Georgia Fendley tracks the success of the luxury brands that are bold enough to go against the grain when it comes to digital marketing.
Chances are you have just started to action your 2019-2020 marketing and communications strategy. From our research, it seems that more of you than ever are concerned that your plans may not deliver the return on investment you need to achieve. The last few years have been characterised by a seismic shift in focus from traditional media and marketing strategies to a brave new world: more transparent, more challenging and faster moving than ever before.
Many marketers have over-invested in celebrity-influencer engagement, a zero-sum game for brands whose consumers see these individuals as commercial mercenaries with fake followers, a million miles from an authentic brand advocate. They have also, in all probability, over-invested in mega-platforms, delivering a diminishing return. In the Luxury Institute’s 2018 Emotionally Intelligent Brand Survey, Facebook was rated lowest for emotional intelligence and one in five affluent consumers reported actively discouraging their networks from using the social media platform.
The arrogance of a traditional approach to luxury brand communications is ill-suited to this bold climate. Alpha growth is still possible if you understand the new rules.
First is an honest appraisal of your business: in the new order, there is nowhere to hide – if you have a problem, you need to fix it and fast. This means agile organisations with engaged boards and no fear of change will outperform their peers.
Next comes analysing fresh opportunities: category, customer and geography must be identified, understood and a vision created that responds clearly to the needs of each.
Last but not least is implementation via data and artificial intelligence-enabled personal marketing to communicate all facets of the brand’s story in a ‘one to one’ dialogue with the consumer.
Customers are looking for individualised brand relationships. They expect to know more, see more and share more than ever before. Brands need to wake up to the concept of shopping as a social interaction first and foremost, with the commercial transaction acting as a byproduct of this social engagement.
Ultra-high-net-worth individuals are looking for the exceptional, the out of the ordinary, tech and science enabled products, services and experiences not previously or generally available. The rest of us are motivated by cultural credibility and sustainability, with technology delivering new materials and processes for zero-guilt luxury, the ultimate in desirability for most Gen-Zs, Millennials, X’s and
even Boomers, too.
According to The Global Powers of Luxury Goods Report 2018, millennials and Gen Z-ers will account for more than 40 per cent of the luxury market by 2025, up from 30 per cent at present. Therefore, most brand strategies are lagging behind. Customisation and sustainability are the key drivers for these audiences, and the impact of this shift can be seen most notably in the perfume and cosmetics business.
In 2016, every company in the beauty sector reported growth. This sector has also leveraged its position in the experience economy, by investing in product innovation and artificial reality (AR) and virtual reality. The beauty conglomerate Estée Lauder and cosmetics retailer Sephora invested in AR technology to help customers try on make-up more conveniently and L’Oréal recently acquired ModiFace – a leader in AR and AI applications used in the industry.
Cosmetics has led the movement and other categories are now following suit – last year, LVMH launched a ‘virtual advisor’ chatbot on Facebook Messenger for its US clients, and Yoox partnered with photography app Lumyer to come up with an AR camera function, allowing consumers to try on handbags, sunglasses and jewellery through VR.
The tech and cost barriers to entry are reducing by the day, and there are already genuine opportunities to enhance customer experience using data and digital innovation to build a deeper relationship. The real trick is understanding your brand, its audience and the scope of your creative boundaries. Get this right and a data-driven marketing strategy will do the rest.