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Havas Luxe: Luxury Confronts Digital

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As the landscape of both luxury and digital continues to evolve, luxury brands now understand that today’s consumer demands a full 360-experience.

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Havas Luxe: Luxury Confronts Digital

  1. 1. LUXURY INDUSTRY GROWING RAPIDLY • VALUED AT AN ESTIMATED $77 BILLION IN 2014, THE US MARKET FOR LUXURY GOODS IS BY FAR THE LARGEST GLOBAL MARKET IN THE WORLD • GLOBAL MARKET FOR LUXURY GOODS IS ESTIMATED TO GROW $333 BILLION BY NEXT YEAR — SPURRED BY NEWLY AFFLUENT CONSUMERS IN ASIA & PARTS OF THE DEVELOPING WORLD   • WITH THE RAPID GROWTH & GLOBALIZATION OF THE LUXURY MARKET, BRANDS MUST START LEVERAGING DIGITAL FOR NEW CUSTOMERS WHO WILL EXPECT SUPERIOR EXPERIENCES
  2. 2. WHY IS DIGITAL IMPORTANT? • 62% OF LUXURY SALES ARE INFLUENCED BY BRAND DIGITAL IMPACT  • WHILE THE OVERALL LUXURY MARKET IS EXPECTED TO INCREASE 5% BY 2018, THE E-LUXURY MARKET IS EXPECTED TO INCREASE 15% • 83% OF HYPER AFFLUENT CONSUMERS RELY ON THEIR DEVICES & SPEND TIME RESEARCHING PRODUCTS ONLINE TO HELP INFORM PURCHASING DECISIONS
  3. 3. LUXURY INDUSTRY SLOW TO ADAPT • LUXURY BRANDS ARE CURRENTLY ONLY REACHING 50% OF THEIR FULL POTENTIAL FOR DIGITAL CUSTOMER EXPERIENCE • BRANDS FEAR THAT GIVING CUSTOMERS EASIER ACCESS TO THEIR GOODS WILL LEAD TO A LOSS OF EXCLUSIVITY AND WILL AID COUNTERFEITERS • BELIEF THAT LUXURY CONSUMERS ONLY OPT FOR IN- STORE, PERSONALIZED SERVICE
  4. 4. “LUXURY USED TO BE ABOUT HAVING A SPECIFIC HANDBAG AND NOW IT’S TAKING UBER. IT’S ABOUT SAVING TIME TO NOT HAVE TO DO MENIAL TASKS” – SOPHIE DORAN, MANAGING DIRECTOR LUXURY SOCIETY
  5. 5. REDEFINING LUXURY CONSUMER IN A DIGITAL AGE PAST EXCLUSIVITY ONE-ON-ONE CUSTOMER SERVICE PRIVATE AND INACCESSIBLE PRESENT MOBILE AND IMPULSIVE ON-DEMAND SERVICE & DELIVERY CONNECTED AND INFORMED
  6. 6. KEY DIGITAL PILLARS E-COMMERCE MOBILE OPTIMIZATION SOCIAL INTEGRATION MAINTAINING EXCLUSIVITY
  7. 7. E-COMMERCE CURRENTLY: • 98% OF AFFLUENT CONSUMERS ARE SHOPPING ONLINE • 80% OF U.S. LUXURY CONSUMERS SAY THE TOP REASON FOR PURCHASING PRODUCTS ONLINE IS THE ABILITY TO BUY WHENEVER IT’S MOST CONVENIENT YET: • AN ESTIMATED 40% OF BRANDS STILL DON’T SELL ONLINE
  8. 8. “ULTRA-HIGH-NET-WORTH INDIVIDUALS ARE PRESSED FOR TIME. DO YOU THINK THEY WOULD RATHER SPEND THAT TIME TRAVELING TO A STORE OR JUST CLICKING A FEW BUTTONS AND HAVING THE PRODUCT ARRIVE AT THEIR DOORSTEP?” - RYAN CLARK, FOUNDER LUXURY BRANDED
  9. 9. RECOMMENDATION : EMBRACE SELLING DIRECT TO CONSUMER ONLINE •THE SUCCESSFUL VENTURES OF LUXURY RETAIL PLATFORMS NET-A-PORTER AND YOOX, WHICH HAVE A COMBINED NET REVENUE OF $1.5 BILLION, PROVE THAT CONSUMERS ARE WILLING TO BUY LUXURY PRODUCTS ONLINE, AND AT UNDISCOUNTED PRICES. •BY EMBRACING E-COMMERCE, BRANDS WILL INCREASE PROFIT BY NOT HAVING TO SELL THROUGH AN AFFILIATE SHOP
