Traackr, a leading global influencer marketing platform and analytics company, launches today the first white paper aimed at helping luxury brands address the nine critical considerations that challenge the sector’s traditional marketing models and impede the vast commercial opportunity influencer marketing offers to CMOs.
The white paper, downloadable here, evaluates prior and current marketing trends, how effective and relevant these are for today’s luxury business. Further, it outlines the new era of relationships and purchase behaviour; where convenience is being redefined by technology and is taking luxury customer expectations to another level.
The recent digital luxury experience study by McKinsey and Altagamma Foundation estimates that online luxury sales as a percentage of total should increase from their current level of 6% to 18% in 2025 to reach €70 billion of a projected total sales of €390 billion.
The rate of growth and change in the luxury market continues to be considerable with globalisation, increased competition and the rise of a larger base of wealthy customers marking a paradigm shift that has been in place since the end of the 20th century.
The sector has traditionally relied heavily on costly marketing methods such as print and TV campaigns, the creation of expensive online brand experiences and the investment in vast global distribution networks to achieve personalisation, exclusivity and the holy grail of ‘infinite proximity’. Yet despite so much activity, true engagement and impact remain difficult to achieve.
Relationships have always been central to successful luxury brand marketing. The increase in online sales, digital media -- and social media in particular --, are changing the way customers spend their time, shop, build and maintain relationships. It also alters how they expect to engage with brands.
According to The Myndset , 42% of luxury brands and 28% of premium-positioned brands say that digital has been very disruptive to their governance (compared to 11% of all others). Upscale brands consider digital more important for understanding their clientele, as 67% of luxury and 60% of premium brands consider digital from “important to very important” in understanding their customers.
Where global shoppers see less and less divide between the real and virtual worlds, social media has now been recognised by most brands as a key channel to building awareness, desirability and conversion, particularly through image-based platforms like Pinterest and Instagram (with the associated purchase button).
Traackr believes that of all (digital) marketing practices, influencer marketing has emerged as one of the most promising and viable means of driving consumer purchase behaviour and generating authentic relationships and impact within the Luxury business today.
Citing that trust is largely driven by peers and authoritative content and that only 3% of individuals drive 90% of conversations and impact online, Traackr says it promises a compelling cost-effective route to harnessing latent commercial potential and growth for luxury brands.
According to Econsultancy’s report on the rise of influencers in fashion and beauty 59% of decision makers say influencer marketing budgets will increase this year. Having a strategy with the tools and processes to optimize this investment should be a priority.
While relationships have always been fundamental to luxury marketing, “influencer marketing” is raising a whole new set of challenges and presents unrivalled opportunity for the luxury sector to engage key communities in a meaningful win-win exchange and create purpose.
The nine challenges of influencer marketing for luxury brands
Traackr’s white paper evaluates the following subjects:
• The relative importance of reach, resonance and relevance with reference to generating the right content and accurate brand association.
• How CMOs must look beyond luxury to broader brand associated subjects to increase impact and relevance
• How selecting the right influencers is about identifying affinity and conviction and giving a voice and trust to influencers brands co-create content with
• How luxury brands can scale impact whilst retaining exclusivity
• How the paid for model fails to deliver organic endorsements or value
• How to retain authenticity through UGC
• How to balance and achieve global reach through local influencer activities
• The critical role technology plays in ensuring and maintaining a high quality influencer marketing program, high quality engagement and relationship management
Nicolas Chabot, VP EMEA, Traackr, said, “The buoyant global luxury market continues to evolve apace with a rise in new competition and new platforms and methodologies for engaging the increasingly elusive luxury customer.”
Regarding the opportunity to drive the business, he continued. “What’s exciting is that Influencer Marketing presents modern CMOs with the most compelling strategic and cost effective tool available today to engage and build authentic relationships directly with these niche specialist audiences and to harness influence over their purchase behaviour.”
Minter Dial, President, The Myndset, said, “Luxury market CMOs now must re-evaluate and realign budgetary spend around achieving true impact. The measurable benefits of advanced influencer marketing practice are enabling niche luxury clients to compete on a level playing field with major players…[As a result, a]ll luxury brands can achieve compelling ROI and demonstrably increase sales, brand resonance and achieve superior insights into their valued customers.”
Traackr’s Luxury White Paper is available for free download here.
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