Historically, luxury brands have catered to women as their primary customers, but times are changing. Recent studies show that men spent $39 billion on luxury items in 2018, while women spent just $28 billion.
It’s a takeaway that you must pay attention to if you’re going to be successful in today’s increasingly competitive luxury goods e-commerce marketplace. Here’s what you’ll need to know about what luxury items male shoppers are purchasing (and for whom), what age groups are most active, and how to protect your business against the increased risk of fraud that comes along with selling high-priced goods.
Which Demographic Is Shopping for Luxury Items?
When it comes to going online and making a purchase, millennial males tend to be some of the bigger spenders. In fact, when luxury item buyers were broken down by frequency and purpose of luxury, a GlobalWebIndex survey found that men aged 25-44 made up 67% of the group of customers who regularly made luxury purchases for themselves.
What Luxury Goods Men Are Buying
Those male shoppers who regularly treat themselves to a luxury purchase are often purchasing travel, household and automotive items. But they aren’t focused exclusively on things — splurging on experiences is also important to these “regular treaters,” with nearly 30% of them purchasing an experience in the past 12 months.
Merchants are finding that this target demographic is eager to spend money on luxury goods — not just on themselves but also on others to celebrate special occasions. But although they may splurge on others, they tend to be selective about what they’re willing to spend their money on as gifts. Generally, they spend their hard-earned cash on traditional luxury gifts, like handbags, clothing, and watches and jewelry.
How Luxury Merchants Can Attract Male Shoppers
Luxury retailers hoping to attract the male market will want to focus on developing personalized, custom messages. While clothing retailers, for example, have traditionally targeted their marketing to female shoppers, brands like Gucci are increasingly focused on including their men’s lines into runway shows and website marketing.
Bob Shullman, founder and CEO of Shullman Research Center, emphasizes that if merchants are marketing an offering to both male and female buyers, they must be mindful of identifying and using “themes and words that appeal to both males and females.” But if they’re targeting just the male consumer, they’ll want to rethink their marketing strategy and adjust it to use male-oriented themes and words. By understanding what men are buying — and who they’re buying it for — luxury retailers can better cater to the market’s needs and expectations.
How Fraud and False Declines Affect High-End Sellers
When it comes to defrauding luxury retailers, fraudsters invest a lot of time, effort and resourcefulness into their schemes. The results are subtle fraud techniques that are hard to detect using built-in fraud detection solutions or simple fraud filters — making fraud with luxury goods generally even harder to detect than with other categories of online retailing.
Further complicating the issue is that the shopping habits of luxury retailers often mimic those of fraudsters: high-dollar purchases, shipping addresses differing from billing addresses and ordering from overseas locations. If merchants don’t adjust their fraud prevention solution to account for their customers’ unique buying habits, they may end up incorrectly rejecting a customer’s legitimate transaction.
These false declines can have a significant impact on luxury retailers for two main reasons.
1. Lost Sales
Losing a high-dollar purchase is bad enough for a luxury retailer. But having a transaction wrongly declined can also mean that high-end sellers may end up losing that business for the long term — or even forever.
2. Damage to Reputations
Customers making luxury purchases expect luxury treatment. And if they feel they’ve been treated poorly by a retailer, they’re not afraid to tell their friends and social media followers. Consider this: Social media users with over 1 million followers can make more than $100,000, or even up to $250,000 per sponsored post. Many of these people with massive social media follower counts are the same people buying luxury goods. A poor customer experience can quickly turn into a PR nightmare for retailers.
In a March 2020 study of 1,000 Canadian shoppers, ClearSale and Sapio Research found more than half of male shoppers purchasing more than $260 would never shop with that merchant again after a false decline. Just as potentially damaging was the finding that men who spent $521+ are more than 6 times as likely as men spending less than $65 (17% vs. 75%) to leave a negative comment on social media about having a transaction declined.
But merchants have to be careful about the way they go about confirming a suspicious-looking order, or else they risk losing that order (and potentially the customer) for good. No matter what the dollar amount, at least 67% of men wouldn’t proceed with an order if the merchant asks the customer to send the documentation that confirms that order.
What Luxury Merchants Can Do to Protect Against Fraud and False Declines
Selling luxury goods, you face unique challenges when it comes to screening orders and protecting themselves against fraud and false declines. Your customers expect prompt, top-notch service, which means you don’t get a second chance to get fraud screening right. Even one chargeback can result in significant revenue loss and a skewed chargeback ratio.
But by partnering with ClearSale, the fraud protection leader in the fashion and luxury industries, you’ll sell confidently, knowing our reputation for the industry’s highest approval and lowest false decline rates are behind you.
We never automatically decline an order; instead, our team of more than 700 trained analysts thoroughly examines every gray-area transaction, giving you the assurance you need that your business and your customers are protected. Additionally, our manual review process keeps your customer experience in mind, so your customers feel catered to from start to finish. Click here to speak to a ClearSale expert about protecting your luxury e-commerce business from CNP fraud, chargebacks, and false declines.