First Past the Post: Why Early Adoption Pays Off for Luxury Brands


Casey Hall | May 09, 2017

Innovation is a buzzword thrown around by luxury brands, but being truly innovative may not be as important as being first to try something new.

In many regards – in particular the realm of design – luxury fashion brands are world leaders, but when it comes to incorporating innovative new technologies and digital strategies, the industry continues to drag its feet.

This lag in implementing innovative digital strategies doesn’t stem from a lack of desire, it’s easy to see from luxury conferences around the world that luxury brands are interested in using big data, virtual reality and e-commerce to their advantage, but there still seems a gap between willingness and implementation.

“We can see a real evolution of our clients’ mindset when it comes to embrace new opportunities as it is now clear for most of them that digital innovation is not incompatible with the industry and their brand values,” said Pablo Mauron, China Managing Director and Partner at DLG.

Nowhere is this more of a problem than in China, where digital nativism is endemic among luxury consumers, and the millennial contingent – known locally and “post-80s”, “post-90s” and “post-00s” – continues to grow, along with its already impressive spending power. The good news for luxury brands is that it’s still relatively easy to create buzz for being “innovative” by doing some relatively simple things. Though no luxury brand has nailed the best ways to utilize new technologies – including virtual reality and livestreaming – those that have tried new things have often been rewarded for simply being the first.

A prime example is Dior, which has partnered with Chinese tech giants WeChat and Baidu to create much talked about campaigns. They first embraced the traditional Chinese Qixi Festival, which in recent years has been repackaged as a more commercial “Chinese Valentine’s Day”-type holiday, by selling limited edition Lady Dior bags using WeChat.

On Aug 1st, Dior has become the first luxury brand to sell top-end bags on WeChat, which sold out the next day. Image from TMO Group Asia.

Though most luxury brands have some form of presence on WeChat – China’s most used social media platform with 889 million monthly users, according to latest figures from parent company Tencent – Dior became the first to sell direct to consumers using the platform, and got everyone talking about luxury commerce on WeChat in the process.

With more than 100 popular livestreaming platforms and 344 million people engaged on these platforms in China, livestreaming is the hottest new mainstream technology sweeping the country. In 2016, the value of the industry in China doubled to more than $3 billion, according to research from Credit Suisse.

Brands are scrambling to keep up with the fast uptake of livestreaming in China and there is still a distinctly lo-fi and non-luxurious feel to livestream broadcasts – but they have certainly proven popular with consumers looking to engage more directly with celebrities KOLs and brands.

As with other previous incarnations of digital innovation – such as e-commerce – beauty brands have been particularly fast on the uptake. Granted, it’s substantially easier for consumers to fork out the price of a lipstick than a luxury bag, but the fact that Maybelline sold 100,000 lipstick during a two-hour live streaming event with spokesperson Angelababy was enough to make many other brands sit up and take notice of livestreaming as a vital digital marketing tool.

More recently, the rarefied air of luxury watch mecca Baselworld was opened up to fans of Chinese pop star Kris Wu, who partnered with Bulgari to livestream his impressions of the event on Sina Weibo’s Yizhibo platform.

In both of these examples, the fact that brands were utilizing livestreaming at all was as much the story as how they were using it, or whether they were using it well.

“Livestreaming has proven to drive great results in terms of exposure, from a qualitative standpoint, the nature of the content broadcasted also resonates very well as it represents a clear alternative to traditional corporate content who might lack of authenticity, especially for a younger target audience,” Mauron said. “This being said, while livestreaming succeeded in generating sales for beauty brands, it is still an open question if it can efficiently support the “see now, buy now” concept by driving revenue for the rest of the luxury industry.”

Luxury brands are generally inclined to wait until they can find the best usage scenario before adopting new technologies or innovations, but sometime it pays to be first on the bandwagon, rather than the best.

China | Innovation