The world of luxury can almost always be boiled down to one thing: exclusivity. Sadly, both time and silence are now firmly rooted in that category thanks to the noisy, fast-paced nature of our digital world. But it is an understanding of digital that can truly unlock time and silence for both a luxury brand and its consumer set, thanks to the efficiencies and convenience it affords them.
And it’s time they started paying attention. While the luxury goods market is projected to grow by 2 to 3% across the next five years, the online luxury goods market is expected to grow by 20% in the same period. Suffice to say, luxury brands that aren’t embracing the opportunities along with the challenges will soon be steamrolled by those who skilfully use digital to their advantage.
So how do these luxury brands steeped in exclusivity and provenance deliver when it comes to the digital open platform that is changing on a daily basis?
As reported by the Wall Street Journal, the luxury industry spent over $1bn globally on digital mediums in 2016 – a 63% increase on 2013 – while spending on magazines declined by 8% over the same period. And yet there is still a disconnect between the amount of digital spend and its efficiencies for luxury brands. For example, online shopping destinations that have been translated from the high street – such as Selfridges, Harvey Nichols and Harrods – offer their customers websites that are just that, a translation, and not a natively digital development.
Digital activation, in its broadest sense, is the biggest problem for luxury brands. It tends to exist in a silo and stands aside from any business strategy thanks to an industry-wide wariness of digital. It’s the tendency to do things the ‘done’ way in luxury – creative in the front seat, regardless of efficiency.
What’s more, the ‘novelty effect’ is widespread among luxury brands. Augmented reality in flashy Koenigsegg cars, chatbots from Jaeger-LeCoultre watchmakers and ‘see now, buy now’ technologies of fashion week lore (Hilfiger and Ralph Lauren) have tended to serve luxury brands as nothingmore than cheap buzz, ensuring that they are seen as ‘relevant’.Here lies a paradox that can't be solved by simply throwing money at the problem.
It could all be worth it, however, as long as the brands in question were to craft and utilise the customer data derived from these opportunities afterwards. If marketing technologies can provide PR fodder to further enhance a luxury brand's profile across the industry, so too can it provide efficiencies that would otherwise be ignored. Suddenly, time and silence – ie total customer efficiency – are just a mouse clickaway.
It’s when these technologies are put to work that luxury brands can truly come into their own – enter the birth of a new beast to rival department stores of old. Online luxury ‘markets’ such as Nordstrom and Lyst have cracked the customer code. Luxury brands in and of themselves, they don’t lean on the brands they stock but deliver luxury levels of personalisation that knock on the door of truly built-in eCRM. Touchpoints throughout the digital customer journey, including but not limited to e-commerce, martech and social, are plugged-in to ensure a data-centric path to preference. And it’s thanks to this investment in eCRM that has led to a 50% increase in revenue over the past five years.
We will soon see customers expecting a total experience, as hand-crafted as the products they’re buying into, as well as luxury levels of personalisation. The luxury customer will revel in the post-purchase glow and the convenience of a truly curated digital experience, all together enhanced by programmatic and algorithmic digital communications. It is only these data-led campaigns that will be able to maintain the highest levels of relevancy throughout the customer journey.
This e-smart technology will enable time-saving convenience and the more relevant digital customer journeys will afford those luxury customers the level of silence they expect in exchange for busy high streets. So Tom Ford may indeed be right: time and silence remain the most luxurious things today, but it is digital that can help unlock these for the modern luxury consumer.
Ally Waring is strategist at Rapp UK.
This article was originally published in The Drum Network luxury special. You can get your hands on a copy here. To be featured in the next special focused on the charity sector, please contact firstname.lastname@example.org.