PMX AGENCY S TREND REPORT: LUXURY BRANDS ONLINE

PMX AGENCY S TREND REPORT: LUXURY BRANDS ONLINE 2015

TREND REPORT: LUXURY BRANDS ONLINE PMX Agency s annual Trend Report: Luxury Brands Online seeks to illuminate the digital success of today s top luxury apparel brands. In the six years we have published the study, the evolution of the category has been dramatic and enlightening. Many brands once perplexed by how best to approach the Internet are now among the most tech-savvy and innovative. And consumer interest in luxury sites keeps growing. Using site visits, brand searches and social reach as proxies for momentum and consumer engagement, we continue to document significant growth for online luxury apparel. This year s report shows that the highly successful Michael Kors brand grew even more, moving to the head of our top 10 list by total online visits. Even more notable is the luxury category s growth overall, which saw a 20% increase in monthly visits across the combined 70+ brands tracked. Other findings in our latest report include the dominance of mobile (higher for luxury than the marketplace overall), a pronounced reliance on search-for-site visits, the competitive partnerships many luxury brands share with department stores and online shopping sites, the continued prominence of handbags as luxury s key introductory product offering, and the growing interest in luxury menswear. Many luxury brands have become expert at translating the key elements of their offering heritage, authenticity, exclusivity, quality and desire into the online realm and beyond. High price points and prestige aside, luxury apparel s continued online success can be instructive to marketers from all walks of life. 4 Methodology & Data 73 luxury apparel, leather goods and accessories brands (excluding jewelry) were selected to serve as a benchmark for the sector. A few well-known brands with insufficient data were omitted; luxury department stores have also been excluded. Much of the data in this report, excluding data primarily gathered by PM Digital, has been sourced from Experian Marketing Services. For more information, please refer to About PMX Agency & Experian Marketing Services at the end of this report.

2015 FINDINGS The top 10 luxury brands account for 81% of total online market share. The leading brands are Michael Kors, Ralph Lauren, Coach, Louis Vuitton, Gucci, Chanel, Burberry, Louboutin, Versace and Hermès. Michael Kors captured top market share among luxury brands, a first for the fast-growing retail giant, with 19.2% of total visits to sites in the category in the last 12 months.ralph Lauren was close behind with 18.9%. Mobile devices account for the majority of traffic (57%) to luxury sites. Luxury shoppers are far more likely to be on a smartphone or tablet than the average internet user (of which only 35% are mobile). One of five visitors to a luxury brand site comes from an array of other shopping sites, ranging from large retailers and department stores to other luxury brands and even deal sites. Stiff competition is also evident in downstream traffic, where nearly 40% of those exiting luxury brand sites go to some type of shopping site, primarily other luxury brands and department stores, but also online-only merchants and consignment sites. Luxury brands are heavily reliant on search, which drives more than half of all referred traffic. This compares to 40% for the average apparel and accessories site. Additionally, luxury brands paid for 44% of this search traffic. Google accounts for nearly all search traffic to luxury brand sites (more than 9 of 10 search referrals). Its dominance over Yahoo! and Bing is much greater within luxury than other retail or fashion categories. handbags, bags, purses and similar keywords remain among the most popular and continue to show that this accessory is a principal product for attracting consumers to luxury brand sites. Social media drives 5.6% of traffic to luxury brands, with the majority coming from Facebook. Most luxury brands continue to rack up substantial growth in social media followers. Email sites were 3.6% of incoming traffic to luxury brands. Gmail leads the way, with a slight lead over Yahoo! Mail. In addition to the obvious traffic from email campaigns, both sites are popular display ad outlets. 5

IMPLICATIONS Lasting Impressions Luxury purchases are increasingly influenced by what consumers see, hear or do online. Constant connectivity can enable more efficient marketing and distribution of luxury goods, but also encourages greater consumption of luxury content from editorial spreads to ad campaigns that go viral on Instagram. The past year has seen a variety of innovative approaches that exploit ever-morevisual forms of media, shaping brand identity, creating potent touchpoints and igniting the desire to own a particular luxury product. Luxury and Search, Hand in Glove On one hand, the dominant role of search engines in bringing consumers to luxury brand sites speaks to the power of algorithms and a handful of influential tech companies. On the other hand, search is a testament to the enduring allure of luxury brands themselves the payoff for huge investments in branding, product research and innovation. Seemingly humble search results are no less vital than a store s front door, display window or personal greeter. Luxury brands must embrace new advances in search and test new ad types, while optimizing campaigns through bid indexing, event triggers, geo-segmentation and day parting. M-Luxe Luxury consumers are well past the tipping point on mobile adoption, and luxury sites that aren t mobile-friendly are rare. With the majority of luxury site traffic coming from mobile devices, brands must move beyond mere optimization and truly build their online presence around the consumer, as they do in-store. They must focus aggressively on the future, particularly the emergence of new platforms, media and targeting capabilities. While it remains to be seen what impact wearable devices like the Apple watch will have on consumer behavior, mobile will play a central role in the evolution of search and social media. Celebrity Couture A cultural obsession with celebrities has driven more luxury fashion houses to seek out famous faces in addition to professional models for advertising campaigns. Recent video ads have featured popular musical stars like Pharrell and Rihanna. Even the children of celebrities can be chosen, like David and Victoria Beckham s son Romeo who starred in Burberry s From London with Love film. Celebrity endorsement is hardly a recent phenomenon for luxury brands, but what is new is how celebrity brand advocates now come with their own sharable, cross-promotable social media fan base often in numbers that dwarf what luxury brands achieve on their own. Social Influence Social media s visual focus and mass-media reach make an ideal outlet for luxury brands to foster relationships not only with but also between intrigued consumers and devoted brand advocates. With no shortage of social opportunities, where to focus moving forward is still evolving. Highly-visual platforms like Pinterest and Instagram seem best equipped to exploit the eyepopping visuals that luxury marketers are famous for. Unlike traditional offline media, social platforms can also leverage user preferences and historic activity to help luxury purveyors move closer to 6

