What luxury brands must do to succeed in the digital age
The “right” digital strategy differs for every luxury brand, but the essential elements are the same: a strong mobile presence, a selective approach to social media and a tight focus on carefully chosen metrics, says a report by McKinsey.
Among luxury companies, conventional wisdom used to be that participation in e-commerce – and, in particular, selling through multibrand retail websites – was only for lower and middle ranges of products.
The pervasive belief was that luxury shoppers, with their discriminating taste and preference for high-priced goods, wouldn’t buy expensive things online; they would always opt for the personalised customer service and tactile shopping experience that monobrand brick-and-mortar stores provide.
That thinking has evolved in recent years, says the report. The success of ventures such as Net-A-Porter has shown that consumers are indeed willing to buy luxury products online and at undiscounted prices.
Given the undeniable and growing power of the digital universe, all luxury brands must think hard about their digital presence.
Rules are changing
The “right” digital strategy differs for every brand, but what’s certain is that it’s no longer just about a beautifully designed and user-friendly website or effective banner ads.
The most successful luxury brands will be those that build a compelling mobile presence, engage and influence consumers through targeted use of social media, and focus on a carefully chosen set of digital-performance metrics.
Luxury brands with informative, easy-to-navigate sites optimised for mobile devices – as opposed to just standard websites designed for full-size computer screens – are therefore more likely to drive store traffic.
But brands shouldn’t rely exclusively on their own sites to promote their products to potential customers. Luxury shoppers are increasingly turning to product-oriented sources of information, such as the websites or mobile sites of multibrand retailers and department stores, so that they can easily compare products and prices, the report says.
Digital tools and technologies are revolutionising the luxury-goods industry and no luxury brand can afford to ignore them. Online sales – as well as the influence of mobile and social media on offline sales – will continue to grow rapidly, in both developed and emerging markets.
The most forward-looking companies are testing digital opportunities across their entire organisation, monitoring impact closely, and scaling up effective approaches quickly. All other luxury companies should follow their example or else risk falling far behind, concludes the report.
(This article first appeared on AMEinfo’s sister publication Gulf Marketing Review)