GENESIS Digital Transformation: Stories of Origin and Transition.
Letter from the Editor Florine Eppe Beauloye, Editor in Chief
elcome to the first issue of the Luxe Digital Digest. This publication is for you, the believers, game changers, leaders who dare and care to think innovatively. Luxe Digital is born from a vision: providing a platform to inspire, empower and drive positive change. A simple, stylish yet substantial luxury media, Luxe Digital redefines luxury for the modern age. At Luxe Digital, we made the conscious decision to publish original content that is both informed and opinionated. Crafted by a team of professional copywriters, academics and luxury insiders, Luxe Digital is a distilled collection of fresh perspectives, reflective insights and thought-provoking digital explorations that have the power to shape the future of businesses. So what can you expect? Through our sections, we deep dive into topics that matter (reports), highlight digital and luxury trends you should take notice of (trending), share stories of inspiring thought leaders (opinions), translate digital jargon in plain English (speakeasy) and showcase the best of the best in various classifications (ranking). Each issue explores a specific theme that serves as the editorial focus.
In Issue One - Genesis, we compiled stories of origin and transition. A digital-first outlook on luxury marketing. Transforming luxury print magazines for digital. Taking back control of the customer acquisition in luxury hospitality. The emergence of new luxury hubs in China. The growing thirst for conscious consumption in beauty and fashion. Seeding thoughts on influencer marketing, wealth management and much more. In February, we will put the spotlight on the future of retail, blending the online and offline experience. In the spirit of community, our monthly magazine cover will feature the work of talented designers and artists from our select creative circle. â&#x20AC;ŚAnd this is only the beginning! The beginning of an enriching and rewarding journey of digital innovation and empowerment. Thank you for connecting with Luxe Digital.
Florine Eppe Beauloye Editor in Chief
Contents Artists, Trendsetters, and Entrepreneurs: When Influencers Become Professional Luxury Content Creators 6 Transforming Luxury Magazines for Digital with Michael von Schlippe
How Luxury Skin Care Uses Digital to Drive The Beauty Industry Growth 12 The Next Wave of Philanthropic Luxury Retail 18 18 8
CRM at the Heart of the Luxury Retail Evolution with Pontus Persson 20 The Debated Popularity of Influencer Marketing for Luxury Brands 23 Redefining Luxury Affinity Marketing with Irene Ho 29
Digital Transformation in Hospitality: A Guide for Luxury Hotels 32 Luxury Brands Review their Strategy for Chinaâ&#x20AC;&#x2122;s Tier 2 and 3 Cities 38 A Digital-First Outlook on Luxury Marketing with Simon Beauloye
What Wealth Managers Can Learn from Luxury Digital Marketing for the HighNet-Worth Millennials 47
Contents Storytelling and Showrooms: How Generation Z is Transforming the Future of Luxury Retail 52
6 Steps To Opening a Fine Dining Restaurant: The Best Pre-Launch Marketing Strategy
Florine Eppe Beauloye on Sitting in the Digital Front Row of Luxury 61 Contact Luxe Digital
In Our Next Issueâ&#x20AC;Ś
Artists, Trendsetters, and Entrepreneurs: When Influencers Become Professional Luxury Content Creators
s Instagram has grown exponentially the past few years, now capturing 700 million active global users monthly, so has the power of digital luxury influencers. Much of what has been written about the influencer marketing trend has been from the perspective of luxury brands and how to establish effective partnerships with influencers. However, for luxury brands to truly understand the potential of influencer collaborations, it is worth taking a look at the “profession” of being an influencer and the myriad of possibilities that they are exploring. As you’ll soon learn, influencers have become quite the chameleons within the world of luxury, embracing diverse opportunities and roles, as well as redefining the boundaries of traditional definitions of influencer marketing.
