What’s the definition of luxury? That’s one of the questions brands are facing as the evolving digital landscape shifts yet again.
From a discussion among luxury brand managers and consultants, at this week’s South By Southwest Interactive Festival, the quick answer was “it depends” on how one brand might define luxury versus another. The long answer, of course, is much more nuanced. Those weighing in included Ambika Samarthya-Howard, group account director of Havas Luxe; Gregory Pouy, CEO, Lamercatique; Judy Bassaly, ex VP, trade marketing at Giorgio Armani, and Thomas Serrano, founder and president of Havas Luxe.
Digital access means customers want instant purchase options, immediate feedback and direct connections with the brands they support. Since luxury brands are built on a foundation of being exclusive, aloof and scarce, this type of direct access through digital channels creates conflict. The “new” customer wants to visit runway shows behind the scenes via Snapchat, purchase the latest handbag via a “buy now” Instagram button, and connect directly with designers with Twitter. So how are these brands, built on limiting distribution and connection, attracting the customers of tomorrow without losing the very cache that makes them luxury?
After all, $25 billion was spent on online luxury in 2015, and yet the luxury market is only reaching 50 percent of its online potential. There are real gaps between what customers want and what luxury brands offer. Ninety percent of customers shop online, but 40 percent of luxury brands don’t sell online in any capacity. And, despite the fact more customers are using phones to browse and buy, luxury brands are not mobile optimized.
Yet it’s not all gloom and doom. To gain customers seeking to be connected but maintain the luxury status, a few brands are experimenting:
Behind the scenes
This seems like the easiest way to marry the ideas of access and exclusivity: luxury brands are sharing sneak peeks into how things are made to show their craftsmanship to how models are dressed for the runway show.
Inviting sharing by not sharing
Exclusive events for customers is still a strategy used by luxury brands. By not communicating publicly, the events feel extremely exclusive. Attendees will most likely share via social media to show their inclusion. Jewelry designers and others with strong visual display options may see the most success in this strategy.
Relying on the traditional fashion calendar and building anticipation for collections by showing on the runway and then only offering for purchase months later no longer really applies. Both Burberry and Tom Ford have announced collections which are immediately available after the runway shows. This is a huge disruption in the luxury fashion industry, and looks to serve customers through more and quicker access instead of the scarcity model of most brands.
The intersection of luxury and digital is far from figured out, but there are exciting changes to how things have always been done. After decades of relying on ideas like heritage iconic brands must find new ways to connect with customers of today, and perhaps, more importantly, those of tomorrow.
SOURCE: SXSW Spotlight: The conflict between digital democratization and luxury brands | Retail Customer Experience http://www.retailcustomerexperience.com/articles/conflict-between-digital-democratization-and-luxury-brands/?utm_source=Email_marketing&utm_campaign=EMNARCE03212016&cmp=1&utm_medium=htmlemail