David Langton, global marketing manager at loyalty specialists ICLP, discusses the importance of loyalty for luxury brands and why digital marketing is crucial to engagement
DIGITAL
Luxury Brand Longevity is a Matter of Loyalty
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Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.
PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.
In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”
The Fondation Cartier pour l’Art Contemparain building in Paris
David Langton, global marketing manager at loyalty specialists ICLP, discusses the importance of loyalty for luxury brands and why digital marketing is crucial to engagement
David Langton, global marketing manager at loyalty specialists ICLP, discusses the importance of loyalty for luxury brands and why digital marketing is crucial to engagement.
Luxury brands have been on a rollercoaster ride over the past 2 years – but the signs are now again very positive with profit levels finally beginning to return to pre-crisis levels. Nevertheless, one aspect that very much came to the fore was that luxury brands can no longer rely on its brand image and reputation to carry it forward in today’s fast moving, digitally connected society. Many realised that they had to refocus on the customer, delivering superior quality and exceptional experiences.
Indeed, luxury brands that have succeeded in making their customers feel like they are part of a family, or an exclusive club, have been able to turn these customers into advocates. Developing greater consumer insight is a key part of how luxury brand’s can achieve this level of engagement, something that is critical to an industry that prides itself on emotion, passion and reputation.
Experience beyond luxury
Can luxury brand marketers ensure that they continue to attract and retain the right customers? Underpinning this are the core back-office functions of data collation, analysis to drive customer insight. Mass market brands who have invested time and money in these areas have proven to deliver value and success.
Luxury customers globally now want more than just a quality product and service: they expect an experience beyond the standards that luxury brands deliver today. They want a personalised and special relationship that recognises them as an individual, regardless of the channel. Retailers have been able to appropriately build one-to-one and lasting customer relationships that ensure their brand is front of mind at any contact opportunity – both in-store, offline and online.
“ luxury brands can no longer rely on brand image & reputation to carry it forward in today’s fast moving digitally connected society ”
Tesco’s, for example, are now the world’s third largest retailer (behind Wal-Mart and Carrefour) and annual revenues have increased nearly 400% since the turn of the century. They have invested in developing customer relationships to generate significant added value through its Clubcard scheme, launched originally back in 1995. The true value they create is the intimate customer knowledge that they generate and how they apply it to drive positive customer behaviour and revenue.
The key point here is for luxury brands to learn from mass retailers, embrace their best practice principles and apply the techniques in a relevant way as part of their marketing and customer management approach. Luxury automotive brands like Porsche are a shining example of how to implement an integrated customer relationship programme which projects its brand promise. Porsche’s programme now touches all aspects of the life cycle of an owner – from pre-purchase, after sales care and then driving repeat or additional sales. They track and profile every customer – collecting data at every interaction and using this to drive their innovative and engaging customer relationship campaigns.
Luxury in the digital world
The rise of the internet means consumers are now empowered to access, compare and interact with brands in a way never seen before. A recent study cited that over 90% of affluent consumers use the internet, with heavy users spending in excess of 4 hours per week shopping online .
Although there have been concerns around social media – which ultimately puts control of the brand in the hands of the consumers – 2010 has seen a marked increase in luxury brands using social media and innovating with it. Indeed several luxury brands, such as Burberry and Jimmy Choo, have really pushed the boundaries in engaging customers using this channel , realising that the benefits for them come from not just having a social media presence but actively engaging and interacting with people in online communities.
“ luxury brands that have succeeded in making their customers feel like they are part of a family have been able to turn these customers into advocates ”
Burberry and digital innovation have become almost as ubiquitous as the brand’s signature haymarket check. The ‘Art of the Trench’ campaign launch in November 2009 was heralded by the fashion press and continues to be the most cited benchmark for the luxury opportunity online. In more adventurous experimentations, the Burberry team has streamed a fashion show in 3D and more recently streamed a private catwalk show live via an iPad app provided to VIP consumers in stores worldwide who could then purchase immediately online. What is clever here is that the brand has effectively used social media channels to bring forward revenue opportunities by shortening the usual six month lag from catwalk to store. Despite a few hiccups, it is hard not to praise Burberry for embracing innovation to engage and make customers feel they are part of an exclusive club.
Taking engagement that one step further, luxury brands have also started experimenting with augmented reality (AR) technology to enable consumers to visualise themselves ‘virtually’ trying on clothes, watches and jewellery. Ray Ban, for example, enables customers to view a mirror picture of themselves wearing a pair of sunglasses, and Tissot the Swiss watchmaker has launched a similar campaign to let their customers virtually try on watches.
Customer is king
Despite recent challenges, today and tomorrow are very exciting times for luxury brands. They should not be afraid to embrace the technology, experiences and learning’s from other industries. In the end, however, a real and sincere focus on better understanding customers and building longer term relationships will be key their future business success.
Please click here to download ICLP’s Luxury Trend Report which looks at how luxury brands can build customer relationships to engender long term loyalty.
This article has been published courtesy of ICLP where it first appeared here under the headline ‘Loyalty – more than a luxury’.