2015 approximating the customization and attentiveness that is a hallmark of luxury retail boutiques. Clothes Make the Man With men s-only store launches from Prada, Hermès and Gucci to the first-ever New York Fashion Week for Men, interest in luxury menswear continues to grow, and at a faster pace than womenswear. Inspired by sharpdressed actors, hip-hop artists and sports heroes, Millennial men in their 20s and 30s have a growing interest in fashion experimentation and setting themselves apart. Often, they are more expressive and less hemmed in by traditional or staid men s fashion. But that doesn t mean that the same marketing approaches apply to men as they do for women. While there are a growing number of men who like to shop, luxury brands may wish to strike a balance between new product offerings and lifestyle content. Fashion Forward Leading luxury brands are moving aggressively to integrate technology into the consumer experience. By drawing on their artistic traditions, many have created innovative and visually stunning online content, including short films celebrating a storied history and making of iconic products. But while leveraging a brand s rich heritage can be key in an increasingly competitive market, risk-taking is also a critical part of luxury s heritage. As in the other visual arts, there is an eternal mandate for luxury designers and brands to move forward in new, sometimes startling ways to experiment, to surprise. And that sort of creativity goes well beyond technology. TABLE OF CONTENTS Findings & Implications 5 Luxury Lowdown 8 Online Market Share 10 Demographics 12 Sources of Traffic 15 Search 19 Social Media 23 Department Stores & Shopping Sites 35 About PMX Agency & Experian Marketing Services 39 NEW YORK FASHION WEEK MEN S 7

LUXURY LOWDOWN A LOOK AT SOME OF THE KEY STATS DRIVING THE CURRENT LUXURY MARKET $248.8B 2 % - 4 % GLOBAL SALES PROJECTED of personal luxury GROWTH goods for 2015 29 % ACCESSORIES USA 30 % Share LARGEST MARKET 50 % of global luxury goods sales occur while traveling $73.3B SALES 1 % - 3 % PROJECTED GROWTH for 2015 350M GLOBAL LUXURY CONSUMERS 2x MENSWEAR GROWTH outpaces womenswear 8 Sources: Bain & Co., Worldwide Luxury Markets Monitor, 2015 Spring Update

2015 ONLINE LUXURY BRANDS ONLINE AUDIENCE IS GROWING, AND MOBILE-DOMINANT TOTAL VISITS TO LUXURY BRAND SITES 30M 25M Up 20.4 % YoY as of July 2015 20M 15M 207.3M Visits to luxury brand sites, last 12 months 10M 5M 0 Jul-14 Aug-14 Sept-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Peaks During Holiday like the broader apparel and accessories category DEVICE SHARE OF TOTAL VISITS Luxury Brands* 57% Apparel and Accessories* 48% 57 % From Mobile Devices Compared to the average internet user, 64% more likely to be on a mobile device Mobile Desktop Online Population 35% The Height of Luxury This shiny fuchsia Hermès Birkin bag embodies the luxury market s raison d être: that top quality and exclusivity are worth any price. The coveted object, in Porosus crocodile studded with 18k white gold and diamond hardware, set a new record for world s most expensive handbag when it sold for $222,912 (USD equivalent) at a Christie s auction in June. Data source: Experian Marketing Services (Note that total visits reflects web traffic from all devices, including computers, phones and tablets, but does not factor in mobile apps.) 9

19.2% 18.9% 12.1% 9.1% 7.0% 4.3% 3.9% 2.5% 2.1% 2.0% 1.2% 1.2% 1.1% 1.1% 1.0% 0.9% 0.9% 0.8% 0.7% 0.6% 9.4% Michael Kors Ralph Lauren Coach Louis Vuitton Gucci Chanel Burberry Louboutin Versace Hermès Marc Jacobs Ferragamo Dior Prada Tom Ford Jimmy Choo Armani Dolce & Gabbana Saint Laurent Paris Diane von Furstenberg Other luxury brands ONLINE MARKETSHARE BY BRAND Mobile Desktop MOBILE DEVICE SHARE TOP 20 BRANDS Louboutin 68% Gucci 66% Michael Kors 65% Jimmy Choo 64% Hermès 63% Louis Vuitton 63% Prada 61% Versace 60% Marc Jacobs 59% Ferragamo 58% 57% Chanel 56% Coach 55% Dolce & Gabbana 54% Saint Laurent Paris 54% Tom Ford 53% Burberry 52% Dior 48% Armani 48% Ralph Lauren 46% Diane von Furstenberg 10 Data source: Experian Marketing Services, based on total U.S. visits to 74 luxury brand sites in the 12 months ending June 2015. Other includes an additional 53 luxury brands. Data source: Experian Marketing Services, 12 weeks ending 6/27/2015 (Note that this reflects mobile web traffic from all devices, including phones and tablets, but does not factor in mobile apps.)

