Intelligent luxury brands have increased their digital marketing spend and engaged with agencies who have expertise in helping them redefine their digital advertising – so what are the benefits?
Why Luxury Brands are Investing in Digital
In 2023, eCommerce sales are expected to account for 20.8% of retail sales worldwide. This may not be an overbearing figure but one that will inevitably grow with currently 81% of shoppers opting to research online before purchasing in-store. Therefore to be successful and retain their market share, the fast-moving luxury brands are adapting to manage their reputation of exclusivity in the digital world.
It's not a new trend either - even back in 2014, McKinsey published a report suggesting that digital marketing efforts now influence at least 45% of all luxury sales. Unlike ATL campaigns, which require continuous re-investment to generate customer value, digital actions have high customer lifetime value with decreasing costs. They are highly measurable investments in the ongoing customer relationship since they reach qualified consumers.
Making the Most of your Digital Budget
At The GO! Network, the first step in our own process dealing with luxury brands is to help strategize and define what ‘digital advertising’ should include for them, and how to feature it within their marketing mix.
Paid media and online public relations are not enough for luxury brands; plans must also include: content, social actions, influencer programs, partnerships and CRM systems.
3 Winning Digital Marketing Strategies for Luxury Brands
Below are three points of guidance that luxury brands should consider to implement an effective digital marketing strategy.
Storytelling & Heritage
Heritage - either in a sense of tradition or by way of bespoke product creation - is expected when customers are paying a high luxury price point. Communicating the story behind the products, and explaining the values that define a luxury brand, is fundamental to effective luxury.
Digital marketing opens new opportunities for luxury products and services to tell their story in a much more interactive, immersive, and compelling way. Brands have free reign to evolve and create unique lifestyle experiences that define their identity.
NET-A-PORTER has the brand promise “luxury that delivers.” This strapline is consistently and compellingly activated across all customer touch points such as online, via The Edit, on mobile or, as the same-day delivery.
Seamless integration of the clear narrative and technology gives luxury brands the opportunity to connect with their customers at every touch point and price point.
Creative direction and photography is arguably one of the best mediums for evoking the aspirational emotions that we connect with driving a luxury vehicle, wearing designer clothing, or experiencing something exclusive.
With this in mind, visual social networks like Pinterest and Instagram represent a glaring opportunity for luxury brands to raise brand awareness and advocacy with limited investment required.
Chanel is one of the most ‘pinned’ brands on the social network, with over 1,244 pins of Chanel products pinned per day on average. This is actually all the more impressive considering that Chanel don’t actually have an account on Pinterest - it’s entirely driven by their advocates!
As digital spending by modern luxury consumers increases, so do their digital expectations.
Generally speaking, luxury brand websites are very stylish, but there’s also an often-overlooked need for an exceptional user experience and functionality.
According to eMarketer, when shopping online, luxury customers check an item seven or eight times before the actual purchase – this makes it absolutely crucial that an online store behaves as seamlessly as any in-store experience.
What’s Next for Luxury Brands?
In the near future, I get the feeling that talking about online and offline marketing will be completely outdated; both are integral to the other and should work in tandem.
For the best digital-savvy luxury brands, they’re already making gains. For the rest, there’s no time like the present.
Start 2023 with confidence! If you’re looking to invest in a digital marketing strategy for your luxury start-up in the new year, let us know your requirements and one of our senior team will be in touch to offer free, impartial advice.