Millennials expect experiences over material goods and value authenticity. A survey of 300 MBA students from top global schools found that while millennials appreciate luxury, it signifies fashion and success rather than showing off. Most recent luxury purchases were offline for the experience, but online research influences decisions. Millennials demand digital engagement like mobile apps and exclusive offers. For watches, craftsmanship is most important, and smartwatch functionality could justify higher prices from traditional brands.

1. Research Study:
Authors: Anna Juenemann, Navin Mangalat, Ankit Punn, Helen Shih
Contributors: Amalia Bejinaru, Bob Van den Brande, Alexandra West, Xiao Lan Yin
How Millennials Shop for
Luxury and Watches
Photo credit: Skrekkøgle
March, 2016
In partnership with: Olivier de Cointet, Founder-President at Pluris
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2. WHAT DOES LUXURY MEAN TO MILLENNIALS
IN THE DIGITAL WORLD?
Initial benchmarking research on millennials and luxury
showed the following recurring trends…
Photos: Vogue Paris
1

3. UCI Trend Lab, February 2015
millennials want experiences,
not things
would rather spend
money on a desirable
experience rather than
buying a desirable
object
78%
2

4. activity is happening
on mobile devices
Comscore, 2015
of millennials are
no longer using
desktop computers
to go online
1/5th
the rate of growth of
mobile-only users
versus the growth of
internet users
9x
3

5. BCG Perspectives, 2014
Elite Daily, October 2015
millennials expect
content, connection,
and interaction
expect to read content
from brands before
they make purchases
58% regard authenticity as
more important than the
content itself when
consuming news
43%
post product reviews
39%
4

6. *McKinsey Digital Inside, July 2015
**McKinsey Luxury Shopping in the Digital Age, May 2014
digital is a MUST-HAVE in the luxury client
decision cycle
are in some way
influenced by
consumers’ digital
experience**
(online research of an item,
social media buzz, etc.)
40%
online sales of luxury
goods by 2025
*From 6% in 2015
to 18% in 2025
€70B
55

7. Albatross survey, February 2015
the watch industry is being disrupted
of luxury consumers
preferred the Apple
watch to a luxury
watch
27%
considered the Apple
watch as a
potential substitute for
a luxury watch
15%
6

8. THE HEC PARIS & PLURIS
2016 GLOBAL MBA LUXURY, WATCHES,
AND DIGITAL STUDY
In January 2016, a survey was created and
sent to MBA students around the world to
discover insights on digital habits,
attitudes towards luxury, and openness to
innovation in watches.
7

9. SURVEY FOCUS: MBA’s as MILLENNIAL HENRYs (High Earning Not Rich Yet)
School/
Criteria
Weighted
Salary
(U$S)
Harvard 179,910
IESE 144,992
CEIBS 149,504
HEC 129,544
Tuck 153,896
Michigan 144,159
Bocconi 121,100
Manchester 115,763
RSM 103,626
Average 138,055
MBA Salaries
Source: Financial Times
global MBA rankings 2015
8
Millennials HENRYs
MBA’s
“HENRY’s
are the
gatekeepers
to the luxury
market”
45% of luxury
consumers
are
represented
by millennials*
HENRY: “High earning professionals and entrepreneurs running
households with annual incomes between $100k-$250k.
Increasingly, these numbers include millennials.”
– Fortune magazine, Digiday
Generation Birth Year
Gen X 1960’s-1980’s
Gen Y
“Millennials”
1980’s-2000’s
Gen Z 2000’s-now
Generations
*Shullman Resource Center

10. Cultural Identification: “Which country’s culture and values do you most identify with?”
10%
19%
38%
10%
27%
North and Central
Americas
South America
Middle East
and Africa
Europe
Asia
9
Survey Sample Stats:
300 Surveys completed
26+ Business schools
52 Student nationalities
82% Aged 27-35 yrs old
40% Females
60% Males

11. III. SPECIAL FOCUS
ON WATCHES AND
INNOVATION
Testing current
campaigns
Vetting new ideas
Checking price
elasticity
What values are important to
HENRYs?
What is the HENRY attitude
towards luxury?
I. DEFINING LUXURY
AND PERSONAL
VALUES
II. DIGITAL BEHAVIOR
WHEN IT COMES TO
LUXURY
Online vs. Offline shopping
Expectations of mobile apps
Social interaction with lux
brands
III. SPECIAL FOCUS ON
WATCHES AND
INNOVATION
Testing current campaigns
Vetting new ideas
Checking price elasticity
The survey is structured into 3 parts:
1010

