What is in a brand name? For luxury brands, it evokes a brand experience. Without it, brands will not be able to gain die-hard fans and build an empire. Consumers are shifting their behaviors, however, and increasingly inclining towards digital channels. And brands who do not take the effort to engage them digitally may become irrelevant quickly.
This is one of key conclusions that a recent Forrester report. Titled “Luxury Brands Must Chase Digitally Savvy Global Luxury Shoppers”, the report noted that luxury consumers around the globe are becoming more digitally engaged than their mainstream counterparts. They are very comfortable with new technology, social media and shopping across different touchpoints, both digital and in-store.
Despite this, the report noted that luxury brands seem to be “either oblivious or paralyzed”. Many brands seem to take a “slow pace” when investing in and strengthening their digital capabilities.
The lack of digital attention is allowing mainstream competitors to gain market share. The report cited online luxury powerhouse Net-a-Porter, boutique marketplace Farfetch and luxury department store Neiman Marcus are brands that exploiting this gap in expectations.
“What they know, and what many luxury brands don’t, is that if mainstream consumer expectations of digital shopping experiences are high, luxury consumers’ expectations are a step beyond again,” the report noted.
According to the report, luxury shoppers are predominantly super-shoppers. Many are comfortable in researching and buying products and services online or on their mobiles. Mobile devices are also becoming a key touchpoint, especially for online adults in Europe, US and metropolitan China.
Luxury shoppers also like new technology, and always seeking to experiment with new digital experiences and services. This is especially prevalent among adult metropolitan Chinese luxury buyers.
Lastly, they are socially engaged. It is a characteristic that brands like Coach have monetized, using shoppable photo tags in US and sales via WeChat in China.
To compete and remain relevant, the report advised luxury brands to create mobile tools and experience. Luxury brands need to stop looking at mobile devices as a channel and start viewing them as a touchpoint.
Luxury brands also need to improve their social media game. The report noted that 73% of Chinese luxury buyers converse with their brands over social media on a weekly basis. This is driving brands like Burberry, Longchamp and Swarovski to improve their social media engagement and convert potential interest.
Lastly, luxury brands need to explore partnerships with mobile savvier companies to create unique shopping experiences. The report noted that Kering’s joint venture with Yoox Net-a-Porter Group (YNAP) helped its smaller brands to quickly build online flagship stores. Gucci inked a deal with Farfetch to support a 90-minute delivery service for customers across 10 global cities. Cartier partnered with Net-a-Porter to develop a temporary online pop-up shop for the launch of its Panthère watch.
If luxury brands do not embrace digital and offer better online experience, they will risk becoming irrelevant or outmaneuvered by rival brands.