Customer Profile
Factor Analysis
This is an example of application of factor analysis to a sample of English, Chinese and Italian
customers to whom a questionnaire, which aimed to establish their preference in the purchase
of luxury goods, had been administered. The data processing was done with the IBM SPSS
software.
The Factor Analysis reduced all the preferences to a small number of factors that determined
most of preference’s variance. The analysis describes some luxury goods customers’ profiles,
based on their shopping preferences that allow a first market segmentation
In the following figure the factors I found are resumed (using Principal Components extraction
method with Equamax rotation method), with the related percentages of variance explained.
Factor 1
Factor 2
Factor 3
Factor 4
Factor 5
ITALIAN
35%
15%
9%
7%
BRITISH
33%
19%
10%
8%
7%
CHINESE
32%
21%
11%
The first Factor Analysis rotated matrix allowed me to describe the Italian luxury goods
customers as:
1. Factor: customers who prefer shopping in store because they want to feel and touch
products that are immediately
2. Factor: customers who prefer shopping in store. They enjoy being attended to by a sales
person, the store’s atmosphere and the possibility to access limited editions that cannot
be found online. These customers don’t think that the store experience can be replaced
by the online.
3. Factor: customers who buy luxury goods products in store and online are likely to
continue purchasing through both channels
4. Factor: customers who prefer shopping online to access a wider selection of products
and to read peers’ reviews. They are likely to buy luxury goods products online in the
future.
The second Factor Analysis rotated matrix led me to describe the British luxury goods
customers as:
1. Factor: customers who bought online and in store in the last six months and are likely
to continue buying through both channels.
2. Factor: customers who prefer shopping online as they have limited time and want to
access a wider selection of products.
3. Factor: customers who buy in store to feel and touch the products that are immediately
available.
4. Factor: customers who don’t think the store experience can be replaced by the online.
They enjoy the store atmosphere and being attended.
5. Factor: women who like browsing online but then prefer purchasing in store as they are
attracted by the possibility to access limited editions.
The third Factor Analysis rotated matrix allowed me to describe the Chinese luxury goods
customers as:
1. Factor: customers who bought luxury goods online in the past six months and, even
though they visit the store they don’t like to be attended to by a sales person and prefer
purchasing online. They are likely to buy online in the future.
2. Factor: customers who buy in store because they like to experience the products, they
enjoy the store atmosphere and appreciate the possibility to access exclusive editions
not available online.
3. Factor: customers who have predominantly bought in store in the past six months and
are very likely to continue shopping in store in the future. They don’t think that the
store experience can be replaced by the online.