  10. 10. MOBILE OPTIMIZATION CURRENTLY: • 3 OUT OF 4 LUXURY SHOPPERS OWN A SMARTPHONE AND NEARLY HALF OWN A TABLET • 40% OF EMAILS ARE OPENED ON MOBILE DEVICES, A STATISTIC THAT IS HIGHER FOR LUXURY BRANDS YET: • MANY BRANDS ARE STILL NON-MOBILE OPTIMIZED, OFFER LOW LEVELS OF RESPONSIVE DESIGN AND/OR FAIL TO CARRY OVER E-COMMERCE ENABLED FEATURES ON DESKTOP TO MOBILE • BRANDS ARE ADVERTISING ON NON-MOBILE OPTIMIZED MEDIA BRAND SITES
  11. 11. “THE MOBILITY AND IMPULSIVITY OF LUXURY CUSTOMERS IN THE DIGITAL ERA DEMANDS IMMEDIATE CONNECTIVITY AND CONVERSION…THE FASTER YOU CAN DELIVER IT TO THEM –WITH STYLE –WILL BUILD THEIR LOYALTY MORE THAN BUILDING MORE STORES.” – JAY HOLAN, SVP FITFORCOMMERCE “THE MOBILITY AND IMPULSIVITY OF LUXURY CUSTOMERS IN THE DIGITAL ERA DEMANDS IMMEDIATE CONNECTIVITY AND CONVERSION…THE FASTER YOU CAN DELIVER IT TO THEM –WITH STYLE –WILL BUILD THEIR LOYALTY MORE THAN BUILDING MORE STORES.” – JAY HOLAN, SVP FITFORCOMMERCE
  12. 12. RECOMMENDATION : ADOPT USER FRIENDLY & RESPONSIVE DESIGN • IN THE FIRST MONTH GUCCI ADOPTED RESPONSIVE DESIGN, THE BRAND QUADRUPLED MOBILE REVENUE & EXPERIENCED A 70% INCREASE IN MOBILE CONVERSION • INTUITIVE NAVIGATION, CONSISTENT CALL TO ACTION, DETAILED PRODUCT PAGES & EASY CHECKOUT CONTRIBUTES TO INCREASED MOBILE CONVERSION • RECOGNIZING THE IMPORTANCE OF MOBILE, 26 OF THE TOP 28 LUXURY RETAIL BRANDS NOW OFFER A MOBILE- OPTIMIZED SITE
  13. 13. SOCIAL INTEGRATION CURRENTLY: • LUXURY CONSUMERS TODAY ARE MORE CONNECTED AND RESOURCEFUL THAN EVER • 78% USE SOCIAL MEDIA, WITH MORE THAN HALF USING SOCIAL MEDIA TO CONNECT WITH A BRAND • 50% OF BUYING DECISIONS OF LUXURY GOODS ARE INFLUENCED BY WHAT CONSUMERS HEAR OR SEE ONLINE YET: • MANY BRANDS ARE STILL WARY OF EMBRACING SOCIAL AS IT MIGHT PUSH THEM INTO A UBIQUITOUS ENVIRONMENT, MOVING THEM AWAY FROM THE ASPIRATIONAL BRAND SPACE AS WAS THE CASE WITH MICHAEL KORS.
  14. 14. ” ‘GOING DIGITAL’ REALLY MEANS AUTHENTICALLY INTERACTING WITH AN AUDIENCE THROUGH ALL OF THE PLATFORMS THAT MAKE SENSE, IN ORDER TO REACH THE CONSUMER IN A WAY THAT IS SEAMLESS, INTUITIVE, ENHANCES BRAND IDENTITY AND ADDS VALUE TO THE CUSTOMER EXPERIENCE. ” - ELIZABETH PIZZINATO, SENIOR VP MARKETING & COMMUNICATIONS FOUR SEASONS
  15. 15. RECOMMENDATION : INTEGRATE SOCIAL TO CREATE MEANINGFUL ENGAGEMENT • KNOWING THAT SOCIAL PLAYS A LARGE ROLE IN THE THE DECISION MAKING PROCESS OF TODAY’S LUXURY CONSUMERS, FOUR SEASONS UTILIZED INTEGRATION OF TWITTER, INSTAGRAM, FACEBOOK, AND ORIGINAL BLOGS TO GROW REVENUE FROM ONLINE BOOKINGS 6% AND MOBILE BOOKING 82%  • BY CREATING ORIGINAL & SHAREABLE CONTENT ONLINE, THROUGH BLOGS LIKE ‘HAVE FAMILY WILL TRAVEL’, FOUR SEASONS ENGAGES WITH THEIR CUSTOMERS IN NEW & MEANINGFUL WAYS
  16. 16. HOW CAN LUXURY BRANDS STILL MAINTAIN FEELINGS OF ASPIRATION & EXCLUSIVITY WHILE EMBRACING DIGITAL ?
