Mobile and Luxury Retail Brands

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How does the biggest luxury retailers in the world perform on mobile? We analysed a vast number of apps and mobile/tablet sites, and evaluated the experience consumer's get when engaging with luxury …

How does the biggest luxury retailers in the world perform on mobile? We analysed a vast number of apps and mobile/tablet sites, and evaluated the experience consumer's get when engaging with luxury brands on mobile.

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  • 1. Mobile and Luxury Retail Brands The critical mass beyond the hype; Acting on the opportunityCopyright © 2011 BrandEmotivity
  • 2. Intro – About Mobile and Luxury Retail Brands Consumers are always ahead of marketers. It has been so in every new content format technology has made possible. What has changed over the last few decades is the speed with which consumers have embraced new technologies and communication formats. Mobile devices with Internet capabilities have been adopted at a staggering pace, never seen before with other technologies (thank you Mr. Jobs). By the end of 2011, more than 1 billion of these devices will be in consumers’ hands. This has created hype around mobile. Some brands took advantage of the “halo” effect of mobile applications, creating positive associations with the brand. But that effect is now gone. Mobile apps don’t make the news anymore. We have to look at the mobile channel like any other channel, with enough critical mass for marketers to invest, with enough capabilities to be a brand engagement vehicle. So, the first thing to do is determine how much consumers today are trying to engage with luxury retail brands through mobile devices. This is the focus of the first part of this paper. We analysed how much consumers are searching for luxury retail brands from their mobiles. When consumers are using their mobile devices to reach luxury retail brands, “what is the experience they are getting?” Is the question we ask in the second part of the paper. We conclude that there is a gap between how much consumers are looking for luxury retail brands on their mobile devices and the quality of the experience they are receiving from these brands. We dedicate the third part of the document to give luxury brands marketers some tools and ideas on how to make the most of the mobile opportunity- with business sense. This paper is a condensed version of vast data, visuals, and analysis we compiled on each of the focused brands. Detailed information is available for individual presentations and talks – please contact: uk@brandemotivity.comMobile and Luxury Retail Brands Page - 2 -
  • 3. Mobile is beyond critical mass for Luxury Retail Brands It is well known that mobile devices are very important for luxury retail brands in Japan, or Korea – countries with a number or years of fast and effective mobile internet. What is perhaps surprising is that, over the last two years, the tendency for consumers to engage with these brands through their mobiles in other countries has grown immensely. The percentage is far higher than other consumer goods categories we studied, leading to the conclusion that the inclination for consumers to engage with luxury retail brands through their mobile devices is higher than in other categories. The mass of customers trying to engage with luxury retail brands through their mobile devices is far too large to discuss whether mobile has reached critical mass. Mobile is beyond critical mass for luxury retail brands. Graphic 1 – Per-country percentage of Mobile Searches for the 12 brands selected For the studied brands, 13.7% of all global searches on Google are originating from mobile devices. In the United States (still the largest market for luxury retail brands) over 20% of the searches are originating from mobile devices.Mobile and Luxury Retail Brands Page - 3 -
  • 4. In Europe, the UK is leading with 14.5% and Switzerland with 14% respectively. France and Italy follow with around 10%. We included Russia in the study as an indicator for the potential of the Eastern-Europe markets and we found that already 11.5% of the searches come from mobile devices. Japan as the most mobilized country in the world, naturally is a leader in the ranking of luxury retail brands searches. Due to particular conditions of its mobile operators environment, this number may actually be higher than presented. A staggering 40% of the searches for engagement are originating from mobile devices. In Hong-Kong, 22.5% of the searches are originating from mobile devices. If any parallel can be established between Hong-Kong and the rest of China, this is also an indicator of how the Chinese modern urban customers are behaving. We selected UAE to try to understand the tendency in some middle-eastern countries. We found that 19% of consumers searching for the brands analyzed use their mobile devices. Brazil is the country with the lowest percentage of searches trough mobile devices. This is true across categories. It is a good indicator that South America is trailing behind in terms of mobile searches. With searches coming from mobile devices being more than 40% in Japan, more than 20% in the US, and over 12% in France and Italy, mobile is not an option: Mobile is a strategic priority for luxury retail brands marketing communications.Consumers have a high mobile affinity with the analysed brands Overall, luxury retail brands are very much alike regarding the customers’ tendency to search for them on their mobile devices. Gucci (at 19.5%), Louis Vuitton, Bally and Jimmy Choo (at around 17%) have a stronger mobile affinity factor than the other brands. Hermes fares on less than average affinity, though still close to 10% of searches. Prada, Chanel, Burberry, Dior, Versace, Fendi and Luboutin, have a mobile desire potential between 13.5% and 15%. There are a few reasons for different mobile search affinities. One of them may be that these brands are predominantly searched for in countries with high propensity towards mobile and a high number of searches, such as Japan, the US, UK, France and Italy. 