Most luxury brands are missing 3 key digital fixes
- Johnny Morris
- Dec 16, 2020
- 4 min read
I’ve just completed six months research into the digital activities of luxury brands. I’ve looked at how their content performs online and interviewed some of the top marketers. My research focused on the impact of influencers for luxury brands, but as I started to explore the marketing ecosystems, I discovered that influencer content would struggle to perform effectively without some major changes made to marketing operations in many businesses first.
The research highlighted that many management teams don’t understand digital.
“All new channels are considered controversial as a starting point"
said one interviewee. Some of the smaller luxury brands set the standard for highly effective content, despite some of the most technically proficient digital marketers working in the largest brands.
Here are the three quick fixes that could help generate better performance from digital budgets:
1. Invest in brand building content, not just tactical activities
Most of the marketing budget for each luxury brand has been focused on highlighting the latest products or communicating short-term offers such as free delivery or a short-term discount promotion. It’s easy to see the attraction of this type of marketing… it has a measurable outcome so Return on Marketing Investment (ROMI) can be calculated. Yet, over time, if all marketing communication is tactical, brands start to see the performance of these campaigns take a nose-dive, as the consumers belief in the luxury brand starts to fall.
Why should they be loyal? It’s important that the stories of brand heritage and quality of product continue to be told. By continuing to invest in a balance of longer-term brand building and short-term tactical activities, a luxury brand is more likely to see a better outcome from their promotions, especially seasonal clearance activities.
Digital marketers have become overly distracted by the media buying options. ‘Shit that arrives at the speed of light is still shit’ said advertising guru David Abbott (2014). Some research from Nielsen highlighted the most effective impact on advertising effectiveness is the quality of content – more important than recency, relevance, and timeliness overall.
When I looked at luxury brand content shared on Instagram, I was surprised by the broad difference in performance. Brands might see some degree of short-term benefit reflected in engagement (likes, comments and shares) but over a longer period (I took 30 days) the impact of digital marketing on consumer awareness was often marginal. Often, free delivery messaging might have had budget put behind it to increase reach, but key brand building content had only organic reach.
2. Structure teams to reflect an omnichannel consumer
Most luxury brands I spoke with had delegated responsibility for influencers to their PR departments, as these teams were often responsible for managing relationships with their celebrity customers. On the surface, this makes sense as any consumers who have potentially major impact on a brand’s performance should be carefully managed. However, the content generated by these influencers often misses the opportunity to perform well, by partnering with influencers on paid activities to curate content that is going to be channel optimised. What works best on Instagram is different to output produced to be viewed on YouTube.
In a digital world, consumers engage with brands through many different channels, and it is important that brands recognise this by targeting content to reach the most likely consumers and adapting editorial content to suit the optimal channel format. The main outcomes from assigning PR teams to manage influencers was the lack of appropriate content for brands to share on their own digital channels and almost zero integration between great influencer content and marketing spend on social media content boosting.
If brands have appropriate marketing technology in place to track and segment audiences in their campaigns, then managing the publication of brand content through a pipeline approach such as Tuten & Solomon’s Social Media Marketing Funnel (2012) can deliver the best outcome. Here’s how a digital marketer might approach influencer content:
Considering the role of influencers when applying the social media funnel. Adapted from Tuten and Solomon (2012)
There is something to be learned from the way PR teams nurture relationships with influencers as brand ambassadors. If digital marketers adopt this approach, they tend to see better performance from influencer content over time. I really like Audrezet and de Kerviler’s view that a longer-term relational approach to content curation is more effective than a short-term transactional one:
3. Be clear on your digital journey
It was clear from my research that most brand leaders weren’t supporting any particular digital strategy, leaving it as something to be dealt with by digital marketers and (in some cases) e-commerce teams:
36% of leaders believed their brand was still best experienced in their stores rather than online
27% of business owners were unclear on their digital strategy
18% of luxury brand leaders felt digital channels may damage their brand’s reputation
It’s really important for luxury brand leaders to really understand the digital opportunity better. Technical expertise is not required, but instead an awareness that many brands have grown their international customer base through digital channels by an average of 30%, and how they are achieving this. Much of my time in leading retail marketing has been in bringing management boards up to speed on the basics.
Which one of these digital transformation journeys are you on?
These digital journeys weren’t made up by me. They come from Strategy& (the consultants I always feel we should say are formerly known as Booz and Company). You can find our mor here.
If a business is clear on their digital transformation journey, they are more likely to focus marketing teams on the right goals and supporting them appropriately.
A free report showing some of the findings from my research can be downloaded from here
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