Artist influencers use luxury brands to further their artistic mission
t first glance, it’s easy to mistake influencers as the next “celebrity endorsement” that can flaunt and showcase luxury brands to their online community. However, the digital influencer of today has become the source of original content creation, and not just for the benefit of the luxury brand. To explain, many Instagram influencers that are considered micro or mid-tier influencers (followers of 10K to high six digits) are established creatives in their field of expertise. Luxury brand partnerships for these influencers are not a source of income, but instead, an outlet for artistic expression and collaboration. This is a trend that resonates with many talented creative entrepreneurs, like Pari Ehsan (204K Instagram followers). Founder and creative director of Pari Dust, her mission (in her words) is to “explore new ways to combine the elements of our visual world, offering windows into contemporary art, fashion,
and the built environment through [a] unique lens.” It would be incredibly narrow to peg her as an influencer in the traditional sense, even though she has worked in artistic collaborations with luxury brands like Chanel. Creative talents like Pari Ehsan are blurring the line between luxury brand influencer and artist/designer.
From the perspective of creatives that happen to be digital influencers, luxury brands are not just seen as business opportunities, but rather a dynamic and unique medium for artistic expression and collaboration. The possibility of being a channel for creativity is an interesting perspective to consider for luxury brands, and provides a bit of insight into the opportunity Luxe Digital
that exists for genuine, artistically-driven collaborations.
Trendsetter influencers break down the exclusive world of high-end fashion
he world of high-fashion is an infamously exclusive, members-only crowd. However, recently, influencers have broken down this daunting wall and been invited to walk the runway themselves. Fashion influencers haven’t had an easy go at being accepted into the world of luxury fashion. High-end magazines have dished out their fair share of criticism, labeling influencers as “wannabes” desperate for attention. Similar to the sentiments of Vogue’s creative digital director, Sally Singer just last year, digital influencers were decidedly too plebeian for high fashion: “Note to bloggers who change headto-toe paid-to-wear outfits every hour: please stop. Find another business. You are heralding the death of style.”
The fact that the likes of Rebecca Minkoff and Dolce & Gabbana are inviting fashion influencers onto the catwalk speak volumes to the transformation of the luxury fashion industry and the clout that digital fashion influencers carry nowadays. Influencers have evolved from being seen as imitators and outsiders of high-end fashion to being at the source of inspiration and trend-setting.
For high-end fashion brands to remain relevant in the industry, it is essential to carefully consider strategic partnerships and potential ways in which to include digital influencers as part of an overall brand strategy.
Entrepreneur influencers launch their own luxury brands
ore and more Instagram influencers are foregoing potential luxury brand partnerships and instead, using their captive audience to launch their own luxury brands. When it comes to top-tier influencers who are in essence already a “brand” in and of themselves, this doesn’t come as much of a surprise. However, many mid-tier influencers like @innika (71.3K follower) or @dazedbutamazed (24.3K followers) are using this opportunity to create their own luxury brands as well. Both Instagram influencers have e-commerce driven brands that command a luxury price-point. Innika, a stylist and mom, started her own fashion line, aptly called Innika Choo, and sells handsewn, embroidered linen frocks at upwards of $450 USD per garment. Jes (@dazedandamazed) started her own curated collection of custom woven, hand-dyed, flax seed linen bedding for kids and adults, with each set netting out around $320 USD. For both Instagram entrepreneurs, their social media account was the primary platform to drive sales, followed by a brand website. Success has been undeniable with quickly sold out mini collections and features in the likes of Elle magazine. Not only are mid-tier influencers,
like Innika and Jes, entrepreneurs utilizing their existing Instagram fan-base to launch a luxury business, but they are also a part of a bigger re-definition of what “luxury” means. The popularity of a luxury fashion or lifestyle brand is no longer purely based on established brand names and a sense of explicit opulence. Instead, the luxury mindset seems to have grown more inclusive of craftsmanship, detail, quality of materials, and ethical production. The autonomy that mid-tier influencers currently have to create their own brands based on their aesthetics and passion is something that luxury brands need to note. Collaborations are becoming more sophisticated, with both parties assessing each other’s style and brand to determine if it is a good fit. On the other hand, if luxury brands can find budding influencers with a similar ethos, there is an opportunity to co-create and perhaps even collaborate on the launch of a passion project. This would blur the lines between influencer and brand even more, as they become business partners with a stake in brand sales. The world of influencers is one of possibility. And although it involves navigating through a fair bit of grey space, the potential alliance of influencers and luxury brands can prove to be fruitful for both parties.