11 Country analysis detail is available for focus meetingsMobile and Luxury Retail Brands Page - 4 -
  • 5. In fact, in the US, some brands are well above the average 20% for the analysed group, and similarly in Japan, where two of the brands analysed are above 70% of proportional mobile searches. Graphic 2 – Per-Brand percentage of Mobile Searches for the 12 brands selected As mentioned before, this large proportion of customers searching for luxury retail brands on mobile has developed fast over the last couple of years. Only one year ago the average for luxury retail brands was at a mere 6%. This is customer adoption of mobile outpacing marketers. Brands need to understand and react quickly to customers’ pace if they want to make the most of the opportunity this channel presents to the improvement of their engagement with customers. At the current pace, we estimate that by the end of 2011, more than 15% of all searches for the analysed brands will come from mobile devices.Mobile and Luxury Retail Brands Page - 5 -
  • 6. Brand names do very well on mobile searches Following the analysis of the volume of customers who are trying to engage with the brand, we looked at whether luxury brands are featuring well on natural search results on mobile. When a user searches for the brand name on mobile, the luxury retail brands names analysed display very well on the search results. Examples of searches for two of the analysed brands For all brands analysed, the brand site always features on the first page of the results. This is a great outcome for customers trying to engage with the brand as they are directed swiftly to the brand site. As to the widened searches of brand associated terms or categories (eg. silk scarf, leather bag, red sole shoes, etc) the results are mixed. Most of the time, other companies and sites feature higher in the results. This means that there is room for improvement in natural search optimization.Luxury Retail brands have a lot to improve on mobile sites After searching for the brand name, users will tap into the search results. So, what will their experience be? We looked at the experience across different devices and platforms.Mobile and Luxury Retail Brands Page - 6 -
  • 7. Most of the brands analysed do not have a dedicated mobile site or mobile specific experience. In the case of two brands, the user cannot even reach the site after tapping on the search result from iPhones (flash websites are inaccessible from iPhones) which is one of the most disseminated mobile platforms. Examples of negative experiences when entering the search result Even when websites do not have flash components and users can actually reach the site, the user experience is so poor that the customer will most likely navigate away. As a luxury brands marketer said, “it’s like putting shelves on the 3rd floor and give people binoculars – you can see something but you have to zoom a lot”. In the case of inaccessible sites, such as the example above on the right, users are simply turned away. iPhones still generate most of the mobile web traffic, closely followed by Android. Having a site that is not accessible from iPhone is turning away a considerable percentage of the brand’s potential traffic. Turning customers away or giving them a bad experience is also a lost opportunity in terms of connecting with other channels or applications. A customer prompted by a magazine ad may search for the brand on mobile and the experience will be poor, leading to a negative experience with the brand.Mobile and Luxury Retail Brands Page - 7 -
  • 8. There are of course, examples of brands that are doing really well on this front. Here we would like to salient the case of Burberry. Example of a positive experience when entering the search result Burberry is managing to give its customers a continuous quality of experience. Customers are able to find the brand on their mobile devices, and when they tap the search results, they reach a destination well presented and well thought through. This generates a positive feeling towards the brand.Mobile applications are still a challenge for Luxury Retail Brands On the iPhone applications space – still the largest application store, and the device with high affinity to luxury retail brand customers – less than half of the brands analysed have applications for this specific platform. We noticed that some applications that were previously available, are not available anymore. We can only speculate about the reasons for these applications being retreated, but in some cases at least, the customer experience on these applications was less than interesting and not aligned with the brands’ strategy. Regarding the content and consumer engagement of the existing applications, we see a wide range of experiences proposed to customers. In the case of Louis Vuitton, the proposed engagement is centred on the brands essence and its association with travel. The application “Amble by Louis Vuitton” allows customers to discover more and experience more on their travels, as well as allowing customers to purchase its cherished City Guides. Chanel’s application proposition for customers is centred on runway video and imaging, coupled with news and a store locator.Mobile and Luxury Retail Brands Page - 8 -
