IDEX Online Research: Does Social Media Actually Boost Sales & Profits? No, Says Luxury Institute
March 12, 12
(IDEX Online) – There is no credible evidence that a luxury goods supplier with millions of fans on Facebook or other social media sites actually generates increased sales or profits for luxury goods or luxury brands, according to a newly released study by the New York-based Luxury Institute. 
Two million Likes are not generating more sales for Tiffany,
a recent study claims
The Luxury Institute, which bills itself as “the objective and independent voice of the high net worth consumer”, conducts extensive research with wealthy shoppers.
The Luxury Institute’s research shows that luxury consumers are online and are members of Facebook. But there is no credible proof that having millions of Facebook fans – most of whom are purely aspirational – has helped luxury brands to acquire new customers, create better relationships, or generate improved sales and profits.
Luxury consumers of all ages – including today’s young, wired shoppers – do not put any significant value on the social media presence of a luxury brand. Some of those consumers actually react negatively to a luxury brand’s association with mass-market media such as Facebook.
Jewelers who are considering the use of social media should demand that their marketing department prove empirically that they can deliver sales and profits without damaging brand equity, suggests the Luxury Institute.