Michael Kors narrowly captured top market share among luxury brands, a first for the fast-growing retail giant, with 19.2% of total visits to sites in the category. This entry into the lead position was driven by exceptionally high traffic to MichaelKors.com during Holiday 2014 and into Q1 2015. ONLINE MARKETSHARE - TOTAL VISITS YOY VARIANCE Site Michael Kors Louis Vuitton Coach Chanel Ralph Lauren July 2014 1,668,477 1,074,048 1,501,562 394,591 2,858,782 July 2015 2,522,649 1,382,677 1,726,789 615,208 3,002,119 YoY Variance 854,172 308,629 225,227 220,617 143,337 2015 Ralph Lauren, another lifestyle brand behemoth, was second, with 18.9% online market share. Hermès Dior 198,249 100,716 335,146 179,516 136,897 78,800 The top 10 luxury brands now account for 81% of total luxury market share, and are the same as reported in 2014. Saint Laurent Paris Armani Burberry 58,095 106,502 370,030 133,058 179,499 439,995 74,963 72,997 69,965 Several of the largest brands continue to show strong growth, and are the driving force behind overall growth of the luxury category. In a positive sign for the sector, growth is occurring across some of the oldest luxury purveyors Hermès, founded 1837 and Louis Vuitton, 1854 as well as newer labels like Michael Kors (founded 1981). ONLINE MARKETSHARE - TOTAL VISITS YOY GROWTH Site July 2014 July 2015 YoY % Growth Balmain Paris 9,553 40,783 327% Moncler 4,986 19,844 298% Dunhill 3,368 11,050 228% Alexander Wang 16,527 50,010 203% For nearly all of the largest luxury brands, predominantly mobile traffic has become the norm. Mulberry Valentino Proenza Schouler 9,571 26,648 7,833 28,301 72,008 20,864 196% 170% 166% Within this elite group of large brands, those with the most intensely mobile traffic are Louboutin, Gucci, Michael Kors, Jimmy Choo, Hermès and Louis Vuitton. These latter two, among the oldest luxury goods makers with origins in the 1800s, prove that no matter what the future may hold, heritage and tradition need not stand in the way of effectively mastering new technology. Hervé Léger Vince Helmut Lang 6,460 30,195 8,448 16,690 74,542 20,633 Balmain Paris saw the most significant increase in monthly visits in 2015. Other brands increasing their monthly visits by over 200% include Moncler, Dunhill and Alexander Wang. All have actively looked to grow their brand presence through some combination of new creative directors, celebrity endorsements, fragrance launches and partnerships with fast-fashion chains like H&M. This increased interest in Balmain is no doubt attributable in part to young creative director Olivier Rousteing and a host of celebrity devotees, including Rihanna, Nicki Minaj and Kim Kardashian. The brand s digital evolution also includes heavy social media. 158% 147% 144% Moncler has focused heavily on social platforms like Facebook and Twitter to achieve overall growth. The brand spotlights an impressive history of celebrity advocates, ranging from Penelope Cruz to Bruce Springsteen. Dunhill s growth is evidence of increased interest in luxury menswear under the guidance of new creative director John Ray. Data source: Experian Marketing Services *July 2014 vs July 2015 11

ONLINE DEMOGRAPHICS MALE VISITORS TO LUXURY BRAND SITES TRENDING UPWARDS Luxury site visits are almost evenly split by gender, unlike the typical apparel site, which skews more female. Visits from men to luxury brands increased 3.8% in the last three years and are growing faster than visits from females. 12

2015 Gender LUXURY BRANDS Visits Share Representation APPAREL & ACCESSORIES Visits Share Representation Female 51.6% 101 55.7% 109 Male 48.4% 99 44.3% 91 Age LUXURY BRANDS Visits Share Representation APPAREL & ACCESSORIES Visits Share Representation 18-24 7.1% 47 6.9% 46 25-34 12.5% 61 11.3% 55 35-44 17.4% 90 21.0% 108 45-54 25.2% 123 27.2% 133 55+ 37.9% 154 33.6% 137 Household Income LUXURY BRANDS Visits Share Representation APPAREL & ACCESSORIES Visits Share Representation < $30,000 22.6% 75 19.1% 63 $30,000 - $59,999 24.2% 92 28.1% 106 $60,000 - $99,999 24.0% 111 27.0% 125 $100,000 - $149,999 20.3% 163 16.5% 132 > $150,000 8.9% 94 9.3% 99 Visitors to luxury brand sites predictably skew towards higher-income households, and a solid majority are age 45+. Boomers are the largest cohort, followed by leading-edge Gen X. Luxury brands attract a slightly larger share of 18-34 year-olds than the average apparel site good news for the future as this group s purchasing power grows. Luxury Brands is a custom category defined by PMX Agency. Representation is an index vs. the internet population. Data source: Experian Marketing Services, 12 Rolling Weeks Ending 7/11/2015 13

CLICKSTREAM SOURCES OF TRAFFIC

KEY SOURCES OF TRAFFIC SEARCH ENGINES ACCOUNT FOR MORE THAN HALF OF ALL REFERRED VISITS TO LUXURY BRAND SITES, MORE THAN ANY OTHER SINGLE SOURCE OF TRAFFIC Search Engines 51.93% Organic 56% Paid 44% Shopping Sites 20.33% Apparel & Accessories 10.39% Luxury Brands 7.25% Department Stores 4.10% Social Networking & Forums 5.63% Email Services 3.63% Other Department stores drive more traffic than email, and nearly as much as social sites. One of five visitors to a luxury brand site comes from an array of other shopping sites ranging from large retailers and department stores to other luxury brands and even deal sites indicating a variety of factors that consumers consider on their path to visiting a luxury brand. 16 ^Shopping Sites corresponds to Experian Marketing Services Shopping & Classifieds category. *Luxury Brands is a custom category defined by PMX Agency, which corresponds to the brands in this study. Data source: Experian Marketing Services

