What’s next for luxury digital marketing?

Digital marketing is becoming increasingly important for luxury brands, particularly in light of the global pandemic, which has triggered a shift in consumer habits.

While many of the key principles forming the essence of what it means to be luxury are still of paramount importance, the ways in which they are consumed is changing and a new generation is entering the core clientele.

For any brand, refining their approach when it comes to luxury digital marketing and luxury content marketing is now vital. 

Defining luxury

Historically, luxury brands have been distinguished by their skilled craftsmanship, material ostentation or hard-to-acquire reputations, which are linked to history, elusiveness and/or connections to prestigious individuals.

Sophistication and exceptionalism are also closely tied to perceptions of luxury, along with newer expectations of personalisation, particularly during the purchasing process. All these factors add to the desirability of a brand, drawing consumers towards its products and community, and setting it apart from competitors.

Research conducted by Deloitte in 2017 highlighted that quality was “the single most important attractor to a brand”. Uniqueness was also highly valued, especially for attracting millennial consumers, who were less likely to value heritage or traditional aspirational qualities. 

On top of this, consumers are becoming increasingly attentive to how sustainable luxury brands are.

Shifting to digital luxury marketing

The relationship between digital platforms and luxury brands can appear to be somewhat paradoxical.

As INSEAD Assistant Professor of Marketing David Dubois observes:

“Digital media simultaneously amplifies the uniqueness and exclusivity of luxury experiences as well as the similarities. Objects shared on social media platforms look the same and therefore defeat the very purpose of luxury consumption, which is about uniqueness and exclusivity.”

Jamie Shaverdi, account director at Hooray Agency, has described how the shopping experience is often closely linked to the sense of luxury, exemplified by the following factors: “the smell of the showroom, the texture of the materials, the quality of craftsmanship, the elevated level of service”.

By contrast, digital media is usually characterised by mass appeal, accessibility and availability: websites and platforms are easily accessible from both home and mobile devices, social media counts views and interactions with posts and content is commonly free to access. As a result of these contrasting qualities, it is becoming increasingly difficult to control brand image.

While the COVID-19 pandemic has accelerated a move to digital for consumers, this transition is something which luxury brands will need to consider in the long term and adapt to accordingly. Statista has already forecast that more than half of luxury purchases will be completed via ecommerce by the end of 2030.

This change was necessary following market losses for the luxury goods sector, which declined by 23% globally in 2020. Website traffic rose significantly and with it, the cost of digital advertising. 

The demographics of the core luxury clientele are changing, with millennials estimated to account for more than half of the global luxury goods market by the middle of the decade, eventually to be overtaken by Gen Z - and these increasingly younger generations prefer shopping online for luxury items.

This generational transition comes with new customer values, too. Rather than desiring products with a brand legacy, as older generations do, younger consumers are more interested in how luxury links to status and experiences. Find out more about the new luxury consumer. 

Embracing new approaches in luxury digital marketing

Evolving with these developments, luxury brands are adapting in several ways. Research conducted by R/GA has demonstrated that traditional loyalty schemes are no longer effective for inspiring genuine loyalty and that customers are keen to see brands supporting causes, particularly those related to the environment and health.

Across the spectrum of luxury goods, there are key marketing strategies to consider in order to thrive in a digital landscape: creating digital relationships with customers, building a story and utilising data insights for the ‘laser targeting’ of audiences.

Digital relationships

In an increasingly digital market, the importance of creating a positive digital relationship with customers cannot be understated. Statistics from Équité Research indicated that the ‘digital journey’ directly influences 95% of luxury purchases.

But what makes for a positive digital journey?

Similar to the in-person shopping experience with luxury brands, personalisation is key. Tailoring experiences helps to remove the sense of anonymity for digital visitors and encourages them to engage with the brand, differentiating it from other websites.

Personalisation is not only beneficial to the customer, but has proved to boost revenue by between five and 15%, according to McKinsey & Co. 

