Luxury which includes clothing, footwear as well as cosmetics and fragrances has been a successful industry long led by creativity, art, emotions and inspiration. However, data driven marketing is the latest trend as more than 45% of all luxury sales are influenced by digital marketing. So the ultimate question is;
How far should the luxury industry rely on data driven marketing strategy while retaining its brand values.
When trying to understand luxury, it’s sufficient to analyze the French brands to draw broad conclusion on the evolution of this industry. (prior to the impact of protests). Driven by an increase in consumer demand, international growth, online sales, market expansion and tourist growth. France became the top performing country in luxury goods sales with 18.7% year on year growth (FY2017).
According to a report published by Deloitte ‘Global Powers of Luxury Goods 2019‘, 4 French companies are among the top 11 luxurious companies in the world. L’oreal, LVMH (Louis Vuitton, Givenchy…), Kering (Gucci, Yves Saint Laurent…) and Hermès (2017).
Why Luxury marketing needs to be data driven?
Unlike grocery shopping, spending a month’s salary or more on a luxurious item is a big decision that will require considerable time of thinking & research before purchasing.
The consumer ‘buying signals’ that reflect their intent to purchasing is what digital marketing can make use of to help generate more sales. Buying signals are everywhere. From accessing the website and spending time reading product details, to google search for reviews & trends, browsing history, location data, lifestyle interests, in-store visits, and actions on social media. These signals along with the right analysis of data can help brands anticipate the user journeys of successful buyers, and understand customer behavior prior to purchasing.
There are various forms of new channels that brands have been utilizing like influencers, content aggregators, reviews websites. As online shopping grows in the luxury industry, along with these new channels, grows the need for clear data. Data that will explain how did these customers reach to your store or website, and what steps did the customer take prior to purchasing.
Data driven marketing will allow you to reach out to the most profitable customer. Although targeted marketing is more expensive than broad targeting with the hopes of reaching your customer. The return of investment for targeted campaigns is definitely worth the investment.
The number of rich people globally is rising rapidly which means more money can be spent on luxury. According to Capgemini’s World Wealth Report 2018, for the first time in years, the high net worth individual wealth rose to 10.6%.
But luxury consumers are changing. To grow, luxury needs to meet the demands of millennials, those born between 1981 and 1996 are their new customers. These young customers are high earners but not rich yet (HENRY) & form around 75% of Luxury brands customers. The millennial generation are educated, tech savvy, short attention span, & value experiences over things. What makes this segment extremely valuable for luxury brands is that most rich started out as ‘HENRY’. Therefore identifying these long term prospect customers is important to ensure the brands future growth. Millennial luxury shoppers invest a lot of their time and money online, on mobile apps and on social media. Luxury brands should not only listen to what their customers are saying, be present where its customers are, but to also thrive in the digital universe.
Age Breakdown Luxury Buyers: % who say they mainly purchase luxury items
Although Luxury has been very slow to adopt eCommerce and embrace the digital wave. It’s obvious that most brands are making up for the time lost pretty fast. Even well established luxury brands that firmly opposed eCommerce operations and said will never sell online, have all launched their online stores with the exception of Chanel. Not only that but also invested deeply in the digital industry such as eCommerce, social media, and digital marketing. Brands are also partnering with luxury-specific technology tools (augmented reality mirrors, AI-based counterfeit-spotting) and mobile apps along with their traditional in-store business.
The above mentioned digital tools are not separate from the core brand positioning. The online experience should be complementary to that in-store reflecting the brand values. This concern has driven luxury brands to handle their digital activities internally instead of relying on third party websites which they have little control on.
How can Luxury brands be data driven
A successful case would be that of Versace. Their objective was to increase sales by identifying among their current and potential customers, the high end segment. This segment would be more likely to make a “big/high ticket product” (items having high selling prices & profit margins). Their data driven marketing campaigns resulted in a 35% increase in sales, 400% increase in ROI, & 3.3K increase in in-store visits. Below are few tips inspired by this campaign:
First Party Data:
The starting point for any data driven campaign is always using the first-party data. This allows you to leverage the valuable data of your current customers, website visitors, and ad results. Ensure data is stored in a useful format & then identify the most useful metrics.