2015 Search Engines Google accounts for nearly all search traffic to luxury brand sites (more than 9 of 10 search referrals). Its dominance over Yahoo! and Bing is much greater within luxury than other retail or fashion categories. Site Google Yahoo! Bing AOL Search Ask Jun 2015 Clicks 47.39% 1.68% 1.48% 0.10% 0.06% Luxury Brands After Google and Facebook, the top referring site to luxury brands is another luxury brand, the quintessential heritage house of Louis Vuitton. Site Jun 2015 Clicks Louis Vuitton 2.29% Michael Kors Chanel Hermès Burberry Versace 0.69% 0.62% 0.61% 0.58% 0.45% Social Media Facebook and YouTube continue to dominate the social media landscape for luxury web traffic.reddit is driving more traffic to luxury brands than in prior years. Site Facebook YouTube Reddit Twitter Pinterest Instagram The Purse Forum Linkedin Tumblr Jun 2015 Clicks 3.16% 0.97% 0.19% 0.17% 0.16% 0.12% 0.09% 0.09% 0.08% Louboutin Gucci Coach Jimmy Choo Shoes Tod s Longchamp Paris Ermenegildo Zegna Prada Jimmy Choo Versace Givenchy Giorgio Armani Miu Miu Ralph Lauren 0.34% 0.27% 0.17% 0.11% 0.11% 0.10% 0.10% 0.08% 0.07% 0.07% 0.06% 0.06% 0.06% 0.06% Yelp Google+ Email Services Gmail and Yahoo! Mail were the top email sites. While email campaigns drive much of this volume, both sites are also popular outlets for targeted display advertising. Site Gmail Yahoo! Mail Windows Live Mail Aol Mail 0.07% 0.04% Jun 2015 Clicks 1.62% 1.01% 0.64% 0.27% Shopping Sites Amazon and ebay account for more traffic to luxury brand sites than the more likely suspects of Nordstrom, Saks, Neiman Marcus and Bloomingdale s. Fragrance, licensed merchandise and watches drive this dynamic more than apparel, though ebay also speaks to the popularity of vintage luxury, clothing included. Lastly, both sites offer display ad space, raising the possibility of remarketing traffic. Site Amazon.com ebay Macy*s BradsDeals Nordstrom Jun 2015 Clicks 1.34% 0.94% 0.89% 0.61% 0.53% RetailMeNot.com Saks Fifth Avenue dealnews Neiman Marcus Online ShopStyle Bloomingdale s 0.37% 0.23% 0.24% 0.21% 0.21% 0.17% Data source: Experian Marketing Services ^Other Shopping Sites corresponds to Experian Marketing Services Shopping & Classifieds category. *Luxury Brands is a custom category defined by PMX Agency, which corresponds to the brands in this study. 17

SEARCH

VISITS FROM SEARCH TO LUXURY BRAND SITES Site % of Visits from Search Engines % Paid Site % of Visits from Search Engines % Paid Apparel and Accessories^ Luxury Brands* Lancel Loro Piana Maison Margiela Emilio Pucci Trussardi Jason Wu Manolo Blahnik Moncler Jean Paul Gaultier Brioni Dolce & Gabbana Brunello Cucinelli Giuseppe Zanotti Balenciaga Marc Jacobs Donna Karan Bally Tom Ford Céline Bottega Veneta Hervé Léger Prada Marni Saint Laurent Paris Armani Balmain Paris Fendi Moschino Dunhill Dior Nicholas Kirkwood Turnbull and Asser Roberto Cavalli 40.1% 51.9% 84.1% 79.4% 78.8% 74.8% 74.0% 73.1% 71.0% 68.3% 68.1% 67.9% 67.9% 67.7% 67.6% 67.5% 66.7% 66.6% 66.3% 66.2% 64.2% 64.1% 63.1% 63.1% 62.8% 62.5% 62.0% 61.8% 61.8% 61.7% 61.7% 60.7% 60.5% 60.1% 60.1% 41% 44% 0% 49% 1% 48% 29% 20% 0% 46% 0% 40% 22% 51% 6% 52% 33% 31% 50% 33% 0% 67% 52% 46% 72% 54% 47% 2% 32% 47% 41% 52% 0% 11% 46% Marchesa Valentino Gucci Givenchy Stella McCartney Furla Alexander McQueen Chanel Berluti Lanvin Paris Ferragamo Chloé Louboutin Michael Kors Longchamp Paris Versace 3.1 Phillip Lim Jil Sander Hermès Shanghai Tang Louis Vuitton Oscar de la Renta Nanette Lepore Alexander Wang Burberry Miu Miu Escada Loewe Thomas Pink Coach Ralph Lauren Helmut Lang Proenza Schouler Sergio Rossi Ermenegildo Zegna 60.0% 59.6% 59.2% 59.2% 59.0% 57.9% 57.3% 56.5% 56.0% 54.9% 54.2% 54.2% 54.0% 53.7% 52.8% 52.8% 52.8% 51.7% 51.7% 51.6% 51.6% 51.5% 50.7% 50.6% 50.0% 49.0% 48.0% 47.7% 46.6% 45.7% 45.7% 45.5% 44.5% 43.2% 43.1% 0% 32% 48% 8% 51% 60% 29% 51% 0% 39% 36% 10% 1% 41% 25% 32% 28% 56% 41% 55% 51% 23% 0% 41% 44% 32% 51% 32% 42% 46% 51% 69% 52% 32% 34% Luxury brands are more reliant on visits from search than the average apparel and accessories site. 78% of luxury brands in this study (58 total), relied on search for more than half of their referred site traffic. Luxury brands paid for 44% of their search traffic, slightly more than the typical apparel site. 20 ^Apparel and Accessories is a category defined by Experian Marketing Services. *Luxury Brands is a custom category defined by PMX Agency. Data source: Experian Marketing Services, June 2015

