marketing luxury

A digital opportunity for luxury brands

Isaac Mostovicz writes that luxury brands must increasingly consider the diverse media habits of their target market...

A new report from the Luxury Institute, a global body looking to provide a voice for the high net-worth consumer, found that wealthy individuals 35 years of age and younger are avidly consuming a wide range of new media on smartphones and tablet computers, and quickly losing the television, radio and print newspaper consumption habits of their parents.

With more Generation Y consumers watching online video (78%) than those who regularly read a printed magazine (76%) or newspaper (68%), the case for luxury brands to extend their online presence is continuing to be made.

“This is clearly a tipping point, with the rising generation of wealthy consumers consuming media in vastly different ways than anyone did just a decade ago,” Milton Pedraza, CEO, the Luxury Institute, said.

Furthermore, with 70% of respondents in possession of a smartphone, and 23% an Apple iPad, it’s clear that luxury brands need to consider their mobile marketing strategy as carefully as their broader online and social.

As I have previously discussed, online marketing and social media are certainly tools that luxury brands are beginning to explore, but this report further corroborates why engaging with consumers through digital channels can be particularly fruitful.

Bookmark and Share

On Luxury Marketing

Isaac Mostovicz writes...

car

This week Echelon Marketing Group released a study about marketing luxury items. I haven’t had the chance to review their data in depth (so I don’t know the size of their sample or whom they were talking to), but on the surface they seem to have found several interesting things:

– Luxury marketers need to better understand whom they’re going after

Echelon President Don Neal:

“Marketers rely primarily on four categories of data—demographic, geographic, behavioral and attitudinal—however, luxury marketers not so much. To understand who can afford expensive products and the impact of money on their attitudes and behaviors, they also need to consider a fifth category based on economic insights.”

– Luxury marketers aren’t that great on focused consumer messaging; only half of luxury marketers engage in one-on-one luxury marketing (though 85% say they want to).

– Email is the least effective vehicle for presenting a luxury brand image. Direct mail, catalogs, telephone calls and special events involving consumers are more effective.

Neal:

“When invitations are sent to a select group to test drive cars during a special event, research shows six out of 10 of them wind up buying a car.”

These findings suggest that there’s a lot of room for luxury marketers to become more effective. A recent Jupiter report suggested that affluent people spend more time online–but perhaps the ‘cheapness’ of email and its association with unsolicited spam (or a deluge of work from the office) keeps it from being useful.

It’s all about real luxury experiences–when marketers can truly engage potential buyers with their products, their efforts translate into sales.

You say of this article...

Bookmark and Share

Rentadiamond?

Isaac Mostovicz writes...

The new trend of renting designer items instead of buying them seems bound to extend into the jewellery arena sooner or later….

I would like to discuss this trend from the point of view that the role of luxury is to enhance person’s self esteem.

Today, people seem attached to their “things” as a defensive tactic. However, on its face, it seems as if by renting a “thing” for a day would not do the trick as the temporality of the action will not allow for the needed emotional attachment.

In the ‘old days’ brands that lasted forever, as the London shoe designer that promised that his shoes will exist even after their owner will die, were built around this idea of building a lasting relationship with their owner.

However, with fashion statements that keep on changing every six weeks, luxury brands have had to change their strategy. Good brands have ‘a look’ and then create new incarnations of that look to maintain freshness and exlusivity. For example, my mother in law liked to buy Celine whereas my wife finds this line unsuitable for her. In other words, people start to be identified with certain brands and even when fashion changed, “their” brand supplied them with their needed look and feeling part of a stable fashion.

Nevertheless, we can see people who are able to establish their own brand or statement. In this case, the brand that they use does not have a real meaning in that we talk about a “Chanel” woman as in such a case, it is the woman who decides on what fits her.

Thus, we can see two trends that derive from the development of luxury brands. The older trend is a message of security and power where the woman can make her own statement, regardless to the message that the brand is interested in.

The newer trend is one of instability and temporality when a woman is looking for her own identity. With mounting costs of luxury and designer’s items this identity-seeking exercise became exorbitantly expensive.

Thus, these women will look for more economic solutions and will prefer to test their look before committing to purchase or even not buy at all as they lack security.

If they are from the latter group, they do not need to purchase as they can create their own contemporary look.

A luxury marketers what we need to check is whether this trend announces a change in the market in that the luxury market will not grow per se, but change its patterns…
or does this trend open more opportunities that will bring into the market people that otherwise would not be part of it.

We should not think, for one minute that this trend will not change internal patterns, though.

You say of this article...

Bookmark and Share

Can we do mail order luxury?

Isaac Mostovicz writes...

Experian’s annual poll of shoppers reveals that residents of Barnes, a leafy London inner suburb, now spend an average of £150 a year on mail order goods.

From a Press Association article:

Experian said the typical home shopper was now a wealthy, busy consumer who liked the convenience of buying “aspirational, lifestyle” items from mail order catalogues.

Shoppers in Barnes fell into the “cultural leadership” group of consumers who were mainly well-to-do professionals living in exclusive suburbs in traditional family units, the report said.

Described as “assured, secure and very discriminating”, they spent their wealth carefully on understated, classic goods and services and had little interest in the “brasher aspects of contemporary consumer culture”.

As home shopping has moved upmarket, wealthy consumers have flocked to internet and catalogue shops in order to avoid having to prolong their working day by spending time shopping. As commuters, they prefer not to stay in central London after work to shop, and, given their professional status, are unlikely to take formal lunch breaks.

Of course, this scenario isn’t unique to London, and so we can ask the more general question – how can the luxury retailer reach the people who don’t shop during the week, and who would probably prefer to stay at home at the weekend? Online and catalogue shopping might seem the obvious answer, but the Experian report implies that luxury items aren’t in the average Barnes resident’s online shopping basket.

So much of the luxury purchasing experience depends on touch, taste and smell – olifactory components simply impossible to recreate outside of a physical shop – that it is questionable whether online shopping will replace the high street as the preferred purchasing mode entirely. Nevertheless, the growing demand for ‘masstige’ products means that consumers will increasingly turn to the internet in search of lower prices.

The dilemma for luxury retailers, then, is this – do I sacrifice some of my physical customer experience in order to better serve the distance buyers? Or am I confident that my customers appreciate being able to touch, taste or smell my products, and so will always come to see me, even if it means getting a later train home or skipping lunch?

You say of this article...

Bookmark and Share