12. SURVEY INSIGHTS
Further references to “HENRYs” refers to the survey sample

13. LUXURY MATTERS TO HENRYs
Initial studies led us to believe that millennials view luxury goods as “overpriced and unaffordable” and
as “showing off.” However, our HENRYs surveyed agree that luxury is important to them.
LUXURY ATTITUDE
INFLUENCES ACTION:
The 66% total percentage of people
who agreed that “luxury is very
important to me” and “luxury matters to
me” were more likely to have:
Illustration: Floyd Grey
…preferred a luxury watch
over an Apple watch
…downloaded a luxury
brand’s mobile app
…recently purchased a
luxury item
57% AGREE:
“Luxury matters to me. I sometimes look
for it and am aware of brands.”
12

14. LUXURY SIGNIFIES FASHION, SUCCESS, AND PRIVILEGE
However, luxury is not free from judgment.
Context is important when it comes to luxury. In the
“other” category, several said “it depends”:
“It depends. For someone, it represents elegance; for
others, just show off.”
“Depends on the luxury product and the context it’s worn in.”
“Depends on how he/she wears the brand. Could be
something between show off or fashionable.”
Others were much more vocal about their distaste for
luxury, viewing those who participated in luxury as:
“Insecure.”
“Boring.”
“Nouveau riche.”
“Possibly tasteless.”
“Needs luxury things to fill an inner empty.”
Fashionable
26%
Successful
25%
Privileged
23%
Show off
13%
Conservative
4%
Not Original
4%
Other
4%
When you see
someone wearing or
using a luxury product,
what do you think of
him/her?
13

15. HENRYs follow the same values as the general millennial population Reports show that
millennials value the following traits: authenticity, eco-friendliness, and craftsmanship. We asked would you rather…
AUTHENTICSAFE, RELIABLE
or…stay in a
4-star hotel
…stay in an
AirBNB lux apt
or villa
45% 55%
SPORTYECO-FRIENDLY
…drive a
Tesla
model S
…drive a
BMW
5-series
55% 45%or
or
TRADITION + TECHHIGH TECH
…wear a
smartwatch
by Apple
…wear a
smartwatch
by a luxury
watchmaker
50% 50%
or
…wear an
Apple Watch
…wear a
traditional
luxury watchCRAFTSMANSHIPHIGH-TECH
25% 75%
14 Cultural Difference: In South America, this preference was 30% Apple watch, 70% smartwatch by a luxury watchmaker

16. Brick & Mortar isn’t dead
The experience of shopping draws
HENRYs in-store…
Of the 90% who made their most recent purchase offline,
30% had purchased a luxury item online in the past
65% Recently purchased a
luxury good or service
48% Wanted to see and try
on the product
16%
Needed more
information, the online
photos/descriptions
were not sufficient
12% Concerned with
counterfeit goods
90% Made their most recent
purchase OFFLINE 10% Made their most recent
purchase ONLINE
“Intimidating and
scrutinizing store
atmosphere.”
32% Purchased online to
save time
32% Purchased online to
find the best price
“Shopping
experience
in a shop is
also a part of
‘luxury.’ I
don’t want to
miss it.”
18%
N. & C. Americas
Made their most
recent purchase
online
Cultural difference:
…But e-commerce has its own role
HENRYs who shop luxury online have different
priorities than offline shoppers – convenience.
54%
N. & C. Americas
Recently purchased a luxury
good/service
Cultural difference:In your definition of luxury, have you
purchased a luxury good in the past 2yrs?
15

17. While store experience is clearly important to HENRYs, it
sometimes falls short of expectations
Top brands mentioned:
Apple
Burberry
12
mentions
Chanel
Hermes
Louis Vuitton
7
mentions
BMW
Prada
6
mentions
Do you consider
Apple a luxury brand?
MBAs clearly do!
65% Recently purchased a
luxury good or service
In your definition of luxury, have you
purchased a luxury good in the past 2yrs?
What did you think about the
overall customer service in your
last luxury purchase?
42%
“Excellent! I would
definitely go back and
tell friends/family.”
50% “Good, but
nothing special.”
16

18. HENRYs demand benefits from branded mobile apps
They expect not only “hygiene” items like an up to date product catalog and store finders, but also
loyalty benefits and access to exclusive products
BENCHMARK: In another study, only 4% of past participants had
downloaded a luxury brand’s mobile app in the past year.
- Digital luxury experience 2013 [McKinsey]
15% YES
What do you appreciate
the most in the luxury
brand’s mobile app?
What would convince you
to download a luxury
brand’s mobile app?
Have you downloaded a luxury brand’s
mobile app in the previous year?
85% NO
· Exclusive offers to loyal
customers
· Detailed and up to date
product catalog
· Language customization /
info on store location
· Access to exclusive or
limited edition products
· Exclusive offers to loyal
customers
· Invitations to special
events near you
· Access to exclusive or
limited edition products
17

