Consumers are no longer buying as before. A customer’s buying journey has changed. Luxury brands are struggling to grasp the new digital codes and tame the new ultra-connected generations. This new generation is Generation Y. It will have more purchasing power than that of its parents in 2020. What must luxury brands do to survive in the digital age?
These are 18-34 year olds (or even a little less, according to studies). It represented 2 billion of the world population in 2017. The Digital natives have grown up with the Internet and understand the world through digital. To attract them, luxury brands must adapt to the new means of communication used by this generation.
How to survive?
1. Experience before the product
To survive, brands must put experience before the product. When an individual makes a luxury purchase, it is not rational. It is based on the aesthetics and the affect of the product.
A brand that understands this is Rebecca Minkoff (a premium American ready-to-wear brand). She did everything to make her mark an experience in itself.
It starts with a connected store. Consumers can try items with an RFID tag (radio frequency identification), which will transmit the item code to the interactive cabin mirror and suggest other items that consumers may like. Its turnover has multiplied by 7 in a few months.
Then, during her spring 2017 fashion show in Los Angeles, she implemented the concept of see now buy now, a concept that allows you to directly buy the clothes offered during the parade. A real upheaval when we know the delays between the fashion shows and the marketing of the collections. A practice more and more used today by Burberry, Courrèges, Tommy Hilfiger… The parade of Minkoff proved to be an experience in its own right intended for generation Y. She scrolled influencers (including the international blogger Song of Style), proposed activities like Yoga sessions, manicures by the brand of varnish Essie, wine tastings.
It may still seem inconceivable for some luxury brands, but that’s what works! To seduce Generation Y, experience comes before the product.
2. Balance between heritage and new technologies
How to differentiate when all the brands are on the internet? How to keep your luxury brand DNA when you want to keep its exclusivity, its rarity, its know-how?
To adapt, luxury will be able to gain competitiveness through technological innovation.
Luxury can be defined by rare materials or specific know-how. Why couldn’t technology be one of these rare raw materials? Technological innovation will become a sought-after and exclusive raw material. An example in ready-to-wear with the marketing of smart clothes that keep body heat or connected watches. Hermès has partnered with Apple for one of its models.
3. The ultimate weapon: storytelling
Who hasn’t heard of content strategy or storytelling, the art of storytelling? A technique that allows you to offer content without disrupting the user experience and bypassing AdBlock (ad blocking).
Storytelling fits well with luxury brands, because they generally base their communication on the emotions and values of their brand. Two elements that are very difficult to transmit over the Internet!
When shopping online, everything the purchasing “ritual” in store is broken. Magic doesn’t work the same way. To overcome this, create content video will highlight brand identity. It is a format that is exploding and it is very suitable for telling the story of a brand, conveying emotions, making people dream. You can use YouTube, Facebook Videos or get instantaneous with Instagram or Snapchat stories.
Be careful, using mass communication channels does not mean losing your luxury brand DNA. Keeping your DNA means keeping the brand’s characteristics: way of speaking, visual identity (logo, color, etc.), history, etc.
Our brain retains better the information told through a story. According to Eric Briones, a specialist in generation Y and luxury brands, the brands that will survive will be “those that will share the best stories and experience in a way that will touch the masses”.
You know what you have to do!
4. Trust influencers
Digital allows you to create a relationship between the brand and the consumer, but above all, between consumers. There is an exchange relationship. He is no longer alone in his purchasing decision. Brands are now using intermediaries they no longer control such as bloggers and youtubers to communicate about their brand. We often talk about Social shopping, which demonstrates a generation addict to social networks and brands in the ever growing need for intermediaries.
In practice, collaborating with influencers who correspond to its brand identity can improve its notoriety, play on its branding (want to be more modern, create a positive feeling towards them …) or even increase sales.
5. Multichannel strategy
This is the most important point! When building a marketing strategy, one can decide to focus on various media.
We can invest (time or money) in owned media (the one we own, like a shop), in the paid media (the one we buy, such as advertising space) or in a earned media (the one you get from internet users). If luxury brands used to focus on the owned where the paid media today earned media becomes essential.
A great example with Chiara Ferragni, an internationally known Italian blogger. At her wedding, she wore a dress signed Dior. Results: 10,000 publications, 6.2 million reactions and a value in earned media (free advertising generated by Internet users) estimated at $ 4 million.
In summary, we value all communication channels. The path to buying a luxury product can range from an article worn by a blogger on Instagram, a purchase made online, a return to the store and customer follow-up via the Facebook Messenger application. Be present everywhere to support your client throughout their purchasing journey.
Digital: threat or opportunity?
Communication channels have changed and this terrifies luxury brands. They must appeal to a generation that will have more purchasing power than its parents in 2020 without losing its essence: exclusivity, rarity, know-how, high price …
Luxury feared that social networks were too accessible. With Instagram, you can maintain a certain distance. Brands must try to sell the dream, to be desirable. We must think we know them through social networks, that they are “almost” accessible. This nuance is crucial and determines the success or failure of good communication for a luxury brand on social networks.
The success of their digital transformation lies in their approach to digital. If they see this transformation as a opportunity and that they use the new communication channels with a good strategy, it can make all the difference.