Luxury in 2021: Four Focus Areas for Growth And Success
The year 2020 will forever be synonymous with words like uncertainty, unpredictable and unprecedented. But despite all the question marks that the year left us with, it has also given us some clarity on what the path forward for luxury brands could look like.
Our global experts met up last month to share their unique regional perspectives and thoughts impacting international luxury brands and marketing strategy, and also uncovered a few of the strategic imperatives that will be important for all brands in the luxury ecosystem to consider. We’ve broken these out into four easily digestible focus areas: digital’s seat at the table, tackling the misconceptions of data, the domestic shift, and the secondhand luxury frontier. Enjoy a round-up of their advice and expertise here.
Digital Takes Its Seat At The Table
A bright spot in the pandemic has been that digital teams have taken a real seat at the table within many luxury businesses. Learning how to engage with digital-only consumers has become a priority for many brands who used to view digital as an afterthought or a nice-to-have in comparison to the in-store experience. Even as we start our return to some normalcy, it is important to take a pause and consider what’s important for the experience of digital-only consumers, which is still a very new concept for many brands. Nicole Jennings, EVP of Client & Media Operations of North America, discusses the trends she is seeing with clients in the luxury space:
While brands became digitally advanced out of necessity through COVID-19, this consumer behavior is very much here to stay, so keeping up this digital momentum will be essential as 2021 progresses. Federico Da Ros, Strategy Lead in EMEA, talked about the idea of taking this new way of thinking a step further and viewing digital and offline as one cohesive brand experience. Meaning, it’s not just about activating display, social or PPC for the first time, but really looking at how all of these touchpoints come together to create the brand experience and give you a fuller picture of your clients’ wants and needs.
Navigating Through The Misconceptions of Data
We can’t talk about keeping up the momentum in digital without discussing that four-letter word that seems to be everywhere: data. This past year, brands realized that they had access to far more data than they ever could have imagined before. And the reality is that most are not set up to manage all of this data effectively, with point of sale and digital CRM not in sync in most instances. More than almost every other industry, luxury consumers expect the brands they shop from to know them, and the reality that most brands are not set up to do this online is very apparent. In the clip below, Federico discusses an example of this that he encountered with a client:
Our Regional VP of APAC & RU, Yanyan Froud, dug deeper and discussed the reasons why many luxury brands have deprioritized investing in CRM, and that is concerns around data management and not wanting to appear “like a stalker” with targeted ads. However, brands should rethink this mindset, and instead view it not from a sales perspective but rather, from the perspective of being able to provide their clients with more services once they have their personal details. Yanyan explains a couple examples of how she has seen clients have success with an integrated CRM in the clip below:
Nicole closed out the data conversation with a simple tip: retargeting works for a reason and reminders can be very helpful for clients who lead busy lives.
The Domestic Shift – Changing How People Shop
While the digitization trend is something that we have seen across the board, there are, of course, regional nuances. Here, Yanyan breaks down the large increase China has seen in domestic versus international luxury sales:
For MENA, Market Director, Kinloch Magowan, explained varied reasons for the domestic shift the region has seen. For one, malls in the Middle East have long been a place for social gathering. And with the lockdowns the region has experienced, these same individuals are looking to fill that need for social gathering online. Here, he discussed this trend and others he has seen in the region:
The Secondhand Luxury Frontier
Sara Pollack, Global Director of Marketing, kicked off the discussion about secondhand luxury with a powerful statistic: 25% of global luxury consumers have bought resale. It’s become an important part of the conversation, despite many luxury brands looking the other way. Resale also poses an opportunity for brands to learn more about their consumers and have better control over their brand in a marketplace environment. In fact, brands can leverage marketplaces for products that usually don’t get as much visibility because marketplaces have their own marketing budget too. Federico explains how rethinking these marketplaces as partnerships and an extension of your brand’s domain can be helpful in moving forward.
Kinloch discussed what he calls “the paradigm of availability”, which speaks to the how to balance availability with exclusivity of the product. He elaborates in the clip below:
Yanyan also shared some great insight into how even the perception of secondhand can differ from market to market, so that is something brands should keep in mind as well. Japan is an excellent example of how secondhand products are seen as unique and classy in many instances:
To close, we leave you with a great piece of advice Kinloch gave to luxury marketers: “Brands should sell by not selling, and instead come to their clients with empathy and humility. Engaging beyond selling a product will be key in our digital world.”
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