Words by Tian Chang. Photography by Pari Dust.
Bazaar, Esquire, Robb Report, National Geographic, GEO, and Architectural Digest. Michael has been based in Asia since 2009 to establish and successfully expand IMV across the region. A few years later, IMV is more than ever a key player in Asia’s luxury media landscape. Luxe Digital: Hello Michael, it’s great to see you again. Thank you for taking the time to discuss with Luxe Digital. Michael: Hi Simon, it’s good to see you too! Luxe Digital: I would like to start our conversation by giving some context to our readers about the business of luxury publishing. Can you please give us a general introduction to what you do?
Transforming Luxury Magazines for Digital with Michael von Schlippe
ichael von Schlippe is one of those gentlemen who look effortlessly elegant and charismatic upon meeting them. To say he is a true living embodiment of its luxury magazines’ values is an understatement. Simon Beauloye sat down with Michael to discuss how digital is transforming the business of highend luxury media publishing. Michael is the founder and co-owner of Indochine Media Ventures (IMV), a media company
that focuses on digital publishing, luxury print publishing, and events for high-net-worth individuals and affluent Millennials across Southeast Asia. IMV’s portfolio of brands includes Robb Report, Esquire, Luxury Guide, and Buro 24/7. The media group also publishes Barcode, a magazine for the young urban readers in Ho Chi Minh, STAIL.my, and My Pope. Michael is originally from Munich, Germany, but his career rapidly led him to Moscow, Russia, to work with renowned publishers such as Gruner+Jahr, Condé Nast, and Independent Media Sanoma Magazines. Michael was in charge of growing prestigious titles including Vogue, GQ, Harper’s
Michael: Well, I used to say that I was in the business of publishing, but that’s not how I see it nowadays. We’ve now become storytellers.
When I started in luxury publishing, only the editorial aspect of the business focused on storytelling. Today, the marketing and sales teams need to be able to incorporate elements of storytelling in their own approach if they want to be successful. As a high-end media company, we need to communicate compelling and exciting stories to both our readers and our advertisers. Our media sales team, in particular, has seen a dramatic shift over the past few years. They used to go to luxury advertisers with their pitch deck to negotiate the budget and ad placements in our magazines. Luxe Digital
But this doesn’t work anymore. Digital and the growth of online publishing has radically transformed our operations. Luxe Digital: How did the digital transformation of luxury publishing start and how did you approach it to take advantage of its opportunities? Michael: For us, it really only started in 2014. I vividly remember the moment when our long-term partners and luxury advertisers told us that print media wasn’t their priority anymore. Digital obviously didn’t start all of a sudden in 2014, but prior to that year, luxury brands in Asia were only mildly interested. Their headquarters in Europe might have started to leverage digital around 2010, but luxury advertisers in Asia felt that traditional print media was still the best investment to reach their audience. 2014 was another story altogether. Sales for high-end brands fell sharply across the region, due in part to a drop in tourism from China. This had a significant impact on how luxury advertisers decided to allocate their budget.
My sales team told me at the end of 2014 that most of our advertisers were cutting budgets for magazines. Luxury advertising budgets were being cut across TV, print, cinema, and outdoor for all industries. The only area that was seeing an increase was digital. The increase in digital luxury advertising budget did not equal the reduction in print, but it was the only media buying growth that we saw.
understand the digital world and to know how to engage their audience.
