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Research: Luxury Brands Are Beginning to Embrace Customer Content

In order to succeed, luxury brands must reflect a specific and aspirational lifestyle to their audiences. Perhaps more than any other consumer-facing industry, marketers in the luxury vertical have traditionally maintained a firm grasp on brand messaging and positioning. As a result of technological innovation and the proliferation of social networks, however, luxury brands have had to rethink their preferred strategies. More often, they are involving their audiences directly in marketing campaigns, and taking a collaborative approach to consumer engagement.

As more than 75 million digitally-native millennials enter their prime as consumers, the industry has reached a critical inflection point, and brands that are able to adapt and effectively connect with customers will realize success now and long into the future. Still, co-creating content requires ceding at least a portion of control, which is an understandable challenge in this particular space.

To better understand how brands are tapping into their consumers’ content and developing more honest, authentic marketing campaigns, Olapic recently partnered with Worldwide Business Research (WBR) on a survey of industry leaders. A majority of the 89 senior executives surveyed came from large enterprise organizations (over $150 million in annual revenue) and represented several related disciplines, including marketing, e-commerce, and digital. Here were some of the key insights we uncovered from the survey:

Brands Are Transitioning from Traditional Marketing

From our research, it was apparent that traditional techniques are still quite an important element to luxury marketing programs, though they are beginning to lose their footing in favor of digital elements. When asked which marketing channels they anticipate the biggest growth in spend over the next year, the following topped the list:

  • 79% reported social ads will be a top-five growth channel
  • 79% reported email will be a top-five growth channel
  • 65% reported organic social will be a top-five growth channel
  • 60% reported mobile will be a top-five growth channel

Conversely, the marketing channels that received the lowest ranks for growth were all offline, including in-store (18%), direct mail (16%), print (11%), and out-of-home, events, and slideshows (9%).

When asked the types of content they are using today, the current model was also reflective of a traditional approach:

  • 85% reported professional photography
  • 72% reported branded video
  • 42% reported stock imagery
  • 38% reported user-generated content

While user-generated content doesn’t represent the highest portion of current assets, brands recognize its potential to support the areas of critical growth mentioned above.

Emerging Success of User-Generated Content

This brings us to our next trend, which is the growing impact of users’ content on marketing performance. For industry leaders we surveyed, they reported using customer content across at least 12 different channels, including website (44%), social ads (39%), and organic social (37%), which represented the top three. When asked which channels are driving the most success with user-generated content, the top results included:

  • 91% reported social ads being the most impactful channel
  • 88% reported organic social being the most impactful channel
  • 86% reported email being the most impactful channel
  • 73% reported website being the most impactful channel

Do you notice an interesting correlation here? The channels where user-generated content is most impactful largely map to the channels where luxury brands are spending the biggest portion of their marketing budgets. This means there is an enormous opportunity for luxury marketers to do more with consumers’ content, increasing the effectiveness of their current programs.

Enhanced Analytics Represent an Opportunity

Certainly, marketing programs are very difficult to justify in today’s data-driven market without robust analytics and an understanding of return on investment. When we asked luxury brand leaders how they are currently measuring the effectiveness of their user-generated content programs, 15% admitted they are not at all measuring performance. The rest of the breakdown looked like this:

  • 41% reported measuring engagement metrics
  • 26% reported measuring brand awareness and publicity
  • 22% reported measuring sales and conversions

With such a small percentage of brands measuring revenue performance of their user-generated content campaigns, the survey highlighted an untapped potential for brands to more intelligently deploy consumers’ content across channels. Why haven’t they yet done so? What is preventing brands from fully understanding the value of their user-generated content?

To learn more, download the full research report.