The luxury market is growing year on year. The number of luxury consumers is at an all time high of 380 million, which, according to Boston Consulting Group will reach 440 million by 2020. With this in mind it comes as no surprise that the UK’s luxury market is worth £6.6 billion and is expected to double within the next 3 years. The luxury market in the UK attracts consumers from all over the world, in particular, China, Russia and the UAE. Statistics from Visit Britain in 2014 show that overall in 2013 international visitors spent £21.0 billion in the UK. This included 196,000 visitors from China who spent a total of £492 million on luxury shopping and £527 million being spent by families from the Middle East. Arab shoppers spend approximately 4.5 million a day in UK, but they are biggest spenders worldwide.
This data shows how vital it is for luxury retailers to fully embrace digital marketing so their brands will reach these consumers, prompting them to travel thousands of miles to buy their products.
Before completing their purchases, a study by Global Blue in 2013, found that 90% of luxury buyers from China plan their purchases prior to travel. Visitors from Brazil and Russia have also been found to carry out the most research, followed by the US, Germany, England, France and Italy where more than two-thirds research online before making a purchase. Japanese luxury shoppers closely follow them where half conduct online research (study carried out by Google and IPSOS in 2013). With easy access to connected devices, online research is generally just the start. Social networking and watching online videos are considered before purchase as well as reading reviews, blogs and forums. In light of all the actions carried out via digital medium it may come as a surprise that only 7-19% of purchases are made online compared to 81-93% of luxury purchases made in store. This is most likely due to buyers preferring to touch and feel a product, as well as concerns that they may be sold a counterfeit item.
Though the majority of sale transactions are carried out in-store, shoppers are heavily reliant on digital devices to help them decide on what to buy, with an average luxury shopper owning 3.1 connected devices. Therefore, luxury retailers had to rethink their methods of engaging and enticing customers.
Online luxury fashion retailer Net-a-Porter has launched its own web magazine ‘The Edit’ along with a TV station, ‘Net-a-Porter TV’ for Google TV – a platform to watch ‘shop-able’ videos featuring products which can be viewed in detail before purchase. Initiatives like this are highly influential on the average luxury consumer.
For example, in June 2013, Burberry launched a new interactive campaign – Burberry Kisses. This campaign saw Burberry partnering with Google to send a virtual kiss to anyone in the world. Using facial recognition technology to detect the outline of a user’s lips through their webcam, this initiative combines technology with human emotion. With Google quoting statistics such as 253k+ search results for ‘Burberry Kisses’ on Google.com and 13k+ cities sending a kiss within the first 10 days, there is no denying that this was a successful campaign.
Estée Lauder is also a brand that has excelled in its digital marketing with the launch of several interactive campaigns. 2013 saw the luxury brand launch ‘Beauty of Night’. This campaign aimed to unite women across the world through the exchange of personal messages concerning their night-time regimes. After a connection had been made between two women which, according to the Estée Lauder website, was represented visually by a beam of light across a globe, the pair would receive a special offer for a sample of the Estée Lauder night repair cream. Another on in 2014, Estée Lauder promoted its Pure Colour Envy Sculpting Lipstick with two online features. Firstly, a short film in which a woman is sat on a vintage train with several beauty products in front of her. Words such as ‘Desire’, ‘Envy’, ‘Intrigue’ and ‘Power’ appear on the screen before the film ends with the word ‘Intrigued?’ and an option to continue the story. This then leads on to two other short films, each with an alternative ending. Estée Lauder also introduced an interactive look-book that provided users with tips on how to apply eye shadow using their eye shadow palettes. And a Pure Colour Envy Sculpting Lipstick in a complementary colour accompanied each eye shadow palette.
With the constant need to attract more consumers from all over the world, it is essential for luxury retailers to promote their brands using a variety of digital campaigns. Though the majority of sales do occur in the shop itself, these digital campaigns will lead to better brand awareness, which will generally prompt users into research of the brand and subsequently increase sales.