Will Digital Marketing Bring New Consumers to Luxury Brands?

Discussion
Mar 08, 2013

A new survey from Luxury Interactive and ShopIgniter shows that 63 percent of luxury marketers predict that by 2015 digital marketing will be the most important form of marketing for their brands — more important than traditional print, TV or loyalty programs.

The leading business driver among luxury brand marketers for digital investments like social media is new customer acquisition.

"While acquiring new customers in social media is logical given the demographics it draws, luxury brands need to develop strategies built on extending their brand promise, inviting fans in and providing the exclusivity they expect," said Marko Muellner, VP marketing at ShopIgniter, in a statement. "Our experience shows that roughly half of a brand’s social fans are not in the house file, which means there is ample opportunity to not only introduce the brand to a new customer, but also find opportunities to drive product discovery, generate new customer insight and move prospects closer to a purchase decision."

For the current year, the survey of more than 100 marketers at global luxury brands found 85 percent will increase their digital spend and 72 percent will increase spending on social media marketing.

The survey also found:

  • Seventy-six percent of respondents say that if they could manage only one social media account, it would be Facebook.
  • Ninety-five percent say they actively engage customers on Facebook, compared to 85 percent on Twitter and 60 percent on Pinterest.
  • While three-quarters of respondents allocate less than 20 percent of their digital budget to social, 50 percent report that the leading budget line-item is people-oriented, including expenditures for in-house and agency  resources. People and agencies were also reported as the leading mobile budget line-item.
  • Posting product imagery (81 percent), using video to engage fans and followers (75 percent) and seeding new product launches (60 percent) were cited as the most relied upon marketing tactics in social media.

 

What do you think of digital and social media’s strengths and weaknesses as a customer acquisition tool? How does the social media opportunity for luxury differ from other segments?

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11 Comments on "Will Digital Marketing Bring New Consumers to Luxury Brands?"


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Joan Treistman
Guest
8 years 7 months ago

What this article does not mention is the relationship between sales and social media engagement. I am reminded of that beautiful Bette Midler song, “From A distance.” I’d like to hear more about how social media is influencing purchases. Marketing buzz about digital media is different than consumer buzz about digital media advocacy.

Max Goldberg
Guest
8 years 7 months ago

Digital and social are two of many tools that marketers have at their disposal. Brands would be wise to consider all possibilities before investing advertising dollars.

The good news for digital agencies is that the brands surveyed are spending less than 20% of their digital budgets on social. What is not stated is the size of those current digital budgets.

Digital marketing is still in its infancy. Brands are searching for a holy grail for digital, but have yet to find it. Even without a guidebook, brands need to experiment with digital to find out what works and what doesn’t. Fortunately, the cost of doing this is relatively inexpensive.

Ralph Jacobson
Guest
8 years 7 months ago

There are CPG companies that will spend more on specifically digital marketing (not their whole marketing spend) than their entire IT budget by 2015. This is the primary vehicle for creating awareness for and building value of brands for the foreseeable future.

Luxury shoppers are just as socially savvy as other shoppers. I see no differentiation in the huge marketplace opportunity there.

Gordon Arnold
Guest
8 years 7 months ago
The focus here is luxury brands and the use of e-commerce marketing tools to exploit the internet’s potential for repeat and new business. Luxury brands have one thing in common in that they require greater front end expenditures from the consumer when measured and price compared to the market standards. The investment is established as practical from various consumer perspectives usually tied to the prestige and gratification of ownership or long term security through investment. In this information age and the purchase complexities of the various demographics in play success depends on providing detailed information to support the move from practical to promised land. The differences in relationship values used to provide feature and benefit information to the four primary target generations (Boomers, Gen X, Gen Y, and Gen M) can require a completely separate presentation format, content and vernacular for the purpose of extracting or building the desired effect(s). This is where I see marketing management being stifled in the attempt to get “digital” attention from the audience. Social media offers marketing managers an… Read more »
Craig Sundstrom
Guest
8 years 7 months ago

Oh boy, what to do with this one? Given the two stereotypes—at least MY stereotypes—of luxury brands as primarily appealing to (over) privileged people, detached from the real world, and with too much money and too little to do, and (hardcore) social media users also being detached from the real world, and with too much time and too little to do, this seems like a marriage made in—perhaps not Heaven—but a very natural kind of marketing Hell. Will Tiff really buy Trevor his 4th Rolex just ‘cuz she saw he “friended” the FB page? Fer sure, bro!

Martin Mehalchin
Guest
Martin Mehalchin
8 years 7 months ago

As we have written about before, retailers and brands should look at social as building the relationship and customer loyalty and not as a product-first transactional channel. So, it’s discouraging to see the stats at the end of the article showing posting of product imagery as the #1 tactic.

Retailers, especially luxury retailers, should share their category expertise, their unique store experience, special events, and anything else that shows they “know” their customer. But most importantly they should ask their customers what they think, listen to them, and respond. It should be a conversation, not a billboard.

Michael Greenberg
Guest
Michael Greenberg
8 years 7 months ago

In general, luxury has a smaller target audience, with higher potential with each customer. It makes business sense to invest in areas that help identify and engage that smaller audience.
Digital and social has the ability to reach those customers directly, which is great. More importantly, they can contribute to a more holistic understanding of each customer’s wants and needs with will help with contextual and individualized interactions down the road.

Matthew Keylock
Guest
Matthew Keylock
8 years 7 months ago

Burberry seems to have gone big in digital and social media: from being a relatively early adopter of Twitter, to the more recent interactive runway show in London.

As I understand it, this recent event was shared digitally and socially, allowing customers to purchase products and even personalize them, then have them delivered before they even hit stores.

Clearly some customer benefits to being digitally engaged with the brand, and Burberry seem to be sticking with this strategy, so I presume it is working for them….

Jerry Gelsomino
Guest
8 years 7 months ago

Digital and social media platforms have huge potential as customer acquisition tools. But I still have reservations for luxury items. Part of the allure of shopping for luxury goods is the VIP treatment that goes along with it. Can the luxury online experience be more elitest that the mass online experience?

Mike Osorio
Guest
Mike Osorio
8 years 7 months ago

Effective use of social media in the luxury space is about extending the brand experience online. Burberry is the current champion of this as they have integrated digital into all aspects of the customer journey. Others are finding their way, but the winners are clearly those that don’t try to overreach, but rather create a seamless experience throughout every touchpoint—in store, online and across social media.

Particularly in secondary and emerging markets, that may lack local retail outlets, digital and social are the entry points into the luxury experience. The brands and the retailers are getting better and better at providing emotive, interesting stories to engage potential luxury consumers. A very exciting time!

Bisen Vikas
Guest
Bisen Vikas
8 years 6 months ago

I think digital and social media could be definitely a great tool to showcase product and services, especially luxury product, as it not consumable at the point of sale. But at the same time we can ignore the conventional methods of promotion as no matter how ubiquitous internet in nature is, access of the internet is still limited to group of customer.

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