Analyze transactional & customer data to identify best customers (spending more, purchasing more frequent..), and understand their buying journey. Then used this data & algorithms to create a ‘lookalike modeling‘. A method that allows you to find more people (prospective customers) similar to the existing ideal customers. Both audiences (existing & potential) will share close behavioral characteristics and specific attributes; preferences, interests (more detailed, the better).
Launch targeted campaigns:
Targeted campaigns with an incentive/offer that is based on the LTV (lifetime value of existing customers). This states the expected revenue to be generated over time or what is a customer worth. LTV helps in determining profitability and how far can a company can go when giving special offers/discounts. Note that targeted campaigns are always more expensive than broad campaigns but higher in conversion rate.
Use Geo-fencing to target your in-store visits, competitors or any other location. Once a consumer (app installed & opt-in for location sharing) walks within the geographical fence, a push notification is sent that can even be laser targeted. Otherwise brands can run ads targeting unknown users in this geographical fence that could even be a competitors location, a method that incentives in-store visits.
Luxury brands can easily drive traffic online unlike regular fashion. However driving the right traffic that will lead to potential sales has been the ultimate challenge for luxury brands. Brands should transform visits into experience that fit Luxury of being exclusive, emotional, quality & rare,
Deep Analysis & Improvement
Therefore, it is significant that brands have outcomes that will automatically require a certain ‘metric’ to measure, such as purchases, consumer behavior, channel responsiveness, or campaign ROI. Analysts should present deep data insights to apply campaign enhancement & improvement before investing a higher budget.
Privacy & GDPR
With the rise of privacy regulations worldwide & GDPR, luxury brands must persuade its consumers to share their data. This can be done in exchange for a value such as a special offer and data must be well protected.
In 2025, online sales will account to 18% of the total luxury sales and in the next ten years online sales of luxury goods will triple!McKinsey & Company
No brand is able to withstand the potential growth possibilities. It is expected that luxury brands will pull money out of print and move it to digital next year. The difficulties of undergoing digital transformation should not be underestimated. Powered with customer data & tech, luxury brands will be able to easily embrace online selling and adopt a data driven marketing strategy.
Even when marketers prefer to rely on their experiences rather than research, that is too, the usage of data collected through years of experience.
The future of luxury brands online: Looking to into the leading French Luxury Groups
Kering‘s success through Gucci’s digital strategy helped the brand generate 50% of it’s sales from millennial. 35 year olds and younger, which is a segment that has been a concern for luxury brands. Gucci became the best performing digital luxury brand according L2 Research, a company that specializes in data driven analysis.
In 2017, LVMH launched 24s.com. A multi brand ecommerce platform / marketplace that offers products from over 200 luxury brands & is not limited to LVMH’s owned-brands. The website is successfully growing and providing a new luxury shopping experience similar to that of physical store.
How many of the luxury products purchases take place in a physical store, online from a computer or mobile device:
Apple has finally unveiled t
On Monday, March 9, 2015 Apple CEO Tim Cook revealed the brand-new MacBook, its newest and thinnest MacBook ever which through Apple Online Store, Apple Retail Store and Apple Authorized Resellers.
Apple’s senior vice president of Worldwide Marketing,said: “Apple has reinvented the notebook with the new MacBook, and at just two pounds and 13.1mm, it’s the thinnest and lightest Mac ever. Every component of the MacBook reveals a new innovation. From its fanless design, ultra-thin Retina display and full-size keyboard that’s 34 percent thinner, to its all-new Force Touch trackpad, versatile USB-C port and breakthrough terraced battery design, the new MacBook is the future of the notebook.”
