Thursday, February 19, 2015

What does the rise of digital marketing mean for luxury brands?

Recently I came across an article on the guardian ( that highlighted the influence of emerging digital marketing on luxury brands.
The rise of digital marketing is changing the way luxury brands engage with customers, and traditional companies must embrace what is now possible in today’s connected and mobile world or be left behind. “The luxury industry is at a turning point,” said Chris Moody, creative director at brand consultant Wolff Olins, speaking at a seminar hosted by the Guardian and held in association with Harrods Media.

An invited audience joined industry experts to debate the risks and creative opportunities for luxury brands enabled by digital technology. Digital interaction was a feature of the event itself, as audience members participated through an iPad app, submitting questions and voting on which ones should be addressed by the panel.

The automotive industry is an example of the profound change wrought by digital, said Laura Schwab, marketing director at Jaguar Land Rover.

 “The amount of times people actually go to a car dealership has diminished. By the time they get to the door all they really want to do is test drive. All the research, everything, happens online.”

The implication for motoring brands is that winning that dealership visit requires engaging first with the customer online, and ensuring that compelling digital content is available. “We don’t do a lot of print,” said Schwab. “For Land Rover it is close to zero, and for Jaguar a small percentage of our budget.”

Print remains important in many sectors, but the trend is unmistakable. “Print and other media have still got high circulations,” said Harrods Media sales director Guy Cheston, “but that point will tip soon, particularly with the younger generation who haven’t grown up reading a glossy magazine every month.”

There were signs of scepticism in the audience over the merits of digital. One question submitted to the panel via the app quickly rose to the top as people voted for it to be discussed: “The return on investment (ROI) is not as big with digital, so why should we invest in digital advertising?”

The answer, according to the panel, is that digital marketing means a change of mind-set and not just a change of medium. You should look at return on interaction rather than return on investment, said Moody. The “ROI point” is no excuse for not moving forward and innovating.
“You are building a relationship with people who may continue to use your product for the next 25 years. Those interactions that you have, particularly through social streams that you can get through digital, are super valuable. It would be a shame not to invest in that.”

One of the benefits of digital media is that it generates data, enabling analytics that were previously impossible. “Digital media is more measurable than any other form of media we do. It is not just about huge reach numbers, it is about creating engagement, understanding our customers’ journey and then delivering relevant content along the way.”

Social media are hard to get right, but they are one of the most rewarding, the seminar was told. It starts with assembling the right team. Interacting on social media requires a level of knowledge and customer service that accords with the core values of that brand.

“When you decide you want to start engaging in conversation with your community, you’ve opened up the doors to create a two-way communication stream, you can’t decide ‘Oh, but we are a little tired and it’s Sunday’. You have got to be willing to step up to that,” said Schwab.

Social media are not marketing platforms, said Moody. Rather, “it is a way of starting a conversation. You can’t push out a broadcast message through a social stream because people will make negative comments.”

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