LUXURY INSIGHTRetaining prestige whilst initiating digital engagement

• How does your consumer define luxury?

• What motivates them to purchase a luxury item?

• How can you tailor your approach with this in mind?

• What impact do new digital platforms and behaviors have on your business?

• Who’s doing it wow, trend analysis and unique approaches.

• Using this to differentiate.

Consumer

Positioning a luxury brand within the digital realm can be tricky. To do this appropriately we must take a look at the consumer, how they perceive luxury, their attitudes towards it and their behaviors within it. Understanding this is the key as it opens up the insight needed to best navigate suitable and effective platforms. Utilizing this, we must then look at which brands are capitalizing on it. And finally, by combining all of the above, we can then create strategies to differentiate, retain prestige and personalize the experience through emotional and tangible interactions. Your expertise is your brand, our expertise is consumer behavior and digital technology. Together great things can be achieved.

What defines luxury? Craftsmanship remains a key indicator of quality to the affluent A,B and aspirational C1 segments. Label tag and trademark patterns were rated highest in the lower income C2’s. Asia Pacific rated customization as a key indicator of luxury, and finally the most influential approach within the 16-24 year old segment, with 38% or 4 in 10 owning a luxury item, is though celebrity affiliations.

Quality and Exclusivity are the consistent elements of Luxury

Figure 3: Definitions of a luxury brand by gender, July 2011Base: 4,000 Internet users aged 16+

High quality materials and craftsmanship

One of a kind or limited availability

Exclusivity

High PriceLabel, tag and trademark patterns

Choice to customize the product

Gives the owner status or Respect

None of these

Male

A brand/product with celebrity following

Female

Motivations for buying luxury goods

As a treat/Indulgence

For the quality/craftsmanship As a reward

Advanced technical features

For the extra features

To look good impress/others

To set myself apart from others

To keep on designer trends

To fit in with others

WomenMen

The feel good factor associated with luxury items stimulates salesFigure 5: Motivations for buying luxury good for self, by gender, Sept 2011Base: 2,315 Internet Users aged 16+ who have bought luxury goods

Understanding the motivations behind buying a luxury item provides key insight to inspire activities, campaigns and strategies within marketing, branding and product development. Brands can use these insights in order to hook in the consumer emotionally. As a reward, what about the accomplishment bag? Or the graduation line, what about the BA degree bag, or the MA degree bag…possibilities are endless.

Creative, Emotional Content is key to Cognitive Recognition

There is so much noise in our lives, we are constantly bombarded with information. The result is the cognitive elements of our brains which trigger the memory and recognition processes, switch off and block. Consumer’s are no longer interested in being sold to, the shift into creative, branding led communication means we can now utilize more lateral and creative approaches to reach our consumer’s emotional receptors. Ie: The long term or working memory, enabling an emotional bond which triggers loyalty. Truly engaging customers. It’s no good just putting things on a screen; the content has to work hard for you.

Establishing long term memory

Trends and TribesThe future of e-commerce, search and social marketing are now tied to consumers attempting to curate experiences that represent their personalities and tie into cultural influences. Customers like to talk, share and converse, and this idea of user-generated content can also be a very valuable tool, if done right it can provide significant competitive advantages. WGSN, Drapers Retail Conference 2012.

Ecohedonsim, WGSN AW2012.

Cartier’s L’Odyssee campaign generated 43million views within the first two weeks of release. Further the video has been shared by 2 out of 10 users. (SM2) “Though there are many approaches to digital engagement for the luxury sector, the quickest rising category is video, reporting a 43% growth in 2011, More interactive initiatives will therefore define 2012. ” WGSN 2012 marketing trends: Top Ten

Prada Real Fantasies/ James Lima Victoria Beckham/Quentin JonesClick me

L'Odyssée de Cartier, Bruno Aveilen

Lanvin, Stop Frame Animation, Steve Miesel

Lady Dior/ John Cameron Mitchel

Vannessa Bruno/ Stephanie Di Giusto

Films: Emotional, Inspired, Engaging

TabletsNumerous luxury and high street sectors utilizing tablet and smart phone based applications over the Christmas period reported seeing increased traffic and high conversion rates. My-wardrobe has seen 400% year-on-year growth in iPad traffic, compared to 70% in iPhones. Further, following Schuh’s launch of its mobile and tablet-optimised site in December 2011, the company saw more mobile and iPad revenue than ever before with 24% of online traffic coming from iPads in December - this traffic accounted for 50% of sales. WGSN, Drapers Retail Conference 2012.

86% of web users now use a mobile device while watching TV. In other words, the way we consume television has changed irrevocably - becoming more about active engagement and interaction across multiple platforms at the same time than the lean-back activity it once was. Digital Trends Dec 2011, Mintel. The future of TV advertising is changing from a traditional ad to insightful and factual mini stories that relay ethos. Inviting the audience to interact in ways that are relevant to both the brand and the consumer. Use Tiffany’s as an example. They’ve recently launched a social site which gives their audience the chance to interact through the concept of “What Makes True Love”. Through video, mobile aps, playlists/radio, and using real people, the brand invites the audience to share their romantic stories and messages and experiences. Driven by one of the most emotional concepts available, Love. We especially like the “Love is everywhere” location based mobile ap.

Evolutions in Digital Consumption

Mcom = Fcomof F-commerce and all its capabilities through mobile devices will truly be realized. Shopping and retail as we know it will never be the same. In the not so distant future the like/brand following will connect to purchasing platforms through one centralized account and further- link to the consumer’s timeline. Any purchases made through facebook create a further opportunity to extract value, encourage peer sharing and drive branded content. Some great examples of sharing branded consumer related experiences is through the use of mobile ap music applications. Gucci has developed a branded DJ ap releasing play lists, interviews and messages all relevant to the brand and its audience. Further content, events, songs and stories can be obtained but they are linked to purchases as well as other participation lead applications. Generating more activity through all of its digital touch points.

When the ‘like’ feature evolves to ‘buy’ the power

F-Commerce, the futureIt can be hard to determine if the people affiliating themselves with your brand through facebook are actually your consumers. 6,000 likes doesn’t necessarily mean increased sales. However last week’s launch of 60 apps that allow Facebook users to share online activities, including purchases, helping you to recognize your actual consumer’s and extract value. This movement indicate that social networking sites are becoming an increasingly important way to motivate purchases through social interactions. WGSN, Draper’s Retail Forum 2012.

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Borderless Branding"The future of digital media in luxury will be based on borderless technology that will unite the physical store with the virtual platforms and brand experiences” Luxury Retailing, Dec 2011 Mintel. Using numerous external platforms in your digital marketing mix is still key for driving traffic back to your branded pages, these platforms act as a touch point athat hook and lead the user to the experience-your site. These pages are the free passes that allow you to offer VIP backstage access.

Branded Experiences, DifferentiationThe images above highlight that the world of luxury retailing is changing. Now more then ever is the time to understand your consumer’s lifestyle and how you fit within it, utilizing white spaces that provide personalized experiences, create emotional relevance and unlock commercial opportunity.

Powerful insight comes from taking a multi-perspective, lateral view of the consumer, the competitors and understanding how to cater to one and differentiate from the other. We like what a lot of brands are doing but the aim is to build on that and create something unique.

Q Thank you for your time, I hope some of the Insight provided demonstrates my focus andknowledge in within your sector. For more pleasedon’t hesitate to get in touch.

Ellissa White Fashion Stylist, Digital PR, Brandingm. 07967233607e. ellissa.white@gmail.com