Luxury brands have long depended on their legacy to convey their value. And, for the most part, it has worked: Studies show that a brand’s origin story directly boosts its perceived “brand strength” in consumers’ eyes, as it adds a level of depth and authenticity.
However, the problem with relying on prestige is that its value has often been conveyed in the material realm. Think tailored customer experiences or boutique showrooms and storefronts. Transferring that luster from offline to online often presents a challenge that brands have to creatively overcome.
According to Unity Marketing and Luxury Daily’s “State of Luxury 2018” report, the digital economy represents both a key hurdle and massive growth opportunity for luxury brands. Today, consumers across every demographic demand that luxury brands translate their longstanding name and reputation directly into the convenience of digital.
The challenge, then, is optimizing tools such as social media without compromising heritage. Thriving in a digital setting does not just mean slapping heritage onto trendy technology; it means redefining the term altogether. Heritage is not confined only to the past in terms of tradition. Instead, it includes the traits carried through time by the brand.
Brands like Moncler are leading the way. The Italian apparel company prioritized creating an elevated in-store experience that customers craved before translating that experience to digital. Now it has unveiled a new strategy, replacing its seasonal designer partnerships with monthly guest collaborations. Each collaboration includes a capsule collection presented at a popup event accompanied by editorial-style digital content—a tactic that blends Moncler’s successful history of designer alliances with the kind of landscape-shifting social events that will shape luxury in the future.
It is easy to see why a digital and social activation like Moncler’s would succeed in the Instagram age. Aside from the sheer onslaught of new products and content, Moncler’s strategy leverages the brand and the designer’s social followings, creating connections and engaging experiences that move customers beyond likes and into both in-person and digital loyalty.
To truly tackle these challenges and create successful activations, brands must integrate marketing with IT on an organizational level. Most brands already have a wealth of internal data at their fingertips, detailing how shoppers move through the purchasing funnel and ultimately convert. Brands can and should be using it to their advantage.
Barneys New York offers a leading example of this strategy. Renowned for its bespoke in-store services, the brand’s incredibly rich history presented a unique opportunity when it came to creating an equally compelling and immersive experience for customers online.
As steward of the Barneys New York legacy, CEO Daniella Vitale has spoken at length about prioritizing data on a companywide level. Since she took on the position in 2017, she has focused on leveraging the company’s own shopper data and sees improvements to the customer’s online experience as paramount to the company’s success. One-fifth of Barneys New York’s revenue now comes from online purchases. Vitale said she is determined to do more.
Search engine optimization is another important digital strategy that brands can no longer afford to ignore. In fact, search engine results pages have become the new luxury shelf space. According to a study by luxury consultancy Havas LuxHub, while the in-store boutique experience still accounts for the majority of luxury brand awareness and purchasing, search engines were listed by more than 45% of study responders as one of the major factors driving their purchases. Brands must rethink rankings as they develop new marketing strategies.
Of course, not everyone has these types of resources in-house, which is why strategic partnerships with technology companies and firms may be especially important for some brands. Securing the right partnership can mean pairing the best in digital experience with the best in luxury brands—a dynamite combination. Fifty percent of business executives in a recent Economist Intelligence Unit survey said their digital partnerships have more than proved their value.
We’ve seen this already at the Sotheby’s International Realty brand. We worked with cutting-edge digital partners to create Curate, an augmented reality app that is reshaping how consumers engage with the home-buying experience.
In a market where established brands have been careful about adopting the latest innovations, Swiss luxury watchmaker Hublot took a calculated step forward by merging new technology with age-old tradition. To celebrate its title as the official timekeeper of the 2018 FIFA World Cup, the brand released its first smartwatch, the Big Bang Referee 2018 FIFA World Cup Russia. The wearable’s main market was field officials, who use it to connect with their video assistant counterparts in real time.
Hublot also made 2,018 watches available to luxury consumers who wished to own a piece of the World Cup. Soccer enthusiasts could use the watch to receive pregame notifications and monitor goals, penalties, and statistics throughout the games.
There is no denying that luxury brands must adapt to the changing times, but losing the traits of exclusivity and prestige could mean losing the brand’s ultimate identity. By reframing heritage into simple brand values and experimenting with data-backed strategies, brands can have the best of both worlds: a rich, meaningful past with a strong sales future.