MAY 06, 2013

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Lifestyle/Luxury
Trends from the State of Luxury 2013
During the Luxury Roundtable: State of Luxury 2013 conference last week, the Boston Consulting Group presented insights about the global luxury market and emerging key trends that define the new age of luxury. Evolving consumer values As consumers shake off their recession blues, they have started to value family time and experiences over material possessions, which can be lost or given up. The wide adoption of social media and sharing has also contributed to consumers valuing one-of-a-kind, luxury experiences, as their personal memory lasts a lifetime, and sharing of the experience offers a type of currency that can increase their social standing. Consumers are starting to value "being" over "having" and meaningful consumption over conspicuous consumption. New hotspots of luxury consumption While Western countries are moving toward “being,” Chinese consumers still value “having” and are increasing their consumption of luxury goods. China’s luxury market has grown to $156-169 billion. Cash flush, Chinese travelers spend most of their travel budget on shopping (40%), followed by accommodations (21%), meals (19%) and entertainment and other expenses (19%). They travel expressly to shop. Furthermore, BCG recommends businesses explore new business models and embrace all platforms. Along with the shift in the definition of luxury from products to experiences, luxury brands should grow with consumers and look to expand their repertoire of business models and incorporate new ones, such as licenses, co-branding, pop-up stores, concept stores, localized stores, and others. Consumers want and expect to find, research, and communicate with (and purchase from) brands across all platforms when convenient for them. Because they are always online, brands have an opportunity to interact with consumers during many touch points in the shopping journey and provide multiple opportunities to purchase.
So what? Luxury continues to go through a transition. The most recent recession spurred a reconsideration of luxury for many. Condé Nast is poised to maintain its place as a reliable outlet for the promotion of luxury products. CN reflects many of the luxury trends outlined by BCG: its magazines provide product and experiential guidance for consumers, it has taken a leadership position in creation of new business and media models and owns a strong multi-platform presence.
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Media
One in Five Americans is Watching Professionally Produced Online Video
In preparation for last week’s digital video showcase NewFronts, the IAB and GfK released a study about what customers do, watch, think and feel about three types of digital video: - TV Online – Network TV shows that are made available online are watched by 23% of US population each month. - User Generated Content (UGC) – Video created by regular people with a homemade look and feel are watched by 31% of US population each month. - Original Professionally Produced Online Video (OPOV) – Video produced only for online viewing, but with professional production quality are watched by 19% of US population each month. Word of mouth is the main way viewers discover new content of all types, followed by social media, search and stumbling upon. Viewers of TV online are most likely and viewers of UGC are less likely to plan ahead to watch something specific. The drivers for watching the three video types are different: viewers watch TV online mostly to be able to watch on their own schedule and to catch an episode they missed on TV, UGC viewers watch mostly for the laughs, and OPOV viewers watch for a wide variety of reasons – schedule flexibility to content that is about their hobbies and interests or that is not available anywhere else. The thing online viewers like the most about OPOV is the flexibility of when it can be watched and the high production value, and they like least that they have to actively seek it out.
So what? Condé Nast Entertainment was a notable participant in this year’s NewFronts, where it announced the launch of more than 30 new online series inspired by GQ, Glamour, Wired and Vogue. These series meet viewers’ growing appetite for professionally produced online video, and the addition of strategic syndication partners like Yahoo!, AOL and Twitter addresses the challenge of making such videos easy to discover.
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Retail/Shopping/Commerce
Shoppers Still Heavily Rely on Stores
In a study spanning eight countries and surveying 6,000 consumers, Accenture measured preferences around shopping across channels. What the firm found was that the in-store experience is still king -- 86% of American consumers like to shop for apparel in a physical store versus 52% who like to shop online and 11% on mobile devices. Those numbers are consistent in Europe, but in Asia (Japan and China), consumers show far more willingness to shop online (70%) and on mobile devices (24%) for apparel. In terms of what determines shopping behaviors, price is still the greatest factor for both offline and online transactions. The next most important factors for in-store shopping are the location of the store relative to the consumer and the brand name of a product. For online shoppers, after price, they are most influenced by shipping costs and quick and easy payments.
So what? Because growth in commerce (and many categories) often comes from digital channels, it is sometimes easy to forget that most retailers' success is still primarily dictated by their in-store traffic and conversions (90% of all retail sales in 2012 were offline according to comScore). Those in-store customers are often byproducts of a much longer purchase funnel rather than direct response campaigns. That longer funnel includes many of the strategies inherent to magazine advertising -- efforts to build awareness and strengthen affinity for brands.
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Culture
Young Moms Are More Savvy About Tech and Social Media
Moms 18-34 are savvier about tech and social media than the average consumer, according to a new report by comScore and BabyCenter. Moms 18-34 are more likely to own a smartphone compared to the general population (81% vs. 54%) and are more active on social media than the average consumer, with 89% regularly using Facebook compared to 74% of general population. Social media is replacing email as a primary mode of communication, 45% of moms say they are emailing less often and communicating more through social media. Moms who use social media are more likely to make an online purchase than other moms and the general population. Shopping above their weight, moms 18-34 were responsible for 32% of all online spending in Q1 2013 although they comprise only 18% of the internet audience. Social media is an important part of the shopping experience: 78% of moms follow a brand for coupons and discounts compared to 55% of the general population. These social media coupons are also a driver of online purchases, with 59% of moms 18-34 having purchased a product because a brand offered a coupon or another promotion on a social network.
So what? With new babies and less time, young moms 18-34 heavily rely on their mobile devices and social media to communicate family milestones, research products, and shop online. Keen to this trend, Condé Nast has already identified a segment of its audience that has been tagged as Lovemark Moms. These moms represent a lucrative opportunity for advertisers looking to boost their E-commerce presence.
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Quick Takes
Elmo is Times Square's Most Ubiquitous Costumed Character
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Disney, Time Warner and Thomson Reuters were 2012's Most Profitable Public Media Companies
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Music Business: Once Driven by Albums and CDs is Now Dominated by Singles and Digital
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Consumers Point to Television as the Leading Offender for Bad Ads
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Condé Nast
Feedback, questions, ideas for future issues? Please contact:

Phil Paparella
Condé Nast Research & Insights | Associate Director
1166 6th Avenue, 14th fl. | NY, NY 10036 | office 212.790.6044 | philip_paparella@condenast.com

Contributors:
Tamar Rimmon | Senior Manager, Digital Analytics
Robyn Hightower | Manager, Research & Insights