  • 9. In the case of Dior, the core application serves almost like a portal to its multiple applications focusing on different elements of its product range. There is an app for fragrances, five apps for the make-up range, and multiple others. This may lead to overlaps and mixed experiences, but the range of products is well covered. Application Example – Serving as an “app portal” In the case of Android applications, we could not find any brand with a consistent proposition on that space. The fact that the Android operating system is normally associated with more economic devices may be a reason for this. Though, this is changing rapidly and there is today a range of upscale mobile devices using this platform, eventually prompting a review of the application strategy. As a conclusion, most luxury retail brands have the capacity to progress in their marketing activity through mobile applications. The challenge on mobile applications is to go beyond simple adaptations of the web presence and define engagement propositions that are interesting and valuable for the customer on a continued basis.A look on iPad sites and apps – An extended experience Larger screens, improved processor capabilities and memory, provide the opportunity for a more enjoyable customer experience. The penetration of tablets is booming, and these devices are even more important in affluent luxury retail customers. We focused solely on the iPad tablet device, as it is still the most popular of tablets by far. Regarding its usage environment, customers use their tablets mostly at home, while consuming other media, or as a substitute for books before sleeping. This has user experience implications that go beyond the simple adaptation of websites for tablet. The user experience needs to be reviewed and adapted fully to make the most out of this medium – as indeed with mobile devices.Mobile and Luxury Retail Brands Page - 9 -
  • 10. With most of the sites visited, the experience is not adapted to iPad. This manifests itself in various problems, such as the size of the screen exceeding the iPad screen size, links being too small to be tapped/touched, broken pages, no adaptation for landscape/portrait, amongst other design issues. We further found inaccessible sites – such as Louboutin. Example of sites with broken links on iPad However, some brands are succeeding in managing their on-line properties to provide a good experience on iPad. There are still some design faults and areas for further improvement, but Bally and Jimmy Choo, are examples of positive adaptations. Regarding iPad applications, the situation is very similar to iPhone apps. There are a few brands that have iPad applications but the design and user experience is not sufficiently thought through and adapted to the iPad device – some applications are even running on ‘small screen’ resulting in poor visuals on iPad. We had to look beyond the 12 brands analysed to find a great example of iPad application. We think it is worth to mention the good work done by Stella McCartney on this front. Purpose built iPad Application Example – Stella McCartneyMobile and Luxury Retail Brands Page - 10 -
  • 11. Mobilising Luxury Retail Brands – The Challenge In the previous chapters, we established that there is a critical mass of customers trying to reach luxury brands through their mobile devices. We also saw, when analysing twelve luxury brands, that a significant number of “houses” have not yet embraced mobile in their engagement propositions. Luxury Brands are built on craftsmanship, unique raw material or other intrinsic product excellence, outstanding retail experience, artistic advertising and trend-setting design. All of these elements are aggregated in a storytelling that builds the brand ethos and kudos. To tackle the mobile challenge, brands must find ways of translating their brand stories and brand products to provide an active and participatory experience, making use of the unique features of modern mobile devices. Extending the story-telling to mobile, as well as building functionality that extends the brand value, are key for success in mobile. We devised a three-stage process as a framework to help luxury retail brands navigate this challenge.Mobilising Luxury Retail Brands – Framework Internally, ownership of a mobile project will most likely belong to marketing communications, but, senior management, brand management, innovation and product development, store managers and local market communications, all need to be involved in the process of mobilizing the brand. We cannot emphasize enough that mobile is a “brand” initiative, not just another channel. Externally, your