Technology-wise, website speed is incredibly important. Findings from Yottaa show that pages which took longer than four seconds to load led to over half of customers bouncing off the site. When the loading time was less than four seconds, more than half of browsers ultimately became customers. Optimising site speeds for faster customer journeys should therefore be a priority and can directly influence sales. 

Beyond the browsing and purchasing stages, customer aftercare must also be seamless and can make or break a brand in the eyes of a consumer. Daniel Langer, CEO of Équité and Professor at Pepperdine University, has found that most break-ups with brands “happen during brand interactions when a single unexpected negative experience wipe out all the positive experiences that came before it.” 

To minimise losing customers via cracks in an otherwise smooth digital journey, Langer advises that responses should be timely, deeply caring and, as with the initial browsing stages, personalised. Responding to negative experiences in this manner is not only crucial for retaining the customer, but also for preventing the alienation of new buyers, who may be discouraged by negative reviews from others.  

Storytelling for luxury brands

Successful brand stories are defined with precision, offering entertaining and unique experiences for consumers. The primary purpose of these stories is to create desire: the more customers engage with a brand, the more they can come to value it beyond the functionality of the products themselves. Langer refers to this as Added Luxury Value and a common example within luxury brands is for consumers to become collectors, striving to own every model or colour of their favourite item(s).

Across this content, consistency is paramount – and this consistency is required to span multiple platforms and media. Fresh approaches to content have incorporated the use of augmented reality, virtual tours and interactive content, to create material that Shaverdi describes as being “as elevated as the product itself”.

Unique and immersive experiences are currently epitomised by the likes of Gucci’s in-app avatar options, or the partnership between Gucci and social app Zepeto, which allows users to dress their avatars in Gucci.

This form of content is becoming increasingly important, not only for the shift to digital, but also in order to appeal to younger generations. Almost 90% of Gen Z use mobile apps with video streaming or calling capabilities, according to Agora. However, this is not to say that more traditional marketing techniques, such as email marketing, should be abandoned.

Read more about storytelling for luxury brands.

Laser targeting

Interlinked with the personalisation of content, laser targeting uses both big data and AI to build customer profiles and service customers tailored content and recommendations. This type of targeting is most effective when it taps into the emotional needs of a customer and, with personalised experiences increasingly becoming an expectation, is vital at all stages of the digital journey.

The volume of customer data currently collected is at an unprecedented high and can span purchase histories, digital interactions within the company, social media interactions and movements both online and in the physical world. All of these can be used to build behavioural biometric profiles of customers, which can be used to inform the content they receive.

Using this information to appeal to a customer’s emotions can be useful for building affinity, especially given the apparent decline in loyalty scheme results. This form of engagement is therefore beneficial to the consumer in that it helps them to feel valued and positive about the brand through its strong digital relationships.

Take advantage of our FREE content consultation here to talk to us about any luxury marketing issues you’re struggling with.

What's next for luxury?

While we have focused on digital marketing and the intent of engaging consumers to buy physical products, some brands are already offering digital versions of their goods.

Gucci’s Dionysus Bag with Bee, for example, was reinvented for online gaming platform Roblox. It sold for $4,115, a price far in excess of the physical bag’s cost in the real world. However, this could well be a sign of things to come, as multiple platforms work towards the development of a metaverse and customer journeys increasingly take place digitally. The growth of virtual worlds such as Roblox is also continuing, with their combined revenue predicted to approach $400 billion by the middle of the decade.

What we can witness is the increasing digital focus and digitisation of luxury brands. As we have seen, this requires investment in technology in order to benefit from the value AI and personalisation can bring. Just as significant should be the investment in content through which to attract and respond to consumers and their appetites around luxury.

For now, luxury brands should focus on creating a strong digital presence, using data to improve targeting and fostering digital relationships to win over the luxury consumer of tomorrow.

Take advantage of our FREE content consultation here to talk to us about any luxury marketing issues you’re struggling with.