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Luxury retailers are better off not using celebrity endorsements as was evident from the latest research by the Luxury Institute, which interviewed more than 1,000 consumers with median incomes of at least $250,000. There is however some benefit of using charismatic and honest celebrities to raise awareness of a luxury product.
"Indeed, luxury products or services may have a better chance on their own to drive sales than receiving help in the form of star firepower. Only 1 percent of wealthy consumers say that a celebrity endorsement will spur them to purchase a luxury product or service and a scant 5 percent say that endorsements will increase their consideration of such purchases," the Luxury Institute's report concluded.
Thirteen percent of consumers said that celebrity endorsements for a luxury product turned them off completely. A vast majority (63 percent) said celebrity endorsements held no positive or negative impact on a product.
In a tight retailing environment however, the use of well-know celebrities to raise awareness of a product may have some benefit. Eighteen percent of the wealthy overall say that celebrity endorsements help them "become aware" of luxury offerings.
With regard to luxury goods purchases, celebrities enjoy their greatest power to promote in the choice of fashion designers, with 30 percent of the wealthy admitting celebrity influence in this area. "Maybe that's why all of those female celebrities are wearing borrowed dresses and jewelry at awards ceremonies," the Luxury Institute reported.
Celebrities have higher, but still minimal, influence on the wealthy when choosing retail chains.
Effectiveness
If a celebrity is a "must have" for a brand strategy, research authors said that the celebrity of choice must have similar traits to the brand.
Believability is indeed crucial: 55 percent of wealthy consumers who say that they would not purchase celebrity-endorsed products say they would not do so because they fail to believe that the celebrity really uses the product.
Credibility and trustworthiness -two characteristics that the wealthy demand in all of their business relationships- are the most important qualities that an endorser must posses to have a chance at influencing the wealthy. Half of the wealthy also demand that the celebrity is likeable. Only 19 percent of the wealthy say that they care about an endorser's looks and even fewer care whether they have met the person.
The top two personality traits of effective endorsers demanded by more than half of the wealthy are intelligence and charisma. The two next most important traits are friendliness and truthfulness, followed by being energetic and expressive.
In the eyes of the wealthy, Arnold Palmer and Paul Newman both exemplify friendliness and truthfulness. (Former President) Bill Clinton stands out for his intelligence, charisma and energy, but not for trust.
Tiger Woods, Oprah Winfrey, and Michael Jordan (in that order) stand out from the crowd as the best celebrity endorsers capable of influencing buying behavior.
Winfrey, who is also viewed as especially truthful, is four times more likely to influence women's luxury buying decisions as she is those of men. But Woods is almost as influential with women as is Winfrey. Jordan is particularly popular with men between 21 and 39 years of age and he is also admired for his trait of being energetic.
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