Robb Report, our largest publication at the time, wasn’t ready to provide a compelling digital solution to our luxury advertisers, so we decided to look somewhere else for growth. We had a Robb Report website for years running in parallel to our print version of the luxury magazine, but in retrospect, we didn’t do enough to treat it as a media in its own right.
Buro 24/7 was launched in 2011 by Miroslava Duma. Mira and I used to work together in Moscow, so I just picked up the phone and offered her to expand the Buro 24/7 brand to Asia. That was in December 2014. Two months later, in February 2015, we had agreed on the details of the Asian expansion with IMV. By May of that year, we had the Singapore version of Buro 24/7 online with the Malaysian version coming up shortly after.
I think it’s one of the original sins of legacy publishers. Print was our priority, and we would just republish most of the content online as an afterthought. That model not only didn’t work, but it also damaged the confidence in heritage publishers’ ability to generate high traffic to their websites. As a result, it undermined the luxury advertisers’ trust in publishers to
So we needed a digital-first media that understood how to engage its affluent readers online. We wanted something more interactive, where our readers could engage with our content in a measurable way. I thus started looking at adding a new brand to our portfolio. That’s when I stumbled up Buro 24/7.
Interestingly enough, I remember talking to Richard Nilsson from Lifestyle Asia at the time. His story was the complete opposite to ours. They started Lifestyle Asia as a digital-only luxury publication and initially struggled to find large advertising budget from brands. But towards 2014, they saw a real turn around in advertisers budget allocation to digital and their business started to grow consistently from there on.
“We are now able to target ultra-high-networth readers with our print edition and broaden our reach online to a younger affluent audience.”
Luxe Digital: So while the digital transformation in luxury advertising in Asia might have come late, things moved very fast once it started. How did things go from there for IMV?
now able to work with influencers and celebrities on social media to reach audiences that we wouldn’t have been able to connect with before.”
Michael: Absolutely! The shift to digital was sudden and significant. But we took the right decision by launching Buro 24/7 in Asia and the brand rapidly became wellknown among the younger Asian affluents. The team now publishes over 20 stories per day across our Singapore publications alone. We’re delighted to have engaged and vocal followers on social media, and traffic to the website continues to be on an upward trajectory. The acquisition also brought new talents to our team and we were rapidly able to apply the newly acquired digital knowledge to Robb Report. By the end of 2015, we launched a completely redesigned version of the Robb Report website to make a statement to our readers and advertisers that we were radically changing our operating model online. We started publishing exclusive digital content and invested more resources to understand who our readers where. What we saw over the following months really surprised us. The audience of the print version of Robb Report has always had a median age of 45 years and 85% male (which is very high considering most male magazines have at least 35% of female readers). The online audience of Robb Report however was a very different story. Our online readers are 10 years younger and almost 50% female.
“Digital opened up new opportunities. We are
Luxe Digital: Were you concerned about diluting the Robb Report’s brand identity by broadening its audience online? Michael: Not really. We have definitely made our brand and content available to an audience who is more aspirational than the affluent readers of the print edition, but it follows a certain trend in the broader luxury industry. All the high-end luxury brands are now talking about the Millennials and Generation Z consumers. It’s a natural evolution for us to follow as well. We are now able to target ultrahigh-net-worth readers with our print edition and broaden our reach online to a younger affluent audience. It provides a compelling solution to luxury advertisers looking for a 360 integrated marketing campaign.
This is also why the majority of the content that we publish online now is native and original. For example, Robb Report features a digital concierge section with a wealth advisor and a wine selection section that is exclusive to digital.
