With the NET-A-PORTER and Yoox merger, all luxury brands need to quickly embrace new e-commerce strategies and develop a unique social media experience. An interesting pivot that needs to be quickly mastered by luxury brands, in a very competitive market. That's the sense of this takeaway report: opening the club while closing down the curtains to keep exclusivity and build up new value proposals.
From anti-social behaviors to re-generate exclusivity, to new approaches regarding customers' journeys, the opportunity is big for luxury brands.
"Word-of-mouth's impact is almost 20% of sales in higher price-point categories." (WOMMA, November 2014).
What was previously perceived as a sort of useless territory to reach very demanding and high profile customers is now one of the main battlefields for the luxury industry. Word-of-mouth which is now accelerated through digital channels, basically means to be literally everywhere and at any time. Chanel got it right, releasing an agenda for e-commerce, with 2016 as their business objective.
New customers' journeys
Luxury marketing used to be pretty "simple" when elaborated: high-profile customers were to be brought forward into bespoke retail experience. Details mattered, as real-life service could not suffer any bug in the journey.
But now, digital revolution changed the entry-points to retail, therefore the social function attributed to the brick and mortar temple; some very sophisticated and well-travelled customers already know what they want and just want to pick up a product they've seen online - they no longer accept that an item is not available straight away. Other customers are more digital wanderers, who only discovered a tiny part of the brand; the classic Kenzo Tiger sweatshirt is a very good example: there were queues of customers who were not initially in the "luxury" segment but happened to regroup and bring a new light to Kenzo. Now plugged into the "Kenzodiac" experiment, the brand starts to uplift its new customers into a more subtle and comprehensive understanding of the brand.
In the meantime, traditional high-profile customers don't want to mix with the crowd, while embracing new ways of consuming luxury through visual networks like Instagram. This high-profile customer does not hesitate to buy from the high street - wearing a pair of Converse while holding a Chloé bag is the new normal.
Digital interfaces totally broke the traditional path to purchase; the smartest brands like Hermès created a whole new tone of voice to face this challenge to again become the information-maker instead of suffering from this dilution through billions of new digital touch-points.
Growing with new communities of luxury customers
What's even more interesting is that in some less mature markets, customers discovered luxury universes first and foremost through their favorite social networks - like Weibo, but also through celebrities' pages and on-going "daily-telling." In order to grow with these thirsty customers, luxury brands now need to adapt: social channels are now no longer an accessory in the marketing mix but the key hub of influence.