With the NET-A-PORTER and Yoox merger, all luxury brands need to quickly embrace new e-commerce strategies and develop a unique social media experience. An interesting pivot that needs to be quickly mastered by luxury brands, in a very competitive market. That’s the sense of this takeaway report: opening the club while closing down the curtains to keep exclusivity and build up new value proposals.
From anti-social behaviors to re-generate exclusivity, to new approaches regarding customers’ journeys, the opportunity is big for luxury brands.
“Word-of-mouth’s impact is almost 20% of sales in higher price-point categories.” (WOMMA, November 2014).
What was previously perceived as a sort of useless territory to reach very demanding and high profile customers is now one of the main battlefields for the luxury industry. Word-of-mouth which is now accelerated through digital channels, basically means to be literally everywhere and at any time. Chanel got it right, releasing an agenda for e-commerce, with 2016 as their business objective.
New customers’ journeys
Luxury marketing used to be pretty “simple” when elaborated: high-profile customers were to be brought forward into bespoke retail experience. Details mattered, as real-life service could not suffer any bug in the journey.
But now, digital revolution changed the entry-points to retail, therefore the social function attributed to the brick and mortar temple; some very sophisticated and well-travelled customers already know what they want and just want to pick up a product they’ve seen online – they no longer accept that an item is not available straight away. Other customers are more digital wanderers, who only discovered a tiny part of the brand; the classic Kenzo Tiger sweatshirt is a very good example: there were queues of customers who were not initially in the “luxury” segment but happened to regroup and bring a new light to Kenzo. Now plugged into the “Kenzodiac” experiment, the brand starts to uplift its new customers into a more subtle and comprehensive understanding of the brand.
“Along with each horoscope is a product that relates to the advice included in the text.Those under the Sagittarius sign are told they need to express their feelings, and stop worrying so much about other people’s expectations of them, so Kenzo suggests a tiger sweatshirt to “roar your heart out.”
In the meantime, traditional high-profile customers don’t want to mix with the crowd, while embracing new ways of consuming luxury through visual networks like Instagram. This high-profile customer does not hesitate to buy from the high street – wearing a pair of Converse while holding a Chloé bag is the new normal.
Digital interfaces totally broke the traditional path to purchase; the smartest brands like Hermès created a whole new tone of voice to face this challenge to again become the information-maker instead of suffering from this dilution through billions of new digital touch-points.
Growing with new communities of luxury customers
What’s even more interesting is that in some less mature markets, customers discovered luxury universes first and foremost through their favorite social networks – like Weibo, but also through celebrities’ pages and on-going “daily-telling.” In order to grow with these thirsty customers, luxury brands now need to adapt: social channels are now no longer an accessory in the marketing mix but the key hub of influence.