Luxe Digital: If you think more holistically about the business, how has digital influenced the way luxury media companies operate? Michael: Digital is clearly opening up new opportunities. We are now able to work with influencers and celebrities on social media to reach audiences that we wouldn’t have been able to connect with before. With digital, we also have access to more data to understand who our readers are. We use Content Insights, for example, to analyse how our readers consume content online, what works, and when. This provides our editorial team with invaluable information to decide what to prioritise. Some of the content that we used to write on high-end mechanical watches, for instance, have changed as a result. Luxe Digital
We now focus on high-end watch trends instead of the technical aspects of the mechanical complication movements. There is also a human component to the digital transformation of our business. Our operating cadence used to be centered around a monthly publishing timeline. With the addition of the Buro 24/7 team, we’re now publishing over 15 stories per day. I’m delighted to see how well and naturally the various teams have come together. It’s very satisfying to see knowledge being shared from both sides of the spectrum to help our publications improve. Luxe Digital: Looking back, what would you identify as the keys for any business to make a successful digital transformation? Michael: I believe that the nature of luxury is and will remain primarily an offline, tactile experience. That said, digital is a critical technical component that all companies need to get right. There is a high level of expectations from affluent consumers for the digital experience that luxury brands should offer. Online experiences need to be seamless and well-designed with perfectly tuned features. You’ll rapidly lose your audience if you don’t get this right.
How Luxury Skin Care Uses Digital to Drive The Beauty Industry Growth The Opportunity
The high-end beauty and skin care market is one of the fastest growing luxury industry. Euromonitor International estimates a 6% growth for the year, with the premium skin care segment outperforming its mass market counterpart for a third year in a row. Affluent consumers have an appetite for skin care knowledge and are receptive to learning about and engaging with luxury brands online. High-end skin care brands have an opportunity to build digital appeal and credibility by tapping into global consumer demand for entertaining and educational content.
Beauty and skin care remain industries that are driven by fast-disappearing fads. Aside from uncovering robust trends, the digital-driven discovery of new skin care products and the information is borderless. This necessitates that digital marketers be attuned to the ebb and fall of global trends, which makes forecasting trickier than ever. The way luxury skin care brands engage with consumers online are changing as conscious consumption and scientific expertise become priorities. Power players like Unilever have made moves into the high-end skin care category with the acquisition of boutique brands, heralding an increasingly competitive landscape.
Harness a multi-faceted digital strategy that embraces conscious luxury and natural organic skin care by showcasing transparency and authenticity. Luxury skin care brands need to build credibility amongst well-informed consumers by demonstrating unparalleled expertise around the science behind their products. Carefully vetted collaborations with online beauty influencers and luxury online retailers become potential components to a well-rounded global digital strategy. Exercise a global mindset when it comes to beauty trends and potential audiences. Search data is an invaluable resource to determine specific, global long-term trends in the luxury skin care category.
kin care remains the key revenue driver in the beauty industry with global sales expected to exceed $130 billion by 2019. The high-end beauty and skin care category is growing; however, in order for luxury skin care brands to capitalize on the growing industry, marketers need to keep abreast of robust, global skin care trends as well as changing consumer demands. The following report identifies longer-term sustaining skin care growth drivers and their broader implications, clarifies the fastchanging relationship between consumers and brands, as well as illuminates the mindset and approach digital marketers need to adopt in order to gain ground in the coming years.
Luxury skin care evolves from an obligation to an experience
he high-end beauty and skin care industry is largely driven by fast disappearing fads. The ability to harness rising, robust trends and understand the bigger implications driving them is vital for brand growth. Search data is a reliable source of information that provides insight into healthy trends by directly looking at consumer interests and considerations. That said, according to Think With Google’s 2017 search trends report, a noteworthy shift in the category points to the evolution of luxury skin care from a fundamental obligation to a sensorial experience.1 Two of the specific trends driving a more playful, experimental approach to high-end skin care is
the growing prevalence of masks and Korean skin care. “Masks” is deemed by Think With Google’s 2017 search trends report as a “sustained riser” — a trend that has seen steady growth over the past years in the industry and is considered a “safe bet”. According to the report, masks have been prominent in Japan over the past year and has recently taken off in both the U.S. and France. Based on global search data, “Korean skin care” has also seen sustained, rising popularity globally. Elevating skin care from a one-step obligation to a multi-sensory experience, the tenets of Korean approach involves an arsenal of varying luxury skin care products that comprise a 7 to 10 step regimen. Lauded by the beauty industry as a game-changer, this involved routine has helped transform a previously underplayed step into a thriving category that consumers are willing to spend time and money on. As both Korean skin care and masks make for online educational and entertaining content, it comes as no surprise that beauty influencers have embraced the trend and consumers have become avid viewers. With a proliferation of social media how-tos on both masks and Korean skin care, it’s clear that digital and social activation has been integral in growing this global phenomenon. Youtube videos have gained traction, particularly for Korean skin care as influencers create longer-form content demonstrating the steps of this complicated routine and which luxury products consumers can use at each step. The video demos — which emphasise not only the steps but also the experimentation
and exploration of various products — have been met with much success. For instance, digital influencer Rachel Nguyen, whose normal videos rack up views in the low six digits, saw almost 1 million views on a video dedicated to the 10 step routine.