2015 Top Brand Terms For Luxury Brand Sites Search Terms michael kors louis vuitton coach ralph lauren gucci burberry chanel prada versace hermes christian louboutin marc jacobs armani tom ford dior dolce and gabbana ferragamo louboutin balenciaga jimmy choo Search Clicks 7.0% 4.6% 3.4% 3.4% 2.5% 1.6% 1.2% 0.8% 0.7% 0.7% 0.5% 0.5% 0.4% 0.4% 0.4% 0.3% 0.3% 0.3% 0.3% 0.3% % Paid Search Terms Search Clicks % Paid 43% 58% 45% 58% 41% 46% 49% 52% 34% 35% 2% 38% 60% 41% 57% 20% 34% 0% 60% 42% michael kors watches michael kors handbags coach purses coach bags gucci belt chanel bags coach handbags hermes belt michael kors bags gucci sunglasses chanel handbags michael kors purses louis vuitton bags gucci handbags coach shoes michael kors shoes celine bag gucci shoes louis vuitton wallet ferragamo bel 0.3% 0.3% 0.3% 0.2% 0.2% 0.2% 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 59% 60% 58% 67% 62% 52% 54% 47% 66% 72% 39% 49% 57% 68% 64% 73% 0% 80% 51% 10% michael kors generates the most clicks among brand terms. It drives 7% of all search clicks to the category. Paid volume is notably high for brand terms, which reinforces the central role of paid search in attracting online consumers. Top Keywords & Products For Luxury Brand Sites Individual Keywords outlet shoes bag bags men handbags sunglasses mens wallet sale Search Clicks 3.10% 2.50% 2.31% 1.88% 1.87% 1.73% 1.57% 1.45% 1.38% 1.35% % Paid Search Terms Search Clicks % Paid 41% 46% 38% 53% 41% 52% 48% 42% 45% 57% belt leather watches purses shirts women black purse watch shirt 1.20% 1.18% 1.07% 1.05% 0.99% 0.98% 0.86% 0.86% 0.83% 0.81% 42% 48% 49% 52% 48% 46% 47% 40% 39% 43% Combined click volume from handbags, bags, purses and similar keywords continues to show that this accessory is the most popular product for attracting consumers to luxury brand sites. Shoes, sunglasses, wallets and belts are also among the most popular accessories with luxury site visitors. Shirts drive the most search traffic to luxury brands among apparel keywords. Outlet terms, indicative of aspirational consumers who visit luxury sites, are more than twice as popular as sale terms, which may appeal to both the occasional and more frequent, core luxury buyer. Luxury Brands is a custom category defined by PMX Agency. Data source: Experian Marketing Services, 12 Rolling Weeks Ending 6/27/2015; Top keywords are based on inclusion in both brand and nonbrand searches. 21

SOCIAL MEDIA

VISITS FROM SOCIAL MEDIA TO LUXURY BRAND SITES Site Apparel & Accessories^ % Visits from Social Site % Visits from Social 9.6% Brunello Cucinelli 4.7% Luxury Brands* 5.6% Furla 4.6% Shanghai Tang 18.9% Valentino 4.6% Chloé 12.3% Gucci 4.5% Loro Piana 11.0% Vince 4.5% Proenza Schouler 10.8% Alexander McQueen 4.5% Loewe 10.1% Louboutin 4.5% Helmut Lang 8.5% Tom Ford 4.5% Berluti 7.8% Balenciaga 4.4% Thomas Pink 7.4% Moncler 4.3% Balmain Paris 7.2% Maison Margiela 4.3% 3.1 Phillip Lim 7.1% Fendi 4.3% Saint Laurent Paris 6.8% Ferragamo 4.2% Alexander Wang 6.7% Burberry 4.0% Coach 6.6% Chanel 4.0% Michael Kors 6.4% Dior 4.0% Céline 6.2% Diane von Furstenberg 3.9% Mulberry 6.1% Armani 3.9% Moschino 5.9% Louis Vuitton 3.5% Jil Sander 5.8% Dolce & Gabbana 3.5% Jimmy Choo 5.7% Turnbull and Asser 3.5% Ralph Lauren 5.5% Lanvin Paris 3.5% Sergio Rossi 5.5% Dunhill 3.4% Donna Karan 5.5% Giuseppe Zanotti 3.3% Nanette Lepore 5.4% Bally 3.2% Marchesa 5.1% Prada 3.1% Stella McCartney 4.9% Marc Jacobs 3.0% Ermenegildo Zegna 4.8% Versace 3.0% Social media drives an average of 5.6% of visits to luxury brand sites, lower than the broader apparel and accessories category. 24 ^Apparel and Accessories is a category defined by Experian Marketing Services. *Luxury Brands is a custom category defined by PMX Agency. Data source: Experian Marketing Services, June 2015 (Note that this reflects social web traffic from all devices, including phones and tablets, but does not factor in mobile apps.)

2015 Social Media Sites Other Traffic 18.9 % 12.3 % visits from social media visits from social media 11.0 % visits from social media 10.1 % visits from social media Shanghai Tang, Chloé, Loro Piana and Loewe all gained percentage points in social media visits YoY and now see 10%+ visits from social, outpacing the average for all luxury brands as well as the apparel and accessories category. 25

FACEBOOK LIKE COUNTS Facebook Page Aug 2015 Likes Facebook Page Aug 2015 Likes Louis Vuitton 17,838,683 Longchamp Paris 1,281,734 Burberry 16,790,860 Tom Ford 1,068,068 Michael Kors 16,372,749 Miu Miu 1,036,061 Gucci 14,734,506 Balenciaga 993,370 Chanel 14,613,778 Oscar De La Renta 986,171 Dior 14,411,068 Tod s 981,545 Dolce & Gabbana 9,770,326 Diane von Furstenberg 908,258 Ralph Lauren 8,032,701 Jean Paul Gaultier 822,938 Armani 7,364,477 Alexander Wang 765,709 Coach 5,881,326 Stella McCartney 738,114 Prada 5,294,452 Escada 686,438 Versace 3,930,314 Lanvin Paris 599,532 Louboutin 2,932,488 Moschino 581,692 Jimmy Choo 2,892,860 Dunhill 556,054 Moncler 2,458,799 Loewe 550,844 Saint Laurent Paris 2,322,221 Donna Karan 496,452 Fendi 2,277,134 Furla 495,466 Hermès 2,269,095 Bottega Veneta 490,197 Givenchy 2,127,385 Marchesa 427,910 Roberto Cavalli 2,097,664 Bally 402,407 Valentino 2,072,490 Ermenegildo Zegna 382,156 Alexander McQueen 1,739,614 Proenza Schouler 366,092 Marc Jacobs 1,645,024 Mulberry 362,470 Chloé 1,628,139 Emilio Pucci 343,265 Ferragamo 1,355,856 Balmain Paris 335,865 Louis Vuitton, Burberry and Michael Kors maintain their dominance in Facebook like counts, each with 16 million+. With 14 million+ likes, the next tier is made up of Gucci, Chanel and Dior. 26 Data source: RivalIQ, PMX Agency Research & Analysis

