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Tuesday

17

Jul 2012

A few weeks ago Dave & I were invited to Hong Kong for deliver our first corporate training in that country (surprisingly it was my first trip to Hong Kong after living in the region for 16 years!) and the theme was how can luxury brands leverage on digital advertising?

Now I am not a big consumer of luxury brands simply because I can’t afford them at this juncture (perhaps I can contemplate buying a Patek Philippe if and when we are able to make a successful exit from Happy Marketer although Rachit’s vision is that we 3 partners should all buy condominiums!) but we definitely study some of the best practices adopted by global luxury brands like Cartier, Rolex, Lexus, Mercedez, Chanel et.al capitalize on new media.

We essentially looked at a few categorizes like automobiles, timepieces, perfumes, apparel & alcohol and studied brands and the nature of their campaigns and extracted 11 best practices across them.

Before we explore the best practices, we realized something unique about luxury brands unlike mass market brands that usually plan to multicast or broadcast their messages to pretty much every consumer if possible. Most of these luxury brands have to strike a balance in the accessibility & exclusivity continuum.

It is a beautiful paradox where the brands want everyone to know and aspire about them yet create exclusivity for their high-end preferred customers. They want to cut their cake and have it too! We began exploring if digital indeed can offer that advantage and we realized that if handled well, it actually can.

The Internet is found on the principles of accessibility & democracy and many luxury brands leverage on this aspect to spread the brand’s dream and mythology to a large consumer base. Digital’s role in this case is to spread the aspiration, dream & desire to the so-called ‘have-nots’ and potential future consumers.

At the same time, digital media also allows luxury brands to target their niche affluent audiences to offer them exclusive content and services, given its ability to target far more precisely than many offline broadcast channels like print, radio, TV, outdoor etc as well as its ability to provide analytics to measure the efficacy of a campaign.

Having established digital’s dual role in marketing luxury brands, here are a compilation of 11 best practices luxury brands implement to maximize their investments on digital:

1. Communicate the dream of the luxury brand

As discussed above, the idea here is to leverage on digital’s growing global access to relate the brand’s story to both current and prospective consumers. Luxury brands are all about dreams, aspiration, status and lifestyles and digital media should be used to build the brand’s image and equity to make it desirable for one and all. One thing to note here though is that many luxury brands try and replicate their in-store experience online without paying much attention to the differing consumer behaviour online vis-a-viz time, device and mode of access.

Hermes does a good job at this through its unique mosaic tile-based website which displays its different products in interesting pastel animated shades. It allows visitors to either find specific country-wise Hermes stores or travel the world of Hermes. It feels more like a art gallery!

2. Facilitate & encourage social sharing and crowd sourcing

The beauty of social media is not just limited to its reach and virality but its ability to provide a platform for discussions, debates, conversations and tapping on to a million brains to capture their wisdom & ideas.

Brands can and should leverage on platforms like the Facebook social reader, which help in spreading branded content virally, something a lot of the global publishers such as the Washington Post, Yahoo, HuffingtonPost etc. leverage on. Likewise many brands have their own branded tablet applications with fantastic multimedia & interactive content and many partner with popular platforms like Flipboard. While brands share, they must build in a habit to listen and encourage their fans and followers to contribute to ideas and provide feedback. An inclusive approach will go a long way in building the brand’s equity.

3. Digital as a piece of the larger puzzle

As digital practitioners, we are the first to admit that digital is no magical wand that will solve a marketer’s challenge overnight. It is a fairly nascent medium and if advertising spends are anything to go by in Singapore, only 8% of last year’s digital advertising was allocated to digital (although it is growing at a staggering pace). This definitely indicates the power, reach and impact of traditional media that has a very long and successful track record. The most successful luxury digital campaigns are fully integrated with large campaigns and is in alignment with the brand values and the corporate objectives.

Digital can be used to support all other touch points including events, marketing campaigns, customer service initiatives etc. Interestingly given its capability to cost-effectively archive data, it can also help expose the connoisseurs of luxury brands to past initiatives that people may have missed or not been privy to. It can act as a wonderful alternate source of fulfilment.

Cartier had recently launched its Experience Cartier web initiative which allowed exclusive customers a chance to witness and discover earmarked, flagship Cartier products from the last 100 years through a video-based microsite.

4. Tell a great story

We all love telling, sharing & listening to stories don’t we? I think it should be added as the 8th characteristic of life. And this art has a huge impact on the discipline of marketing as well, especially in the era of inbound marketing where the dogma of “tell & sell” is falling flat gradually. Especially in the luxury category where close knit affluent, elite groups share and boast about their acquisitions and experiences, word of mouth plays a critical role. The more the brand tells its brand story in an appealing and unique manner, the higher the chances of it sparking a real social conversation.

Chanel No. 5 ‘Train de Nuit’ film was one such fascinating story starring Audrey Tautou and Travis Davenport – a tale of chance and fate, exploring the brief encounter between a man and woman travelling to Istanbul on the Orient Express night train. Two destinies were brought together by a scent like no other. This short film was promoted just like any other Hollywood flick through a microsite and digital banner campaigns to go with it.

Likewise Louis Vuitton’s Journey Beyond campaign, to mark the 40th anniversary of Apollo 11s landing on the moon, told a fascinating story showcasing pioneering NASA astronauts Jim Lovell, Buzz Aldrin and Sally Ride.

5. Be a cultural tastemaker

In the real world a lot of luxury brands associate themselves with refine, elite and sophisticated cultures and related activities. Likewise digital can be leveraged on to elevate the brand’s luxury status by acting as an arbitrator of taste, recognizing and guiding consumers to cultural excellence.

