In the past, luxury brands traditionally reached customers through print advertisements. With the rise of digital marketing, however, the way luxury brands interact and engage with customers has evolved.
For example, the number of times that consumers visit a luxury car dealership before making a purchase has diminished. When people finally do reach the parking lot, they are already ready for a test drive. There is no browsing the lot – all the research begins and ends online. It is the same for many other luxury goods as well.
Unfortunately there is no such thing as a single, be-all-end-all digital strategy when it comes to luxury marketing, as every product and target audience is different. There are, however, a handful of tried-and-proven strategies that are successfully driving sales in the luxury market.
Defining the modern luxury customer
For years, luxury brands have made the mistake of believing that their ideal customer was a 45-year old female with a net-worth of more than $1 million. According to a recent study, however, 57.5% of luxury spenders are male, and of Asian or Middle Eastern decent.
How customers define luxury has also evolved:
- 75% of customers say superior quality is a crucial attribute
- 54% believe the design of the brand is the most important trait
- 47% state that customer service is a deciding factor
Unfortunately, many luxury brands have yet to recognize these changes. This has created a severe disconnect with their target customer base, since they aren’t targeting the correct demographics or conveying their value propositions properly. This explains why some lose up to 50% of their top customers on an annual basis.
Understanding and optimizing the path to purchase
The path to purchase is a term used to describe the steps a luxury shopper takes before buying a particular product. There are four parts of the luxury customer journey, according to Consumer Technology, which include:
- Awareness, interest, demand
- Advice, comparison, research
- Purchase, order, delivery
- Experience, review, promotion
Successful luxury brands optimize their marketing efforts at each stage of this process, since failure to do so will often result in lost customers. And because 52 percent of luxury customers do research online before making a purchase – or even going shopping – many luxury brands are investing heavily in their digital marketing efforts to try and boost customer retention rates.
The role of digital marketing
Presently, only four percent of luxury sales come from e-commerce. It is important to note, however, that this number only represents a single opportunity when it comes to digital marketing. An additional 40 percent of luxury purchases are influenced by the digital experiences a consumer has. This includes online research for a product that is ultimately purchased offline and social media “buzz” that ultimately results in a purchase in the store.
Everyone knows that digital marketing is an umbrella term that covers everything from SEO to PPC. And while the best digital marketing campaigns are multi-faceted in their approach, there are 2 areas in particular that are “hot” right now in the luxury market: mobile and social media.
To most consumers, the brand itself is the luxury experience. Luxury customers prefer elegant stores, which means that this same level of elegance must be transferred to the online experience as well, which is no easy feat. And unfortunately, some brands have no ability to do so.
The luxury brands that are experiencing the most success have created a compelling mobile website, while influencing and engaging consumers via targeted social media. The rise of photo sharing sites, like Pinterest and Instagram, and video sharing sites, like Youtube and Facebook, now makes it easier than ever for luxury brands to showcase their products in the best possible light, as well as engage with both customers and potential customers in a much more personal manner.
What’s more, social media is used widely by luxury shoppers to share purchases they have made, which creates moments that encourage others to do the same. Savvy marketers in the luxury space understand this dynamic and embrace such viral reach, while continuously engaging with their existing customers and encouraging them to return sometime in the future to make another purchase.
Taking action for results
Bulk emails, newsletters and other impersonal forms of communication are not very effective when trying to reach luxury shoppers, which means that luxury brands have to “step up” their digital strategy and target customers where they are – online. Building a mobile site, catering to what they care about and want to know, and being social will encourage more luxury shoppers to make purchases both online and offline.