2015 Facebook leaders engage with consumers by offering insider scoop like behind-the-scenes at events, new product introductions and videos of fashion shows. FACEBOOK LIKE COUNTS YOY GROWTH Facebook Page Aug 2014 Aug 2015 Likes YoY Growth Moncler Chanel Michael Kors Versace Prada Gucci Armani Valentino Dior Givenchy 544,560 12,897,410 14,770,893 2,810,544 4,303,081 13,913,574 6,873,999 1,605,305 14,007,284 1,756,002 2,458,799 14,613,778 16,372,749 3,930,314 5,294,452 14,734,506 7,364,477 2,072,490 14,411,068 2,127,385 1,914,239 1,716,368 1,601,856 1,119,770 991,371 820,932 490,478 467,185 403,784 371,383 For the second year in a row, Moncler has seen enormous growth in Facebook likes (adding 1.9 million likes, up 352%). Celebrity is used to promote the brand on Facebook, ranging from posts highlighting campaigns photographed by Annie Leibovitz to stars shown at various fashion shows. (The Friends of Moncler photo album on Facebook is rich with famous faces as well.) Chanel gained 1.7 million likes through a steady stream of glamourous photos, music and fashion show videos. While not charted here, Italian brand Brunello Cucinelli gained 582% to reach 41,030 likes in part due to increased exposure from a new partnership with MR Porter. Data source: PMX Agency Research & Analysis Data source: RivalIQ, PMX Agency Research & Analysis 27

TWITTER FOLLOWER COUNTS Twitter Handle Aug 2015 Followers Twitter Handle Aug 2015 Followers @Chanel 8,604,802 @AlexanderWangNY 489,320 @Dior 6,029,430 @ProenzaSchouler 468,883 @LouisVuitton_US 4,558,820 @Balenciaga 382,514 @Burberry 4,350,738 @ChloéFashion 344,631 @DolceGabbana 3,316,916 @OscarPRGirl 327,226 @MarcJacobsIntl 3,281,527 @Ferragamo 324,078 @MichaelKors 3,025,552 @Mulberry_Editor 323,026 @YSL 2,856,903 @MarchesaFashion 319,126 @Armani 2,294,923 @LanvinOfficial 316,684 @Versace 2,267,001 @Moschino 260,671 @Gucci 2,035,262 @Fendi 248,863 @LouboutinWorld 1,645,293 @Belmain 174,903 @MaisonValentino 1,346,960 @JasonWu 173,517 @RalphLauren 1,302,291 @EmilioPucci 145,018 @Roberto_Cavalli 1,290,801 @ManoloBlahnik 126,271 @WorldMcQueen 1,099,714 @Zegna 111,615 @Moncler 1,021,186 @Margiela 104,900 @JimmyChooLtd 955,661 @MiuMiuOfficial 91,450 @JPGaultier 918,714 @GZanottiDesign 84,195 @StellaMcCartney 905,045 @HelmutLang 80,523 @DVF 876,479 @LoeweOfficial 76,329 @Coach 641,337 @Furla 75,252 @Givenchy 589,262 @31PhillipLim 53,232 @DKNY 537,941 @TomFordIntl 41,735 @Prada 532,225 @NanetteLepore 32,738 Chanel and Dior both continue to lead the Twitter follower count, with 8.6 million+ and 6 million+ followers respectively. With 4 million+ followers, Louis Vuitton and Burberry are next in line. Louis Vuitton grew its follower pool substantially in the past year, passing both Burberry and Dolce & Gabbana to rank in the top 5. 28 Data source: RivalIQ, PMX Agency Research & Analysis 1Luxury Daily

2015 Now both topping 1 million followers a piece, Louboutin and Moncler have also seen dramatic growth on Twitter. Top posts included Louboutin promoting its nude shoes and Moncler highlighting a brightly-colored Lambert jacket. TWITTER FOLLOWER COUNTS YOY GROWTH Twitter Handle Aug 2014 Aug 2015 Followers YoY Growth @Chanel @LouisVuitton_US @MarcJacobsIntl @LouboutinWorld @Burberry @Dior @Moncler @MichaelKors @Gucci @DolceGabbana @YSL @Armani @Versace @RalphLauren @MaisonValentino @Prada @JPGaultier @Roberto_Cavalli @JimmyChooLtd @WorldMcQueen 5,143,932 1,184,711 1,668,856 161,147 3,056,091 5,001,940 42,197 2,129,251 1,144,347 2,514,287 2,131,645 1,676,744 1,665,539 831,393 884,113 130,580 551,172 975,639 708,390 854,352 8,604,802 4,558,820 3,281,527 1,645,293 4,350,738 6,029,430 1,021,186 3,025,552 2,035,262 3,316,916 2,856,903 2,294,923 2,267,001 1,302,291 1,346,960 532,225 918,714 1,290,801 955,661 1,099,714 3,460,870 3,374,109 1,612,671 1,484,146 1,294,647 1,027,490 978,989 896,301 890,915 802,629 725,258 618,179 601,462 470,898 462,847 401,645 367,542 315,162 247,271 245,362 Chanel and Louis Vuitton each gained 3 million+ Twitter followers in the past year. Top content from both focused on behind-the-scenes looks at collections and fashion shows. Other brands with significant Twitter follower growth include Marc Jacobs and Burberry. Data source: Wildfire Social Media Monitor, PMX Agency Research & Analysis 1) Luxury Daily 29