main partner is the agency involved in your brand strategy (advertising and/or digital). They will provide the best advise in integrating your brand ethos into the mobile ecosystem through content and services. Naturally, you will need to involve a mobile agency as well. Be sure to choose an agency that can be your strategic partner, with global footprint, and able to leverage market insights. Brand, Agency and Mobile Agency should interact and collaborate very closely with each other, creating a “mobile triumvirate” that has the ability to work in partnership from the development of the mobile strategy to its global rollout and maintenance. This triumvirate is key success. The proposed framework is split in three stages. Although presented in a linear way, brands can have differentiated strategies privileging one or another stage depending on the brand’s personality and ecosystem.Mobile and Luxury Retail Brands Page - 11 -
  • 12. 1 – Mobile Presence and Basic Brand Experience Mobile does not give raise the brand reach or awareness; there is advertising for that. Rather, start with the principle that your audience already knows your brand, and what they will be looking forward to do, is to engage with the brand when they are prompted by an external stimulus. If the customer sees an advert, or a product being used, or passes by a store or indeed any other stimuli, he may try to reach the brand through a mobile device. To this end, most likely, the customer will search for your brand on a mobile search engine (we saw in Section 1 that searches for luxury retail brands in North America, Europe and Southeast Asia are already very high). Customers will click (or tap into) the search results and reach your brand site. So, what do you have to offer? At the very least, customers will want to engage with a brand that presents a clean and polished mobile experience, that does frustrate them by being unreachable or having elements that cannot be seen, or simply being just too hard to navigate. You need to get this starting point right. There are three action elements that you need to work on: • Make sure you have a mobile site – this is the first port of call for customers that search and try to interact with your brand. Even if the experience is limited to only a few features, the design and user experience should be clean and adequate to mobile. This way, customers will want to engage more, and if there are areas which are only available on the website, customers will feel stimulated to go to online (on their laptops) because they had a good experience on their mobiles. • Optimize your mobile search – search engines (like Google) have specific methods of indexing mobile sites. You can make your brand more competitive via search terms that are category related rather than just brand related. Build a good mobile search engine organic optimization. • Integrate Analytics and Measurement – This may not seem much of a priority, but we can assure you from experience that this is the right moment to embed the rigour of learning and improving based on your customers feedback into your practice – learn from what they do and how they interact. These three action points are the basis for your brand’s proposition in extended story-telling and value, to be defined in the next stages of the framework.Mobile and Luxury Retail Brands Page - 12 -
  • 13. 2 – Augmented Brand-Storytelling If you have thought of doing something on mobile, you have most likely already considered doing a mobile app. Or, maybe you have one already. But do these apps really translate the ethos your brand is building on the other channels? Most of the applications we analysed in Section 2 are simpler, smaller sized and less functional versions of websites or product catalogues, with no story telling at all. Mobile users want to be involved, to participate, making stories their own. They want to live the brand and share it with their social circles, being themselves part of the brand-story. This is a creative and brand challenge: How to take the brand storytelling and make use of the mobile device as a way to enhance and augment this story, creating a mobile brand engagement proposition. Here are four steps into augmented brand storytelling: • Define the extraordinary story you want to tell. This starting point is the most important element of your mobile engagement proposition; it is what makes it unique. The story can be anchored to the brand or to a specific campaign, depending on the overall brand structure. • Extend the storytelling to mobile, creating an engagement proposition. Having found your story, it is important to understand how mobile can add value to the story and make it unique in a way that if the customer wouldn’t have a mobile device, the customer would not get the full experience. Your mobile agency should engage with your brand agency to explore the best ways to extend the story to mobile. • Amplifying the story needs an angle of social value. Your customers like to be involved with your brand, but they will only share their feelings and experiences with others if the story has an angle that makes it an interesting for them to share with their social circle. • Outstanding execution. Your brand is all about outstanding products and outstanding experiences so, your mobile engagement platforms (sites, apps,…) should be in line with the brand ethos. A mobile device is very different from a tablet, which is very different from a laptop, and the use of the three by its users is very different. Each device needs its own unique approach. Having defined the storytelling and the enabler elements, you are ready to step into augmented brand value.Mobile and Luxury Retail Brands Page - 13 -