Both robust trends point to a bigger shift in the skin care category, and as high-end skin care brands look to acquire modern luxury consumers, marketers need to approach the category with a new focus. There is a growing desire amongst global consumers for skin care to be an experience in and of itself. Highlighting the sensorial experience online and on key social media platforms, like Instagram and Youtube, should be a point of focus for luxury skin care brands. Skin care, and beauty for that matter, has been predominantly a “try before you buy” industry, influencer marketing becomes a desirable way for potential consumers to explore and vicariously test out skin care products from the convenience of their Luxe Digital
mobile phones. In parallel, affluent consumers are also actively seeking tutorials from trusted digital influencers. Thus, engaging in influencer collaborations to produce original, entertaining content centred around globally relevant trends has become an essential strategy for skin care digital marketing. However, influencer marketing isn’t without its pitfalls, and luxury skin care marketers need to be cautious about selecting the right partnerships that will build on existing brand equity and not detract from it. Read our deep dive into the pros and cons of influencer marketing to avoid pitfalls.
Conscious-consumption luxury organic skin care growth
ore so than ever, consumers are interested in, and have access to digital resources, to become fully conscious of the circumstances in which their purchases are made. Conscious consumption has not only impacted fashion and food industries, but also the luxury skin care category. Whether it’s from a growing distrust of brands, a heightened awareness regarding the use of harmful chemicals in skin care or an increased concern with being environmentally
conscious, modern consumers want to understand the origins, process, ingredients and impact of the luxury skin care products they’re investing in. For luxury skin care, this desire has manifested in the overwhelming popularity of all-natural organic products. In fact, a study by Nielson reported that 46% of consumers are willing to pay more for organic skin care products.2 The luxury organic and natural ingredients beauty market has seen 24% growth over a four-year period, and is projected to reach $13.2 billion in 2018.3 Search data also supports the industry’s robust performance. According to the same Think With Google trends report, “organic” is trending as a skin care search term globally and is expected to be a “sustained riser”. The paragon of natural skin care, “vegan” skin care, has also seen 83% growth year over year in the U.S and is starting to rise in France. Luxury skin care marketers need to understand that this movement towards “clean” skin care and organic consumption necessitates more than just vague claims. Although all-natural ingredients and organic beauty products are specific trending elements of luxury skin care, the overarching theme is one around transparency and substantiation. It is without a doubt that the burden of proof falls upon brands, and skin care brands that are thriving are the ones that embrace an unprecedented level of transparency into the entire manufacturing process.