Here’s everything you need to know about the New MacBook 2015: tech specs
The amazing MacBook 2015 screen has a 12in Retina display which is thinner than the previous 11in MacBook Air, and a resolution of 2304×1440 pixels so you can enjoy movies in full HD (1080P) with a measure less than 0.04 inches think.
Keyboard & Trackpad
Force Touch Trackpad is the new trackpad which uses force sensors and a haptic engine which means that a deeper click or a force click on an address can be used to launch the Map app similar to the technology used in the Apple Watch. The settings can be customized to suit your preferences.
Specs & Ports
Apple also introduced the new USB-C port, for data transfer, charging and video out all in just one single connector which means reducing the number of ports on the notebook to just two!
The brand new MacBook is 13.1mm-thin and weighs only 2lbs. Apple has applied miniaturization techniques which means greatly reducing the size of its board components, 67% smaller than the 11in MacBook Air, making the New MacBook’s logic board the most compact logic board.
This is the first fanless Mac with no moving parts or any vents making the new MacBook so thin, light and silent. The processor has a fifth generation Intel Core M processor, with Intel HD Graphics 5300.
The new MacBook comes in three colors: gold, silver and space grey.
Apple applied new battery technologies. The new MacBook has all-day battery life despite the thinner and lighter design. Apple’s battery life estimates are 9 hours of wireless web browsing and up to 10 hours of iTunes movie playback.
Apple’s brand new MacBook is coming April 10th with a price starting at $1299 for the entry-level MacBook which includes 1.1GHz dual-core Intel Core M processor and 256GB of flash storage. Another version is available for $1,599 including 1.2GHz version and 512GB of flash storage available for.
For more information you can visit Apple Online Store.
World famous mobile messaging service WhatsApp has started testing out long-awaited feature. The voice calling feature is beginning to roll out to some users but still isn’t yet available to everyone . WhatsApp calling uses an internet connection to make phone calls instead of a carrier’s network.
WhatsApp hasn’t made an official announcement yet on Friday night pictures and videos appeared on Reddit. According to a Reddit user: “Its requires an invite, a person with the call feature needs to “call” another person to be able to start using the feature.”
Check out images and a video of the new user interface that features voice calling.
Check out the new Iphone 6. Apple officially announced the launching of its new Iphone. This model is available in two sizes, Iphone 6 4.7 Inches and Iphone 6 Plus 5.5 Inches, both bigger then any earlier Iphone. Both Iphone models are available in three colors, grey, gold and silver and are innovative when it comes to design, curved and thinner then ever with 6.9 mm Iphone 6 and 7.9 mm Iphone 6 Plus. Not only Apple introduced a bigger display but Multi-touch display with brilliant colors and high resolution. Inside, the new model has a brand new A8 Processor (64-bit processor) and a fifty percent faster graphics chip accompanied by the M8 motion co-processor which means higher performance and enormously efficient. Apple promises a longer battery life up to 14 hours of talk time. The iSight camera features an Apple-designed video encoder and image signal processor built into the A8 chip to produce high quality images (1080p HD video at 60 fps) and videos. Concerning connectivity, iPhone 6 promises 3 times faster WIFI with faster LTE download speeds up to 150 Mbps which gives users the best experience when browsing the web or streaming music. Security, right at your fingertip with the Touch ID technology that uses unique fingerprint identity. Accessories, Apple also introduced leather and silicon cases that fits perfectly the new curved Iphone 6 with different colors, red, blue, brown, black and beige.
Iphone 6 will be available on September 19. Pre-orders on September 12th. Prices on-contract are at $199 16GB model, 64GB $299 and 128GB for $399. The new iPhone will be available in 115 countries by December 2014.
The job you never expected! An Agency Posted a job online with the following description:
Position: Director of operations:Standing up All Time, Working 135 to unlimited hours per week, No vacations, Salary: 0$, No time for sleep, Working days include New year’s, Christmas and any other holiday
The Job ad received around 2.7 million viewers but only 24 people applied. The interview was done view webcam and their reactions were captured on video!
Check out what happened, check the surprise in the END!