  • 14. 3 – Augmented Brand Value This is probably the most difficult stage of mobile engagement for Luxury Retail Brands. The difficulty lies in finding the right value proposition to Customers, given that, for most brands, the definition of “Luxury Products” relies on the quality of raw materials, outstanding craftsmanship, excellence and actuality of design, or any of these combined. For Luxury Retail Brands, extending value to mobile may, at first glance, seem like an impossible task. In the previous stage (Augmented Brand-Storytelling) we asked what “story” you want your brand or campaign to tell in order to define what the mobile proposition is. Here, the questions are similar, and should be answered with the core of the brand in mind: What is the Brand really selling? What services are associated with the product? What needs does the product really cover? Why is the customer really buying this Luxury Brand product? Clear answers to these questions are paramount for you to find interesting added value propositions for your brand. As an example, lets take a Luxury Brand that designs, manufactures and sells shoes. If the brand is selling “shoes” it will be difficult to find a mobile added- value angle to it. On the other hand, if the brand sells “help customers enjoy outstanding shoe elegance”, the Brand can help customers learn about shoe fashion, ideas for garments to go with the shoes, maintenance services, etc. The possibilities are far more interesting. From our experience, Brands can add or extend the value of their products by doing the following: • Education and Information – This is all about empowering your customers to enjoy your Brand more often and better. Having a clear perspective on “what is really being sold” will certainly create space for delivering the right information and/or education about your Brand’s products. • Utility and Innovation – Once you have defined a clear perspective on the Brand, finding utilities or innovative ways of delivering the value proposition becomes clearer as well. Summarising, this stage is all about the brand proposition. This is what will impact and extend beyond mobile; therefore, having the Brand Agency sitting alongside the Mobile Agency is key to success.Mobile and Luxury Retail Brands Page - 14 -
  • 15. Final Comments More than just an option, as we have seen in Chapters 1 and 2, research shows that building the mobile brand experience should be a strategic priority for luxury retail brands – the rapidly growing mass of customers who are trying to engage with the brands through this medium needs to be acknowledged. Luxury brands’ marketers have the opportunity to use mobile to create deeper and more intense customer engagement propositions, accelerating sales and adding long-term brand value. If well managed, marketers can do a lot with small budgets, maximizing what is already being invested in digital content and platforms. Balancing long-term strategy with short-term action, and getting the Brand value angle right, is key to taking advantage of the mobile opportunity.Mobile and Luxury Retail Brands Page - 15 -
  • 16. End Notes About the geographies analysed From a geographic perspective, we selected countries, which represent a substantial business volume to luxury retail brands within a geographic region. In the case of Hong-Kong, we selected this territory in order to understand the potential behaviour in urban Tier 1 cities in China. Note that Chinese mobile operators block the browser identification, making it very difficult to do traffic estimations in that country, hence the Hong-Kong data can be an indicator for the possibilities in cities like Shanghai or Beijing. The countries/regions selected for this document are: Global; US; UK; France; Italy; Germany; Switzerland; Russia; UAE; India; Japan; Hong-Kong and Brazil. About the Brands We analysed in detail data regarding twelve of the worlds largest Luxury Retail brands: Louis Vuitton; Prada; Chanel; Bally; Hermés; Gucci; Fendi; Burberry; Dior; Versace; Louboutin and Jimmy Choo. The criteria behind the choice of these brands were: size, positioning, core products and comparative reasons. We believe these brands provide a good indication of the luxury retail market as a whole. When analysing the data, we noticed discrepancies between brands in different countries and regions. This can either result from customer affinity or other unconsidered factors. In this document we present aggregated data only to minimize deviations. About BrandEmotivity BrandEmotivity is a Mobile Consulting, Innovation and Technical Development company, with operations in London, Paris, Shanghai and Singapore. We help Agencies and Companies “mobilizing” their brands. We do so by engaging at different stages in the development of mobile platforms, and by adding value through a network of skilled and experienced mobile professionals. For more information and contact visit: www.brandemotivity.comMobile and Luxury Retail Brands Page - 16 -