YOUTUBE SUBSCRIBER & VIEW COUNTS YouTube Channel Aug 2015 Subscribers Views YouTube Channel Aug 2015 Subscribers Views Chanel 437,216 176,715,998 Roberto Cavalli 8,149 1,428,754 Dior 208,835 103,954,961 Maison Margiela 7,076 871,796 Burberry 178,322 66,223,992 Jean Paul Gaultier 6,689 3,957,925 Louis Vuitton 105,381 54,849,406 Jimmy Choo 5,923 12,726,139 Dolce & Gabbana 104,225 50,646,604 Dunhill 5,828 3,701,877 Coach 48,135 6,993,245 Longchamp Paris 5,209 7,210,154 Prada 47,667 25,418,766 Bottega Veneta 5,058 5,928,162 Gucci 38,661 23,438,553 Balenciaga 4,511 454,210 Armani 34,213 17,215,617 Diane von Furstenberg 3,877 2,819,213 Hermès 27,940 4,161,528 Stella McCartney 3,252 449,193 Versace 27,259 8,873,919 Moncler 3,076 1,300,634 Ralph Lauren 22,908 16,218,444 Oscar de la Renta 2,496 347,611 Saint Laurent Paris 21,098 938,672 Tod s 2,422 3,805,755 Michael Kors 17,282 5,767,920 Schiaparelli 1,792 180,703 Miu Miu 15,270 6,751,307 Giuseppe Zanotti 1,750 216,651 Moschino 15,063 2,205,624 Louboutin 1,682 69,032 Valentino 14,724 7,106,456 Escada 1,542 327,476 Marc Jacobs 13,270 3,968,450 Bally 1,273 1,811,455 Alexander Wang 12,912 2,466,601 3.1 Phillip Lim 1,246 129,335 Fendi 12,776 24,142,798 Thomas Pink 1,150 446,932 Lanvin Paris 10,819 2,112,925 Donna Karan 1,142 126,558 Ermenegildo Zegna 10,174 8,930,993 Marni 1,105 90,587 Chloé 9,681 8,988,167 Berluti 1,064 272,254 Tom Ford 9,448 1,116,157 Furla 873 298,197 Ferragamo 9,257 2,768,119 Trussardi 816 1,304,710 Chanel remains the leader in attracting subscribers to its YouTube channel. The brand also remained the frontrunner in the greatest number of views (176 million+). 30 Data source: PMX Agency Research & Analysis

2015 Luxury brand videos getting substantial YouTube views include Chanel s Reincarnation featuring Pharrell Williams and Dior s Secret Garden featuring Rihanna, Gucci s Men s Tailoring, and an animated look at Jimmy Choo s collaboration with artist Rafael Mantesso. YOUTUBE VIEW COUNTS YOY GROWTH YouTube Channel Aug 2014 Aug 2015 Views YOY Growth YouTube Channel Aug 2014 Aug 2015 Views YoY Growth Chanel 107,463,029 176,715,998 69,252,969 Jimmy Choo 1,654,200 12,726,139 11,071,939 Dior 69,204,758 103,954,961 34,750,203 Ralph Lauren 9,088,446 16,218,444 7,129,998 Burberry 34,355,516 66,223,992 31,868,476 Prada 18,977,176 25,418,766 6,441,590 Gucci 8,137,312 23,438,553 15,301,241 Versace 2,989,363 8,873,919 5,884,556 Dolce & Gabbana 38,450,804 50,646,604 12,195,800 Fendi 18,276,555 24,142,798 5,866,243 31

INSTAGRAM FOLLOWERS & POST COUNTS Instagram Profile Aug 2015 Followers Posts Instagram Profile Aug 2015 Followers Posts Louis Vuitton 6,326,810 961 Balenciaga 1,105,184 434 Chanel 5,868,432 176 Tom Ford 1,084,774 301 Dior 5,276,683 867 Miu Miu 990,216 503 Dolce & Gabbana 5,257,546 1,876 Alexander Wang 976,800 462 Michael Kors 5,164,878 1,656 Chloé 965,181 510 Louboutin 4,996,775 2,089 Diane von Furstenberg 898,577 1,944 Gucci 4,996,434 848 Manolo Blahnik 837,398 1,439 Prada 4,465,735 857 Coach 812,194 1,654 Valentino 4,256,425 2,350 Ferragamo 777,781 1,291 Burberry 4,128,198 1,763 Marchesa 606,081 1,359 Versace 2,961,745 1,306 Oscar De La Renta 534,739 1,256 Givenchy 2,932,375 931 Maison Margiela 516,784 477 Marc Jacobs 2,786,456 1,693 Emilio Pucci 502,393 559 Fendi 2,584,103 1,726 3.1 Phillip Lim 490,662 673 Armani 2,541,529 2,691 Mulberry 352,341 587 Jimmy Choo 2,093,423 1,160 Proenza Schouler 333,397 492 Ralph Lauren 2,013,616 2,311 Bottega Veneta 308,865 411 Balmain Paris 2,001,813 1,703 Tod s 275,689 794 Roberto Cavalli 1,746,951 4,427 Jason Wu 271,257 941 Moschino 1,724,862 1,611 Jean Paul Gaultier 269,703 470 Stella McCartney 1,571,874 1,120 Moncler 219,139 924 Alexander McQueen 1,458,457 742 Hervé Léger 180,181 429 Lanvin Paris 1,438,981 1,414 Longchamp Paris 166,425 574 Giuseppe Zanotti 1,405,060 909 Helmut Lang 159,612 744 Hermès 1,140,870 638 Loewe 143,972 891 Louis Vuitton, Chanel, Dior, Dolce & Gabbana and Michael Kors have the most Instagram followers with 5 million+. Roberto Cavalli continues to lead all luxury brands in Instagram posts (4,427). Armani is the second highest brand with 2,691. Chanel, which had not posted anything on Instagram at the time of last year s study, is now actively using the platform. 32 Data source: RivalIQ, PMX Agency Research & Analysis