Bloggers,” Caroline Hirons and the likes of popular beauty blogs such as Into The Gloss. Named after its founder, the luxury brand produces, formulates and manufactures products on Harper’s 1,200-acre farm in Vermont. Third-party certifications (cruelty-free, all natural ingredients, 100% vegetarian, etc) are proudly displayed on the brand website, but Tata Harper goes the extra mile to establish transparency. From its Open Lab and Traceability Program to introductions of each member of the manufacturing team, the brand aptly embraces the tagline “Next Generation Beauty” and caters to the level of conscious consumption that modern consumers are looking for. In order to practice conscious consumption, high-end organic skin care brands need to take the initiative to share more about their practices, their process and to prove that their stated purpose is matched by reality. There are undoubtedly benefits for luxury organic skin care brands to adopt the type of radical transparency that connects consumers with the production and manufacturing process. Not only does it add
Perhaps that’s precisely why the luxury skin care and beauty brand Tata Harper has become a bestseller on Sephora and a cult favorite as deemed by the “Queen of Beauty
brand authenticity, but it could also tangibly justify charging at a premium. Indeed, luxury organic skin care seems to be going through a revolution — one that is characterised by transparency in labelling, clean ingredients and an environmentally-conscious ethos. With the power of search behind them, consumers have the desire and the means to understand what goes into their luxury skin care products. Expectedly, this has weighty implications for organic skin care marketers and asks for a cultivation of digital-led transparency and substantiation.
For these digital affluent shoppers, even packaging is a point of scientific concern. For instance, skintellectuals understand that storing a volatile formula in a jar rather than an airtight pump exposes it to oxidation damage. It is evident that affluent consumers are raising the bar when it comes to high-end skin care not only in terms of conscious consumption but also scientific innovation. They’re demanding brands showcase a new standard of expertise and knowledge.
From lactic-acid toners to retinoid treatments, luxury skin care consumers are turning to trusted online sources to make informed choices, learn about the latest science, and find products with key active ingredients to target their particular skin care concerns. As hyper-educated consumers are becoming the norm, experts in the industry have coined an appropriate name to describe those with a pseudo-academic pursuit for scientific skin care knowledge: “skintellectuals”.4
Say a premature hello (launching in late May) to MMHC2, the next generation of NIOD’s best-selling Multi-Molecular Hyaluronic Complex. This updated edition introduces two new forms of hyaluronic compounds, including a first-ever use of direct hyaluronic acid not in sodium salt form, for a combined total of 15 forms of hyaluronic compounds, hyaluronic precursors and a hyaluronic support technology in a peptidecharged delivery system. Even more so, the conversation with NIOD isn’t just one-sided. The brand is open for dialogue and encourages curious shoppers to send any product or skin care questions to their team of “monkeys” — a playful term NIOD uses to refer to themselves.
Luxury skin care science and expertise are a must to appeal to the digital skintellectuals ot only are affluent consumers educating themselves on the origins and processes of all-natural skin care, but those who prefer a science-driven approach are actively searching online to find out the exact science behind their luxury skin care products.
In response, digital-first skin care brands like NIOD (a high-end line from parent company Deciem) have gone to great lengths to establish scientific credibility. And they do this by employing a multipronged digital strategy. From an information-rich brand website to Instagram posts boasting of beauty awards, NIOD practices a no holds barred approach when it comes to disclosing the “why” of their products. The company strives to live up to its tagline, “Skincare for the Hyper-Educated,” and perhaps the most exhaustive deep dives are showcased in the brand’s email marketing efforts. For instance, for the second-edition launch of a popular serum, NIOD sent out an introduction email to its subscribers on the new formulation. This is the
According to a recent study, by ATKearney on Beauty and E-commerce, consumers are seeking more value-add from brands.5 A reported 48% of users say that the messages they receive from high-end beauty brands are generic. In this respect, brands like NIOD are in the vanguard of knowledge-driven content. Speaking to online audiences as a skin care expert and engaging in an educational, informative exchange establishes both authenticity and credibility. Although some may question whether this may to be a case of information overload, NIOD’s approach seems to be working. Recently, The Estée Lauder Cos. Inc. became a Deciem (NIOD’s parent company) investor.6 There are several digital implications for luxury skin care brands. First and foremost, consumers’ appetite for educational content is
voracious. Luxury skin care brands based in science need to communicate their solutions effectively. Consumers have become self-educated skin care experts in their own right, and high-end skin care brands that feel they can charge a premium price point without demonstrating their own expertise will not successfully reach this discerning audience. Even more so, the majority of skin care education happens online. There are clear opportunities to participate in original content creation, quality partnerships and targeted digital activations. Luxury skin care brands can also approach digital strategy through the lens of “online learning.” What type of content, channels and collaborations could provide interested consumers with a mini crash course on the science behind the product? Those that fail to engage and establish credibility in the digital sphere — through 360 activation of owned, earned and paid channels — will struggle to gain traction in the luxury playing field. Affluent consumers who want the latest innovation in skin care solutions don’t just want to hear about the end result, they need to understand the science behind the claims as well.
