MARCH 23, 2015

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McKinsey: Half of all Luxury Purchases Influenced By Online Content

A new report from McKinsey forecasts that global digital sales for women’s luxury fashion are expected to grow from 3% to 17% of the total market by 2018. The category is projected to be valued at $12 billion globally in three years. In the U.S., annual online sales of women’s luxury fashion are expected to grow 17% in the next three years. The report also examined consumer sentiment about online shopping for luxury items. Americans reported that they intend to make half of their luxury apparel and accessories purchases online during the next year. Search was the top place to start the luxury apparel shopping journey: 46% reported using a search engine to find a specific product and 31% used search to find a particular brand. Whether they bought the item online or in a store, consumers in the U.S. reported that 50% of their luxury goods purchases were influenced by information they saw online.

So what?

Whether it is piquing inspiration or giving practical advice about products, digital platforms are already influencing luxury decisions and will only continue to increase in importance. In the digital Lifestyle Category Condé Nast has ranked #1 in Affluent Millennials for 16 consecutive months and provides advertisers the scale to effectively reach luxury purchasers, who are increasingly relying on digital to influence their buying behaviors.

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Latest Nielsen Report Shows Continued Decline in Traditional Television Viewing

Nielsen's most recent quarterly audience report (Q4 2014) revealed that traditional television consumption continues to soften at the expense of mobile and desktop usage. Media consumption overall is not declining; in fact American adults added 12 minutes to their media day compared to 2013 and spent 22 more minutes with media each day in the fourth quarter of 2014 than they did in 2012. But those gains are occurring within time spent with digital. Americans' time with smartphone and desktops grew by 23 minutes over the previous year and by 33 minutes compared to 2012. In contrast, traditional television viewership decreased by 13 minutes per day versus 2013 and by 19 minutes per day compared to 2012.


So what?

Content providers with a strong digital presence should benefit from this continuing shift in consumer behavior. As we continue to hear more anecdotal and statistical evidence of cord cutting, advertisers will continue to migrate to other media channels to extend reach. 

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Next Up - Generation Z

Northeastern University recently conducted a study of the generation that was born after 1995 and follow Millennials -- Generation Z. The survey of 16 to 19 year olds covered their views on higher education, civic engagement, public policy, technology, financial literacy and personal aspirations. Described as entrepreneurial, independent and self-sustaining, this up-and-coming generation shows a driving motivation to map out their own futures and they overwhelmingly believe that higher education is important. This cohort is naturally technologically as well as socially-connected. At the same time, they value the importance of in-person experiences. Only 15% prefer to interact with friends via social media as opposed to in person. Witnessing the financial woes (student loans and underemployment) of Millennials, Gen Z-ers are concerned about their careers and finances. A good number of them (42%) expect to work for themselves and 72% believe that colleges should allow students to design their own course of study. Finally, Gen Z-ers support equal rights for all, universal healthcare and relaxed immigration laws.

So what?

Gen Z-ers (and their parents) are witnessing the struggles of Millennials. As a result they may be more thoughtful and strategic especially when it comes to education and subsequent career choices. This is also an informed, hardworking, socially liberal group that is showing early signs of being somewhat fiscally conservative.

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Quick Takes
LVMH's Revenue Driven by Wine & Spirits and Fashion & Leather Goods

Source: LVMH, Statista
Growth Slower for Soda than for Bottled Water and Other Nonalcoholic Beverages

Source: Euromonitor, The Wall Street Journal
Social Platform Users Most Likely to Use Facebook Multiple Times Each Day

Source: GlobalWebIndex
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 |

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