2015 Top posts were star-studded, including Beyoncé and Pharrell Williams at Chanel s New York fashion show, Givenchy posts featuring Kim Kardashian, Kanye West, Beyoncé and Jay Z, Taylor Swift in Michael Kors at the AMA s, and Burberry promoting a new film that starred Romeo Beckham. INSTAGRAM FOLLOWER COUNTS YOY GROWTH Instagram Profile Aug 2014 Aug 2015 Followers YoY Growth Chanel 1,638,189 5,868,432 4,230,243 Dior 1,057,525 5,276,683 4,219,158 Adding 4 million+ Instagram followers each, Chanel, Dior and Louis Vuitton gained the most followers YoY. Louis Vuitton 2,311,931 6,326,810 4,014,879 Dolce & Gabbana 1,568,421 5,257,546 3,689,125 Prada 1,252,378 4,465,735 3,213,357 Gucci 1,884,623 4,996,434 3,111,811 Valentino 1,183,225 4,256,425 3,073,200 Michael Kors 2,557,859 5,164,878 2,607,019 Burberry 1,650,449 4,128,198 2,477,749 Givenchy 701,064 2,932,375 2,231,311 Data source: PMX Agency Research & Analysis Data source: RivalIQ, PMX Agency Research & Analysis 33

DEPARTMENT STORES & OTHER SITES

DOWNSTREAM TRAFFIC FROM LUXURY BRANDS 2/5 of downstream traffic from luxury brands goes either to another luxury brand, department store, or some type of shopping site. Shopping Sites 39.4% Search Engines 19.9% 1/5 of exiting traffic ends up on a search engine. Some visitors departing a luxury brand site will continue to research and shop elsewhere, perhaps seeking more attractive pricing or shipping terms. Other Luxury Brands 14.1% Department Stores 8.6% Macy s 1.9% Nordstrom 1.2% Saks Fifth Avenue 0.5% Neiman Marcus 0.5% Bloomingdale s 0.4% Off-Price/Private Sale 0.8% Nordstrom Rack 0.1% DSW 0.1% Saks OFF 5th 0.1% theoutnet 0.1% Neiman Marcus lastcall 0.1% Online Stores 4.0% Amazon 1.8% ebay 1.6% Farfetch 0.1% Net-a-Porter 0.1% Shopbop 0.1% Ssense 0.04% Yoox 0.02% Pre-Owned / Consignment 0.5% Tradesy 0.2% The Real Real 0.1% Fashionphile 0.1% Yoogi s Closet 0.1% Luxury brands store partners are also their top competitors in paid search, along with pre-owned sites. Their co-existence on the SERP brings considerations like price, shipping costs, and even consignment to the forefront for shoppers. Louboutin gets top ranking in natural search results, but is surrounded by ads from other stores, with no paid search ads of its own. Saks Fifth Avenue and Nordstrom in top paid spots Barneys, Saks, Bergdorf Goodman and Tradesy in Google Shopping Ads 36 Data source: Google results cached by SpyFu 4/21/2015 Data source: Experian Marketing Services, 12 weeks ending 6/27/2015

2015 SHARE OF BRAND TERM CLICKS LUXURY BRANDS VS. OTHER STORES Brand Names Luxury brands command a huge share of clicks (64.9%) on the most high-value terms: their own names. Department stores offer the primary competition with 5.4% of clicks. Luxury Brands Department Stores Online Stores Shopping Portals Off-Price & Private Sale Pre-Owned Other Shopping Other non-shopping 64.9% 5.4% 2.2% 0.5% 0.4% 0.1% 3.0% 23.4% Brand Name + Handbag However, add a product word like handbags (or similar for men) to that brand name, and department store share swells to 16.1%, while luxury brand share shrinks to a quarter. Stores selling pre-owned or off-price merchandise also capture significant share of these brand+ clicks. Luxury Brands Department Stores Online Stores Shopping Portals Off-Price & Private Sale Pre-Owned Other Shopping Other non-shopping 24.3% 16.1% 11.0% 3.2% 1.8% 6.0% 8.2% 29.4% Other Non-Shopping includes sites such as Wikipedia, Facebook, YouTube, Google Maps and Purse Forum. Data source: Experian Marketing Services, June 2015 37

CONTACT

2015 PMX Agency is a full-service integrated marketing agency with comprehensive experience in multiple media channels, including search, social, display, email, direct mail, print and insert media, as well as strategic and creative web development capabilities. With a client list that s a Who s Who in retail and commercial organizations, PMX Agency has continued to grow their reputation as some of the industry s most critical thinkers and leaders. For more information please visit www.pmxagency.com. PMX AGENCY RESEARCH The Research group leverages proprietary data and external subscription services to provide categorical and competitive studies for online marketers. PMX Agency research provides all interpretation of data obtained from third party sources. CONTACT PMX Agency 5 Hanover Square New York, NY 10004 toll free: 888.960.0177 main: 212.387.0300 info@pmxagency.com www.pmxagency.com Experian Marketing Services is a global provider of integrated consumer insights and targeting, data quality and cross-channel marketing. We help organizations around the world intelligently interact with today s dynamic, empowered and hyperconnected customers. By coordinating seamless interactions across all marketing channels, marketers are able to plan and execute superior brand experiences that deepen customer loyalty, strengthen brand advocacy and maximize profits. CONTACT Experian Marketing Services 29 Broadway, 10th Floor New York, NY 10006 main: 212.380.2900 http://www.experian.com/marketingservices/consumer-insights.html 39

PMX AGENCY S TREND REPORT: LUXURY BRANDS ONLINE 212.387.0300 INFO@PMXAGENCY.COM PMXAGENCY.COM pmxagency 2016