  17. 17. “THE FUTURE OF THE WEB IS ABOUT PERSONALIZATION…ABOUT ‘ME’. IT’S ABOUT WEAVING THE WEB TOGETHER IN A WAY THAT IS SMART AND PERSONALISED FOR THE USER.” - TAPAN BHAT, VP YAHOO
  18. 18. PROVIDE PERSONALIZATION • GET CLOSER TO CUSTOMERS ONLINE BY CREATING A PERSONALIZED SHOPPING EXPERIENCE • PROVIDE CURATED CONTENT AND BESPOKE PRODUCTS • BARNEYS CATERS OFFERINGS TO INDIVIDUAL SHOPPERS BY MINING PUCHASE DATA AND PRODUCT BROWSING HISTORY TO DELIVER PERSONAL RECOMMENDATIONS • LOUIS VUITTON OFFERS CUSTOMERS THE CHANCE TO CREATE ONE-OF-A-KIND PIECES ONLINE BY MONOGRAMMING INITIALS ACROSS A VARIETY OF PRODUCTS
  19. 19. “LUXURY SHOPPING IS BY NATURE A SENSORY EXPERIENCE. THE HERITAGE, SOUNDS AND VISUALS THAT CAN BE EXPERIENCED IN A LUXURY STORE ARE PART OF THE ATTRACTION AND THE PRODUCTS THEMSELVES HAVE HIGH AESTHETIC VALUES THAT NEED TO BE APPRECIATED.” - JONATHAN HOLMES, FOUNDER LUXDECO.COM
  20. 20. CREATE RICH VISUAL & CONTENT EXPERIENCE • INTEGRATE RICH MEDIA & IMPACTFUL DESIGN TO BOLSTER TRADITIONAL FEELINGS OF ASPIRATION & EXCLUSIVITY • FENDI’S WEBSITE COMMITS TO PROVIDING CUSTOMERS WITH AN ENJOYABLE AND ENGAGING ONLINE BRAND EXPERIENCE BY INCORPORATING HIGH QUALITY PHOTOS AND INTERACTIVE VIDEOS THROUGHOUT THE SITE
  21. 21. “LUXURY SHOPPING IS ALL ABOUT THE PRODUCT EXPERIENCE AND NOT NECESSARY THE PRODUCT ITSELF, A 360 DIGITAL EXPERIENCE WILL ENHANCE THE OVERALL CUSTOMER EXPERIENCE FOR LUXURY BRANDS.” -NICO DU PLESSIS, SENIOR CONSULTANT FITFORCOMMERCE
  22. 22. AMPLIFY IN-STORE EXPERIENCE • STORES STILL REMAIN A BIG DRIVER IN LUXURY SALES • OFFER A DIGITALLY ENHANCED IN-STORE EXPERIENCE TO MAKE THE PHYSICAL SHOPPING EXPERIENCE RELEVANT & DESIRABLE FOR TODAY’S TECH-SAVVY LUXURY CONSUMER • BURBERRY CREATES A DIGITAL 360 EXPERIENCE FOR CUSTOMERS BY BRINGING THEIR ONLINE WORLD TO LIFE
  23. 23. “LUXURY MAKES DESIRE REAL, GRANTING ITS AUDIENCE ULTIMATE CONTROL, ALLOWING THEM TO SHAPE THEIR WORLD, IMAGINE AND THEN REALIZE THEIR DREAMS – AND NOWHERE IS THIS MORE TRUE THAN WITH THE DIGITAL WORLD IN ALL ITS FORMS. IT HAS THE POWER TO MOVE THE RELATIONSHIP FROM A DISTANT TO AN EVER MORE INTIMATE, IN-DEPTH AND DYNAMIC CONNECTION.” - SOPHIE MAXWELL, FUTURES DIRECTOR PEARLFISHER
  24. 24. THANK YOU. THOMAS SERRANO PRESIDENT AND FOUNDER CONTACT INFORMATION: THOMAS.SERRANO@HAVASWW.COM (212) 886 - 4147 AMBIKA SAMARTHYA GROUP ACCOUNT DIRECTOR CONTACT INFORMATION: AMBIKA.SAMARTHYA@HAVASWW.COM (212) 886 - 2089

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