19. SOCIAL ENGAGEMENT: Not all HENRYs thinks like fashion bloggers
HENRYs prefer not to broadcast their latest luxury purchases, seeing it as “showing off”
62%
Report NOT engaging online with luxury
brands regarding their last purchase
10% Share a unique experience with
the brand
11% Share a picture of themselves
wearing or using the product
“Sharing such is a horrible show-off.”
“I believe that it is personal and should not be advertised
blatantly.”
Images: Instagram @songofstyle
“How do you engage online with luxury brands?”
23% Share a picture of themselves wearing
or using the product
Cultural difference: Asian respondents said -
18

20. WATCHES

21. 26%
25%
23%
13%
4% 4% 4%
21%
32%
23%
11%
7%
2%
4%
Fashionable Successful Privileged
background
Show-off Conservative/
Traditional
Not Original Other
Wearing or using a luxury product
Wearing or using a luxury watch
20
For HENRYs, luxury watches signal success. One must consider the millennial
definition of success.
“Success for [gen Y] is
a transition from
climbing the ladder of
unfulfilling societal
expectations and
consumerism to blazing
a trail with a life guided
by a holistic focus on
well-being, community
and sustainability.”
-Umair Haque, author and
economist
What do you think of someone when you see him or her…

22. A luxury watch is no longer defined by its price, Swiss heritage, or longevity. Respect
for craftsmanship remains the same. “Smartwatch as luxury” is a polarizing subject.
“A LUXURY WATCH MUST BE MADE IN SWITZERLAND”
“PRICE MAKES A WATCH A LUXURY PRODUCT”
“A SMARTWATCH FROM A TECH COMPANY CAN BE A LUXURY PRODUCT”
“PASSING MY WATCH ONTO THE NEXT GENERATION IS IMPORTANT”
“CRAFTSMANSHIP IS WHAT SETS ASIDE A LUXURY WATCH FROM A NORMAL
WATCH”
DISAGREE NEUTRAL AGREE
27% 12%
24% 43% 18%
35%
21% 26%53%
67% 18% 15%
21% 40%38%
32%29% 39%
16% 76%
8
%
21

23. While HENRYs are active luxury shoppers, there is an opportunity to turn
window-shoppers and non-shoppers of watches into future clients
34% Window-Shopping
30% I never or rarely visit one
18% To try on and decide if I want to buy
12% With the intention to buy
5% For the shopping experience
Why have you never or rarely visited
a watch point of sale?
64% Not interested in luxury watches
14% Other
11% Intimidating store atmosphere
7% Prefer multi-brand store
Why are you visiting a luxury watch retail
store or point of sale?
5% Prefer to shop online
22

24. The HENRY path to purchase is fragmented, but ultimately they prefer the official brick and mortar
store as their strongest preference for place of final purchase.
23
36%
Online sources
31%
Physical store
25%
Word of mouth,
friends
1. Official brick & mortar store
Imagine that you are in the market for a watch. Where
would you consider looking for information before making
a purchase?
19% Search Engines
19% Watch brand site
17% Product reviews
14% Blogs
7% Social Media
2. Official online store
3. Physical department store
4. Travel to a store in another country
5. Online multi-brand store
6. Other (duty free, ask a relative…)
After you narrow down your options, where do you prefer
to make the purchase of the luxury watch?...
Ranking:

25. Existing business models in fashion and luxury were tested for watches. HENRYs were
most excited about the options that offered them customization and value for money.
SHOW-
ROOMING
3D CUSTOMIZED
WATCH
PRE-OWNED WATCH
MARKETPLACE
MONO-BRAND
LOYALTY CLUB
MULTI-BRAND
RENTAL CLUB
Visiting a physical
showroom with staff but
making the final
purchase with full
customization online
Visiting a 3D printing
workshop to customize
a watch design
Using a dedicated
online marketplace for
gently used luxury
timepieces
47% 40% 37% 31% 30%
Joining an online loyalty
club for one brand. The
brand can track my info
and offer me special
events or timepieces
Joining an exclusive
watch club, where I can
rotate/rent special
timepieces from multiple
brands
Percentage of people who agreed they would be “likely” and “very likely” to try one of these services:
24
i.e.: Blue Nile, Cezanne,
Bonobos
i.e.: NIKEiD i.e.: Vestiaire Collective,
The RealReal
i.e.: Sephora Beauty
Insider Program
i.e.: Rent the Runway, Bag
Borrow or Steal

