percent only made purchases online. In Shanghai, 53 percent of those surveyed were offline-only shoppers, while those who solely used the Internet made up only 4 percent. Statistics for consumers who use both channels were similar in both cities. Consumers who use both channels also have a tendency to spend more on their purchases than those who don’t.
Both Shanghai and New York respondents do their research before purchasing a luxury product. More Shanghai consumers (66 percent) refer to a brand’s official website before purchasing than consumers in New York (52 percent). In general, those in Shanghai place greater value on human advice when making a purchasing decision than those in New York, who favor magazines.
Thirty-five percent of New Yorkers and 31 percent of Shanghainese said that they looked at e-mail newsletters from brands before purchasing their products. In an interview with Luxury Daily, director of ContactLab’s agency department Arianna Galante stressed the importance of emails in luxury marketing, and noted that brands should localize their e-mail promotions to succeed in the international marketplace.
“For luxury brands it means not using email to just push sales, but really communicate the brand story, talking about heritage, craftsmanship, history, making email marketing programs more intricate and more relevant to each consumer, because that’s what luxury is,” Galante said.
image credit: jonathan kos-read