3 Trends Luxury Brands Must Consider in 2017
Luxury brands have understandably maintained tight control over their messaging and brand identities. In an industry largely defined by traditional relationships, and the cultivated quality of products and services, luxury brands have been more gradual in the adoption of emerging consumer technology and social platforms. For this reason, monitoring the luxury vertical can be a good indicator of the maturity of various trends. Today, consumer behaviors are being disrupted by mobile devices and a desire for more personalized brand experiences. As we near the end of this year, and look forward to 2017 and beyond, there are three connected trends we believe are reaching a critical inflection point for luxury brands:
Increased Channel Fragmentation
Perhaps unsurprisingly, luxury brands have targeted their consumers through traditional media channels, with print still commanding a remarkable 60% of advertising spend for high luxury brands according to Zenith’s Advertising Expenditure Forecast. While print is unlikely to diminish in the near term, more brands are recognizing the explosion of relevant channels as both a challenge and an opportunity to better engage new and existing audiences. For this reason, according to Zenith, a whopping 97% of overall growth in ad spend over the next two years for this vertical will be attributed to digital channels. With such pervasive growth in platform adoption, smart brands recognize the need to go where the audience lives, which increasingly means engaging them across several differing touchpoints.
Pressure from the “Content Crunch”
The introduction of additional channels into luxury brands’ marketing ecosystem also increases the need for high-quality, personalized content at scale. We call this the “content crunch,” and like all other consumer verticals, luxury is feeling the pressure to perform. As consumer preferences become more sophisticated and personalized, brands must do a better job of creating experiences that resonate. Otherwise, they risk their audience shifting focus to competitors, or having communication turned off entirely through ad-blocking technology. According to research by eMarketer, 69.8 million consumers in the US alone are projected to use an ad-blocker this year, up 34.4% from 2015. While this has scared many advertisers in all verticals, we believe it to be a fantastic opportunity for brands to do a better job of creating marketing experiences.
Consumer Involvement in Marketing
So, how can you solve these challenges? Creating personalized content that engages all audiences at scale is exorbitantly expensive, resource-intensive, and difficult to manage. While wanting to maintain control of brand narrative, many luxury marketers are also opening up dialogue with consumers and involving them in the marketing process. The convergence of improved mobile cameras, proliferation of visual networks like Instagram, and consumer preferences favoring authentic, user-generated content is driving more luxury brands to adopt the notion of “consumer as creator” in broader strategy. On Instagram alone, for example, there are over 500 million users creating more than 95 million photos daily on the platform. Certainly, brands are finding value from such an enormous media population. According to a survey by Worldwide Business Research, and sponsored by Olapic, 90% of retail leaders using consumer content in campaigns are seeing “measurably positive results.”
At Olapic, we’re very excited to be sponsoring the upcoming Luxury Interactive event in New York City. If you’ll be in attendance, please check out our panel, “Not Just For Your Entertainment: Hard Social Selling.” In the session, I’ll be joined by leaders at Four Seasons and TACORI to discuss techniques for turning social content into revenue opportunities.