APRIL 18, 2011

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McKinsey: Chinese Consumers Will Account for Over 20% Of The Global Luxury Market By 2015
As noted in a previous CNtelligence article (see “7 Trends That All Luxury Brands Should Follow in 2011, And Beyond”, 3/28), robust luxury sales in China played a key role in keeping the global luxury market afloat during the recession. According to new McKinsey research, China will account for about 20 percent, or 180 billion renminbi ($27 billion), of global luxury sales in 2015. To get a better idea of the dynamics of this key market, McKinsey surveyed more than 1,500 luxury consumers in 17 Chinese cities in spring 2010. Three findings stood out: 1) Shifting attitudes - more Chinese consumers than ever feel comfortable buying luxury goods. 2) Greater sophistication - with the surge in the number of luxury stores, fashion magazines, and Web sites and the use of social media, Chinese consumers are now familiar with nearly twice as many brands as they were in 2008, and are becoming savvier about the relationship between quality and price. 3) New geographic markets - rapid urbanization and growing wealth beyond China’s largest cities are creating a number of geographic markets with sizable pools of luxury-goods consumers.
So what? It will be crucial for Condé Nast to keep track of our luxury advertisers’ global strategies in order to effectively compete in this increasingly global marketplace.
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High Fashion Brands Finally Unite Online And Offline Experiences
According to Iconoculture, high-fashion brands are finally uniting their online and offline worlds, combining the social and brand reach of the Internet and social networking sites with the experiential and tactile elements essential to selling luxury goods. Iconoculture states that in spite of being in a business based on creating trends and breaking new creative ground, luxury fashion brands have been among the slowest to adopt the possibilities of online and social media interaction with their customers, for fear it would harm their hard-won exclusivity. Now, a burgeoning group of brands are bringing customers – and mere fans – closer than ever before.
So what? Articles like this reinforce the notion that Condé Nast needs to grow our social media capabilities and offerings for advertisers.
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Kantar Retail: 2011 Is A Pivotal Year For Apparel
Kantar Retail, one of the leading retail intelligence companies in the world, believes that changing shopper behaviors and consumption patterns, evolving purchasing dynamics, rising commodity prices, and new competitive threats all lead to 2011 being a critical year for the apparel industry. In a recent paper, Kantar identifies 10 key apparel trends that will be essential for players in the space to watch. One of the key underlying themes of the paper is that retailers must embrace the drastic changes that are taking place in shopper behavior due to technological advances and provide the customer with a seamless multichannel model that integrates the in store experience along with e-commerce, mobile, mobile commerce, location-based, social media, augmented reality, etc.
So what? Condé Nast can help apparel retailers achieve success by providing them with effective integrated media tools and programs that support holistic shopping experiences.
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How Technology Is Changing The Way We Travel
Previous CNtelligence articles have shown that technology is changing the way we live, shop, and even think (see “Yankelovich: Technology Changes The Way We Think”, 3/14 and “Has Technology Changed The Way We Shop?”, 3/21). In a recent paper, J. Walter Thompson (JWT) examines technology’s effect on the way we travel. After a 4% decline in 2009 due to the global financial crisis, international tourism is spring-boarding back to recovery at a faster clip than experts anticipated. International tourist arrivals were up 7% in 2010—totaling 935 million tourist arrivals— according to the UN World Tourism Organization, which estimates that global tourism will grow between 4% and 5% in the year ahead. These travelers are different from those even a few years ago. They are tech-enabled, with infinite information at their fingertips, and they’re driven to share experiences as they have them. JWT claims that these 21st-century travelers—obsessed with their mobile devices, real-time connectivity and social networking, and expecting instant gratification—will reshape this sector in the years ahead.
So what? Rapid adoption of new technologies challenge all traditional media to maintain relevance.
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Mobile Payment Technology Helps Bridge Digital And Physical Worlds
Thanks to Chet Van Wert, Director of Strategy and Planning, Consumer Business Development, for calling out a provocative study by Forrester that delves into mobile payment technology, and how it will affect existing payment methods as well as marketing and loyalty programs across all industries. Swiping your mobile phone over a reader to pay for purchases is already a reality in other parts of the world, and just about to become one here in the US. Location-based marketing, loyalty programs, brand preferences, and so on can all be rolled up with the ability to complete a transaction with a swipe, creating an “intelligent commerce” capability. Eric Schmidt, Google’s former CEO, was recently quoted as saying that the technology (Near Field Communication, or NFC) “…should revolutionize electronic commerce as well as payments.”
So what? “If the world of e-commerce and mobile commerce is on the verge of enormous change – and lots of smart people believe it is – authoritative media companies like Condé Nast will try to find a profitable niche in the new ecosystem.” – Chet Van Wert, Director of Strategy and Planning, Consumer Business Development, Condé Nast
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eMarketer: Digital Will Represent Over 20% Of All U.S. Ad Spending By 2014
According to a new report by eMarketer, US online ad spending is on a steady post-recession growth trajectory after a small dip in 2009. This year, online ad spending will reach $28.5 billion, up 10.5% from last year’s record-breaking $25.8 billion spend. By 2015 online ad spending will be worth $44.5 billion. The online gains eMarketer expects will be more substantial than those in traditional media, meaning online ad spending will make up an increasing share of overall US ad spending: from 15% in 2010 to 21.5% in 2014. Several key factors are driving the steady increases in online spending: the reliability of digital marketing, the fact that large brands are beginning to rely even more on the Internet, and an influx of more small and medium-sized businesses into the space. In addition, more brands than ever realize that they can’t fully reach their target audience without including digital advertising in their efforts.
So what? Reports like this reinforce the importance of full participation in multiple platforms.
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Quick Takes
U.S. Major Media Ad Spending (2009 – 2011)
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List Of The Week: Which Online Publishers Deliver The Most Ad Impressions?
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Who Is Winning The Global Market Share Battle Among Internet Browsers?
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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

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