Together, the Sundance Channel and GREY GOOSE Entertainment have created an award winning original series that takes an intimate look at some of the world’s most extraordinary innovators and standouts. Iconoclasts pairs risk-takers from film, music, science, sport, business and the culinary arts and explores their experiences and inspirations through an unique lens.

 

In addition to arts & culture, brands can also take part in the global community by recognizing pioneers for global good. Rolex sponsors the global Rolex Awards that has honoured extraordinary individuals who possess the courage and conviction to take on major challenges that impact human life, wildlife & nature and cultural heritage.

6. Provide a trusted guide to lifestyle enhancement

High-end luxury brands are all about lifestyle and hence there is a huge opportunity for brands to carve their own space by being the trusted, preferred source for best-in-class content for a particular kind of lifestyle. Brands need to create unique content that grabs people’s attention either in hours or through relevant content & sponsorship partners. Here too it is critical for luxury brands to remember that simply mirroring their offline content efforts won’t do justice to their online efforts.

  Gucci created a mobile application called Gucci live which provided a lot of information and local content about topics pertaining to
music, art & culture in New York. It had nothing to do with Gucci products but merely an intelligent and creative way to associate the
brand identity with a particular genre and style of life.

  7. Use history as a way to push forward

Luxury brands frequently illustrate and share the brand’s history, heritage and story to help contribute to the sense of craft. They also
draw parallels to historic moments outside of the brand to help articulate the points of view and opinion. Sometimes providing customers with a story about what makes the brand special makes the purchase decision more compelling.

Many luxury brands have invested in digital campaigns to showcase their heritage or their association with historic moments. Lamborghini has a digital museum with a fantastic gallery of all the models ever produced – any automobile fan would be proud to take a trip down memory lane through such an avenue.

One of my personal favourites is the brand Jack Daniels which has its own timeline where they share their brand’s history, facts & figures and a lot of mystical details about Mr. JD! They call it their “Story of Independence”.

8. Encourage the spirit of competition

Like story-telling, competition is in our bloods and we all love a good healthy competition; perhaps more so in the crowd of successful, elite, affluent people? A lot of luxury brands leverage the camaraderie of sport and the excitement & engagement that the spirit of competition generates. The digital channel can be used to create contests and events that can very well tie into real world sporting events, contests to products to add more gravitas.

Lexus drove this fantastic digital competition called the Lexus Drive HS Sweepstakes and Contest, where in participants had to write an essay describing why he/she should be chosen to drive a Lexus for a year and the best entry won a chance to rent the automobile for 12 months. This competition sparked a lot of social conversations, virtually and in real life and this led to a surge in participation.

9. Talk to the younger luxury consumers

For any organization and brand it is imperative that they maintain a long term strategy in perspective. Bearing this in mind, luxury brands need a plan in place to engage the yuppies, their current customer’s children, especially the 3rd generation royals. This segment can easily be nurtured and cultivated via digital given that that they are ‘born digital’ and many of them are admitted into Facebook before seeking admissions in school!

Luxury brands typically use two approaches to get these guys onto the hook – they either have dedicated digital channels only for the youth or they leverage on social media to carry out a two way conversation. Mercedez Benz created a social media network called Generation Benz only for the kids of their existing customers, where the young elite could connect with each other globally and exchange notes. Burberry uses its Facebook page primarily as a means to connect to its young customers; on some occasions they even launch their seasonal collections on the digital world before a real life launch on the ramp.

10. Offer incomparable services

Time is money and the affluent are usually willing to buy time in exchange for high quality service and lifestyle experience. This is another area where digital can make a mark as means of providing exclusive, customized, private, frequent & immediate customer service.

Astley Clarke is a fine example of this. As a talented internet entrepreneur, Bec was fuelled by her belief that there was a lack of imaginatively designed, fine jewellery available for the new generation of luxury customers. Through the eCommerce platform she provides high-end customized fine jewellery to the rich & famous, who can save time and shop online at their convenience.

11. Use digital to convey exclusivity

As discussed at the beginning of this blog, digital can help luxury brands strike a balance across the accessibility-exclusivity continuum. Brands can invest in closed-door, invite-only online communities and offer premium paid models to affluent consumers. Lexus has a “Focus on the Driver” microsite portal dedicated for their existing consumers only – it offers a lot of interesting Lexus and automobile related content, trivia and service related information.

 

Bonus Point 12. Make them feel like ‘Royalty’ through digital customer service & loyalty

Affluent consumers in search of an unforgettable customer experience have historically been able to trust well-known luxury brands to provide just that.  Luxury icons including the Ritz-Carlton, Four Seasons, Lexus, Porsche, Louis Vuitton, Chanel, Nordstrom and Tiffany & Co have consistently been customer service mainstays. It is now time that these brands take this luxurious customer service experience digital, especially as data (a survey by Fidelity Investments) suggests that 85% of millionaires use text messaging, smart phone applications and social media – an indication that this demographic is wired across the spectrum of channels offering online and mobile content and customer interaction. Some brands have already taken the cue and are reinventing their luxury customer experience through digital and some of the pioneers include Jimmy Choo, Burberry, Coach, Louis Vuitton and Kate Spade through interesting customer loyalty and engagement programmes through visually appealing iPad and iPhone applications.

Hope you guys liked the blogpost. Please do ‘Like’ & ‘Share’ it as Rachit assures me that if I secure 10,000 Likes, I might get the Patek Philippe for my next birthday itself;)

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