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The COVID-19 pandemic has transformed the world of marketing in different ways. Luxury brands are also susceptible to the changes. Changes in social values, shopping behaviour and consumer preferences have met with an overhaul that no brands can ignore. The pandemic might be behind us but the effects across social, economic, digital, and behavioural aspects of life are here to stay. These changes are reshaping luxury brand’s approach to marketing their products and discovering new ways of building customer loyalty.
Rise of e-commerce:
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Luxury brands have always celebrated their camaraderie with brick-and-mortar. Since luxury shopping is an experiential phenomenon, embracing e-commerce and selling products online was frowned upon by brands. They believed online platforms would reduce the customer experience and hamper the brand reputation.
However, the rise of online shopping among Gen Z and Gen Alpha has changed the perspective towards marketing. According to a report by Statista, 20% of the total revenue of luxury goods was generated from online sales in 2022. Luxury brands are now coming up with innovative digital features to accentuate the online shopping experience of their customers.
Experiential Luxury:
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In a post-pandemic world the word ‘luxury’ has found a new definition. It has long been established that Millennials care more about experiences than exclusivity. A similar sentiment is now resonating with the older generations, where luxury extends beyond buying goods. Experiential luxury is one of the newest evolving sectors of luxury.
For ultra-high-net-worth individuals, the quest for meaningful expressions of love, wealth, status, and generosity is reshaping the landscape of luxury. The demand for immersive, unforgettable experiences is the force driving this transformation, leaving its mark on every facet of the luxury sector.
From the way we travel to how we shop, from the moments we savour in hospitality to the events that etch themselves into our memories, the rise of experiential luxury is the new heartbeat of opulence.
According to an edition of ‘The Wealth Report’, commissioned by Knight Franck, the number of ultra-high-net-worth individuals across the globe is slated to increase by 27% in the next couple of years. As the market is growing, so is the appetite for Experiential Luxury, which goes beyond the standard ideas of luxury and aims to create rich experiences which tantalize the senses and delight them on multiple levels.
To increase loyalty, luxury brands are offering both in-person as well as virtual experiences promising lasting memories and ‘Instragrammable’ photographs.
Content Marketing for Luxury Brands:
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Individuals spent a considerable amount of time online during the pandemic. More and more people turned to online resources as a replacement for in-person experience, which has now become a trend. This has provided luxury brands with opportunities galore to refine their content marketing strategies.
Traditionally, storytelling telling has been one of the key aspects of content marketing for brands. During the pandemic, the popularity of short-form videos increased. According to a survey, 84% of customers cited spending more time watching short-form videos during the pandemic than before. The Soul Publishing’s survey showed people spent 38% time watching short music videos, 36% on cooking or baking videos, and 29% on DIY or craft videos.
This result reflects that there has never been a better time for luxury brands to prioritise content marketing to resonate and connect with today’s consumers than now.
Entry of Metaverse:
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Several brands are currently exploring and investing in their metaverse marketing strategies. Forward-thinking brands are venturing into new territories and gaining a competitive edge by adopting cutting-edge technologies such as augmented reality (AR), virtual reality (VR), non-fungible tokens (NFTs), and gaming partnerships. These investments aim to attract a fresh and young audience.
We have recently witnessed brands like Gucci, Burberry, L’Oréal, Maybelline, etc going all guns blazing with their efforts of bringing in VR and AR into their marketing campaigns.
In April 2023, AI creative studio Maison Meta, founded by Cyril Foiret, even hosted the first AI Fashion Week (AIFW) in New York’s Soho neighbourhood.
With Gen Z’s focus shifting from traditional games to User Generated Content (UGC) games like Roblox and Fortnite, luxury brands are putting in extra effort to target young consumers by collaborating with these gaming platforms. Brands like Gucci, Balenciaga, and Louis Vuitton are leading in terms of luxury activations on virtual platforms. In June 2023, LVMH announced a partnership with Epic Games, Fortnite’s parent company to develop immersive customer experiences and integrate new 3D technology tools into the brand’s design process.
With more and more brands joining the bandwagon, the metaverse is becoming a linchpin of the luxury industry.
Social Consciousness and Sustainability:
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Post-pandemic, ‘purpose-driven’ shopping has burgeoned into a movement. Consumers are more likely to choose a brand supporting a social cause they care about, and brands are taking note of this.
Authenticity has become a key determiner for luxury purchases. 90% of consumers say authenticity matters when they are deciding which brand to support. To maintain customer loyalty, brands have to find social issues that align with their brand value and mission and champion them.
The increase in environmental consciousness has also pushed brands to revisit their marketing strategies and make changes in their supply chain. While sustainability has been a vital pillar for brands like LVMH, others are also making changes to their mission to foster a positive brand image.
Concepts like eco-designing, circular economy, traceability, regenerative agriculture, life-cycle assessment, and sustainable procurement are gathering momentum. Today, most brands are making ethical sourcing, production, packaging and distribution a part of their DNA.
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There is no shadow of doubt that the universe of luxury is changing continuously and only brands that adapt to the latest trends will be able to sustain, grow, and evolve.
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