The influx of millennial purchasers has left luxury brands with no choice but to rethink their digital marketing strategies. Traditionally, luxury brands have lagged behind the curve, but are now working especially hard to create personalised and flexible modes of digital engagement.
Our report Digital frontier 2016: digital luxury is turning mainstream, revealed that digitally contactable customers are high spenders in-store and account for 27% of in-store revenue and 73% of e-commerce revenue. These figures highlight the need for brands to connect e-commerce with brick and mortar stores in order to develop a seamless omnichannel experience.
Luxury brands have to work particularly hard to communicate their personalisation and exclusivity which they trade on in their digital marketing. However, the brands that do so, provide innovation that all digital marketers can benefit from. Certain luxury brands have surpassed simply excelling in e-commerce, and have recognised the importance of adopting digital practices beyond marketing and selling their products online. Contactlab has conducted numerous pieces of research into luxury brands’ marketing strategies showing that Ralph Lauren, Burberry, and Bergdorf Goodman are currently harnessing the power of digital in the most bespoke and effective way.
Consumers are ready for omnichannel interactions with luxury brands, with 80% of shoppers actively expecting this. Luxury brands must be prepared to meet their customer at all touch points of their shopping journey, or else risk losing customer retention and brand loyalty. Both Ralph Lauren and Burberry have embraced the omnichannel experience, championing digital and physical integration in incredibly innovative ways. In its New York flagship store, Ralph Lauren has implemented interactive mirrors in the changing rooms, thus connecting the online and offline worlds. The smart mirrors eliminate friction from the customer experience and aids the retailer in making more intelligent merchandising decisions.
British heritage house, Burberry, has partnered with Snapchat, Instagram, and Google, which has equated to an exciting and efficient shopping experience both online and offline. Being able to tell a good story is the key to driving customer engagement, and utilising an app such as Snapchat to do so, is uniquely suited to today’s busy, mobile-centric, consumers. In addition to this, the brand has 42 million followers, highlighting that it is the key innovator of social media marketing. Burberry has realised that a complete embrace of digital requires a companywide transformation, including all employees and business areas – a notion that all digital marketers should take on board and put into practice.
However, there are fourteen luxury brands who have not adopted any digital tools or exploited the potential channels given by digital proficiency, highlighting their ongoing digital struggle. Chanel is one brand in particular that has traditionally struggled to assimilate to the digital landscape and also to the needs of its customers.
Yet, even though Chanel has typically lagged behind, it has recently experimented with a pop-up store in Seoul, South Korea. During a two-week period, visitors were invited to experience the playful aspect of the brand through a mobile game. Both the store’s design and the game reinforced the brand’s recent positioning as a fun, but prestige beauty brand for young women. Chanel’s digital stepping-stone is a small step in the right direction and thus highlights that all traditional luxury brands have the potential to harness the power of digital.
Customers are more demanding than ever in regards to luxury brands, as they expect a bespoke and seamless shopping experience. With this in mind, luxury brands must avoid targeting shoppers without a digitalised personalised strategy, or else they will lose their unique sense of appeal and in turn, lose revenue and customer retention. In order for luxury brands to prosper, they must continue to implement integrated marketing strategies where digital is embraced both fully and strategically.
By Massimo Fubini, CEO of Contactlab
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