26. When it comes to prices, HENRYs current comfort zone is currently far under the
starting price of luxury watches
25

27. When it comes to prices, HENRYs current comfort zone is currently far under the
starting price of luxury watches
26
Range of Acceptable Prices
$1,006 - $2,073
Point of Marginal Cheapness
The price where the percent of
respondents who think it is
“too cheap” is the same as the
percent of respondents who
think it is “getting expensive”.
$1,006
1
Point of Marginal Expensiveness
The price where the percent of
respondents who think it is
“too expensive” is the same as
the percent of respondents
who think it is “a bargain”.
$2,073
2
Indifference Price Point
The price where the percent of
respondents who think it is
“getting expensive” is equal to
the percent of respondents
who think it is “a bargain”.
$1,507
3
The price where the percent
of respondents who think it is
“too expensive” is the same
as the percent of respondents
who think it is “too cheap”.
Optimal Price Point
$1,250
4
1 2
3
4

28. HENRYs are willing to pay extra for smartwatch functionalities in the classic look
of a watch model.
Imagine that a traditional watch company is introducing a new watch that has the looks of a
classic model, but the functionalities of a smartwatch.
“I think luxury watches are for show-offs. I can at least see a little more logic in a digital watch
with many features.”
27
11% 19% 24% 37% 10%
Willing to pay a high
premium
Willing to pay a small
premium
Would want to pay the
same price
Would want to
pay less
Would want want to
pay considerably less
How much would you be willing to pay for the smartwatch in comparison to a normal luxury watch?

29. RECOMMENDATIONS

30. EVOLVE RETAIL EXPERIENCE TO OMNICHANNEL
• 50% consider the in-store experience to be only good
• HENRYs consider Apple to be a luxury brand (12 mentions)
• 78% would rather spend on an experience than on a product
• Store is still the #1 preferred place to purchase
• 47% are likely to try show rooming
• 31% would join an online loyalty club
Provide a unique, more tangible experience in
stores
Identify key brand values according to customers
to create stronger digital engagement
• 15% downloaded a luxury app
• 10% bought luxury items online
• 1/5 access the Internet only through their mobile phones
• 62% don’t engage online with luxury brands
Create complementarities between online and
offline
29

31. Enable interaction between HENRYs
ENGAGE & COMMUNICATE TO HENRYS BASED ON THEIR HABITS & PREFERENCES
Generate brand content and invest in search
engines
Interact with HENRYs through responsive
online channels
Communicate according to HENRY values, not
only yours
• 40% search online for information
• 16% of offline purchasers did not find the needed info online
• 58% expect to see brand-generated content online
• 32% associate luxury watches with "Success“
• 67% don’t think luxury watches must be made in Switzerland
• Look for “exclusive” options to download an app; they want to
have the attention of the brand
• 20% only access the Internet through their mobile phone
• 40% are influenced in some way by their digital experience
• 39% post product reviews
• 25% of HENRYs rely on friends/peers advice when searching
for a luxury watch
30

32. Offer entry products suitably priced for
HENRYs
OFFER ENTRY LEVEL ITEM FOR HENRYS
• Optimum starting price for luxury watches is $1,250
• +30% disagree that it is the price of watch that determines it
is a luxury item
• Look for value for money items: the relative value in cost-per-
use are important
• 37% would be willing to pay a small premium for a
smartwatch with a luxury/classic look
• 10% would pay a high premium
• 34% only window-shop
• 19% are not interested in luxury watches
Advertise "smart" functions as premium
Widen sales to attract HENRYs
Smartwatches – the new entry-level
product
Smartwatches today are on-trend and fit the
price range
31

33. EDUCATE HENRYs
Educate HENRYs on craftsmanship and
value
• Craftmanship defines a luxury watch for HENRYs
• 23% associate luxury watches with privilege
• 24% associate it with negative values
• 62% do not engage online with luxury brands
• 10% share a unique experience with the brand
Involve HENRYs through "shareable"
brand-experiences
32

34. BRAND CHECKLIST
IS YOUR BRAND CONSIDERING THE FOLLOWING STRATEGIC ASPECTS TO ADDRESS HENRYS EXPECTATIONS?
 High organic search ranking
 Regularly published branded content
 Mobile-friendly online experience
 E-Commerce destination with detailed descriptions, multiple photos, & product reviews
 Communications messaging around craftsmanship or success
 A hands-on in-store experience that “wows”
 HENRY-friendly “entry” level item that shows value for money
 Unique brand experiences that HENRYs can share via social media
33

35. For further questions about the study, please contact:
Olivier de Cointent: oc@pluris.is
Ankit Punn: ankit.punn@hec.edu
Anna Juenemann: anna.juenemann@hec.edu Navin Mangalat: navin.managalat@hec.edu
Helen Shih: helen.shih@hec.edu