Digital marketing for luxury brands is a hot topic at the moment, and there are many conflicting opinions on what luxury brands should be doing online to engage with their audiences, and how. We have a number of luxury brand clients, and as such, we will be creating a weekly news bulletin which will summarise the week’s top articles on this subject. Below are this week’s top stories:
1. 140 Conference highlights the importance of social media to luxury brands – This article summarises findings from the 140 conference in LA, which highlight that luxury brands do have a place within social media.
“Last week, Elizabeth Wahler of LadyLux.com, Brad Pivar and Macala Wright spoke at the 140Conf regarding how luxury consumers use social media and how luxury brands use or can use Twitter.
According to the Luxury Institute:
- In 2008, 33% of luxury brands had e-commerce sites.
- In 2009, 66% percent had e-commerce sites.
- Luxury consumers are individuals who make $419,000+ per year.
- 48% of them are on Facebook, and 14% of them are on Twitter.”
The 140 conference comes to London on the 17th November. See the conference website for more details.
2. Luxury Lab study ranks luxury brands by their ‘Digital IQ - The Luxury Lab of the New York University (NYU) Stern School of Business recently conducted a study which was designed to assess the digital competence of luxury brands. This article summarises some of the findings.
“The various brands were allocated a “Digital IQ” based on their search engine optimisation; brand translation (the aesthetics of their digital media) as well as their messaging and conveyance of the brand’s heritage. Also ranked was their leveraging of the medium, as well as their use of technology and interactivity, and effectiveness of their user interface. In addition, ranking applied to the brand’s use of social media…
…Luxury watch brand TAG Heuer was the only watch brand to rank in the Genius category. According to the study, “great search optimisation and thoughtful user interface lift TAG Heuer over mega-brand Rolex.”
3. How discounting affects luxe consumers’ perceptions of luxury brands – This article looks at the impact that discounting luxury goods has on luxe consumers.
“Moreover, promiscuous discounting may be especially off-putting to the people luxury marketers can least afford to lose these days: the really, really wealthy. Brands that indulge in such discounting “have added insult to injury because they are diminishing and devaluing their brand cachet.
Though it may sound odd to people who don’t make a practice of buying luxuries, those who do so are inclined to believe (unless price fluctuations give them reason to wonder about it) that such items are worthwhile at their ordinary prices. In the Luxury Institute’s August polling, for instance, 74 percent of respondents agreed with the statement, “I buy luxury items for quality. Luxury products last longer and keep their value.” That far exceeded the number agreeing that “I buy luxury items purely for the enjoyment of it. I like to surround myself with beautiful, exclusive and unique products” (39 percent) or that “I buy luxury items as a reminder that I’ve made it” (19 percent). Likewise, more than eight of 10 affluent consumers surveyed for a recent Ipsos Mendelsohn report agreed that “When it comes to quality, I believe you get what you pay for.”
4. WGSN two-part report affirms the importance of social media for luxury brands, and provides “how to” examples – In part one, WGSN explains why it’s imperative for luxury brands to consider digital media and social networking, or risk losing control as the conversation occurs without them. In the second part, WGSN looks at which platforms to consider and how best to use them. Graphic Alliance was featured in the above report, and, as WGSN is subscription only, we have summarised the findings on our blog.
5. eBay goes upmarket with fashion site launch – This Brand Republic article announces that eBay has launched a website written by fashion followers in an attempt to attract more ‘well-to-do’ shoppers. The site aims to highlight the more high end wares that eBay has to offer.
“Meredith Barnett, the site’s editorial director, said the website is aimed at sophisticated shoppers who may be familiar with eBay, but not aware of the full range of products on offer.
“The merchandise is certainly there, but for somebody who isn’t an eBay addict or fanatic, sometimes you don’t know where to begin,” she said.
Contributors to the site have written for shopping magazine Lucky, W, InStyle and The New Yorker.”
6. Luxury brands are moving online to compete with discounters – This article discusses the fact that Saks Fifth Avenue is experimenting with short online “private event” sales as means to compete with increasingly popular high-end discount websites.
“Saks’ new offering, called “Fashion Fix”, comes as the luxury department-store chain struggles to find new sources of revenue in the current economy.
Though luxury retailers have traditionally been slow to adapt to web-based sales and maketing tactics, a recent Bain & Co. report projects 20% growth in overall online sales of luxury goods in 2009. This compares with an 11% drop of overall global sales of high-end clothing – and indicates a need for Saks to adapt to changing consumer market demand…
…In a departure from previous practices, luxury brands are increasingly turning to the web for advertising, according to a marketing study conducted by NYU Stern School of Business. The report found that 66% of luxury brands now advertise online, compared with just 33% of those same brands a year ago.
Last week, the high-end French brand Lacoste announced that it would transition all of its US ad spending to digital, Forbes.com reports.
Lacoste, which targets the 18-34-year-old demographic, said that it will now spend its estimated $12 million annual US ad budget on display ads on sites such as Facebook, Hulu, Pandora, and Condé Nast’s websites.
7. Forbes says: Luxury Fashion Brands Must Embrace Social Media – Forbes presents a social media how-to for luxury marketers – and others – that fear social networks.
“Find the right brand “voice.” For luxury fashion brands that pride themselves on elitism and inaccessibility, this may be the most difficult challenge in developing a social media strategy. Communication on Facebook, MySpace and Twitter must be inherently less formal, more personal and intimate than the boilerplate copy that appears on a brand Web site. Using a designer or a creative director is a good way to start. “At Saks in New Orleans with the girls from Mississippi! TB,” tweets designer Tory Burch.”
8. Finally – Yet another luxury brand online discount store launches… – Following in the footsteps of sites such as Gilt, Cocosa, and Secret Sales, Designer Social launches (http://www.designersocial.com/), a site where members can purchase discount luxury goods, or trade their own personal goods in for a discount on other luxury items.
