In 2017, the much-maligned and incredibly lucrative Millenial generation accounted for 85 percent of the luxury sector’s growth. Luxury has seen a recovery over recent years (Gucci reported 49% sales growth in the final quarter of last year). But a move towards marketing high-end, premium products and services to the new generation has also meant a re-evaluation of what it actually means to be a luxury brand.
In many ways, we’ve seen some of the traditional fashion houses suffering something of an identity crisis over the past 10 years. It’s clear that the old qualifiers of prestige and heritage don’t quite cut it anymore when it comes to defining luxury. We need some new parameters. There are a few generational shifts which have prompted this redefinition – the digital revolution and the strive for individualism to name just a couple. There’s also a kind of freedom that a more fluid approach to the concept of luxury has opened up for new premium brands entering the market. Let’s take a look at some key considerations for launching a luxury brand that can face up to the new generation.
Scope Out Your Digital Landscape
In the previous world of luxury, the widespread belief was that an eCommerce in some way degraded your product and alienated your high value net worth customer – who found online shopping unappealing and preferred to purchase instore. Although many brands have been hesitant to go all in on eCommerce, the soaring success of multi-brand retailers like NET-A-PORTER, Farfetch and Matches has all but put that belief to bed.
We know your digital strategy (particularly your approach to mobile) is important. But eCommerce is only one part of the puzzle. An insightful piece of research from McKinsey & Company shows us that eCommerce represents only 4% of luxury sales, but an additional 40% are in some way influenced by digital experience. In the new world of luxury, we need to imagine our customer’s decision to eventually purchase our product or service as the final stage in a complex web of brand touchpoints, occurring both offline and online. Dig deep into data on how exactly your target customer is using different channels. Ideally, you’ll launch with a map of your archetypal customer’s purchase journey which plots their motivations at each point.
Launch With a Brand, Not a Product
An exceptionally well designed, stylish product or service may just not be quite enough anymore. As any good luxury branding agency will tell you, launching with a clear and recognizable brand identity is totally non-negotiable.
At the lower end of the spectrum, a start-up premium brand that’s gained notoriety and an almost cult-like following is Emily Weiss’ Millenial-money-making beauty brand, Glossier. For Glossier, brand consistency was absolutely key to the success of their launch in the US and, later on, the UK – from their distinctive editorial photography to their perfectly-pink packaging. Your challenge as a luxury brand operating in any sphere is the same. From your logo, to your site design, to your packaging, to your stores, to the tone of voice in your order confirmation emails – your brand identity should literally radiate from every single touchpoint
Identify Key Influencers
Once the reserve of high street brands, 2017 was the year that luxury brands embraced the Instagram influencer. Working with influencer agency Whalar and 200 different influencers from 58 countries, Dior’s first influencer campaign focused around the hashtag #DiorLoveChain. Put into action by their own in-house faces and then activated across Instagram by selected micro-influencers, the campaign brief invited the creation of content in response to the question #WhatWouldYouDoForLove.
They got it just right and there are lessons to be learnt from their approach even if you’re not quite Dior. Identifying key people with a unique insight into the community you’re targeting is going to be totally invaluable to you ahead of launch.
Think About How You’re Adding Social Value
Your customer is no longer interested in just what you can do for them. They want you to show them what you’re doing for wider society and the world as a whole. In fashion, there’s been a huge drive towards supply chain transparency for luxury brands. Before, describing yourself as an ethical or sustainable brand was in some “niche”. Now, it’s an absolute pre-requisite and something you’ll need to address properly ahead of launch. If you want to align your brand with the values of your customer, you need to think big.
The role of the IRL store has changed somewhat, although we do know that it’s still where the majority of luxury purchases are taking place. This one is actually in some ways an economic shift. Over the last ten years, lease lengths got much shorter. For that reason (plus, of course, the move to digital), retail looks a little different these days. While you may have a fancy flagship store, you should also consider launching with a set of ideally-located pop-up stores to introduce your product or service to your target market.
Pop-up stores are also one-of-a-kind events that present the opportunity to create content yourself and prompt attendees to produce their own. Remember that your customers are now all valuable co-creators when it comes to launching your luxury brand.
Creating a luxury brand is no small task. To set your business up for success, make sure that your eyes are on digital, effective and consistent branding and that you’re always considering the tastes of the new generation of luxury customers.