Luxury online skin care retailers become ever more important for indie brands
rends aside, the luxury skin care market is also experiencing market shifts driven by a few key acquisitions. One of these companies is Unilever, a company that historically hasn’t been a strong player in the luxury category. It formal-
ly entered the high-end skin care market in 2015 with four key acquisitions – REN, Kate Somerville, Dermalogica and Murad.7 This marks a point of departure from the status quo, as the prestige skin care category has thus far been largely dominated by indie brands like Tata Harper and NIOD. As long standing power players, like Unilever, enter the luxury market, they will have the existing infrastructure to rapidly increase synergy, reach, and credibility by building a portfolio of high-end skin care brands. In response, indie brands should be prepared to face increased competition. This outlook on the luxury skin care market is echoed by Carrie Melange, the VP of marketing research firm Kline: “In 2015, the trend towards acquiring successful up-andcoming, innovative brands continues. some of the most notable headlines in the beauty industry in recent months are about who is being acquired by whom. More importantly, these acquisitions feature a new generation of competition for the leading companies — indie brands.” For boutique luxury skin care brands faced with increased competition from companies with extensive scale, partnerships with high-end online retailers is one way to strengthen both credibility and reach. To explain, e-commerce is evolving in almost every category, and the luxury skin care industry is no exception to the rule. As affluent consumers turn their attention to trusted online sources for self-education, shopping online for prestige skin care is also becoming more commonplace. Traditionally, high-end skin
care brands have been conservative on distribution in an effort to assert control over pricing and brand image. However, in reaction to evolving consumer behaviour, many skin care brands have turned to luxury online retailers who have built a level of trust and credibility amongst shoppers. Many digitally-savvy high-end online retailers have actively highlighted their own vetting standards and pushed “expert credibility” to the forefront of their communications strategy. For instance, Violet Grey adheres to
a high standard for their carefully curated products. As explained on their website, “The VIOLET CODE is a testing process and set of standards by which our community of top makeup artists, hair stylists, estheticians, dermatologists, and celebrity influencers distinguish the finest beauty products in the world from the tens of thousands on the market. The result is a curation that is truly the best in beauty from those who know best. All products approved by the VIOLET CODE.” Cult Beauty is another example of a dedicated high-end UK e-commerce site that appeals to luxury skin care brands as a potential distribution partner and affluent consumers looking to shop online. Alexia Inge, the founder of luxury skin care retailer Cult Beauty, said Luxe Digital
in a recent interview, “We always have a full ingredients list for every product on the site, even if we have to manually copy it out from the side of the bottle.” The thorough effort to cater to affluent consumers’ demands makes high-end online retailer partnerships beneficial for luxury skin care brands. The growing prevalence of prestige skin care collaborations with online retailers is more than just a passing trend. According to Anne Zybowski, vice president of retail insights at Kantar Retail, it’s luxury that’s driving digital sales in the drug and beauty industry. “Luxury, in general, has been a big piece that has led in terms of online growth, particularly when you start talking about upscale skin care and cosmetics.” Fueled by changing consumer behaviour, the relationship between luxury brands and e-commerce continues to evolve. As competition heats up with power players entering the luxury skin care category, digital marketers should carefully consider symbiotic relationships with high-end online distributors that enhance the brand’s credibility and reach.
The globalisation of luxury skin care The prevalence for consumers to discover skin care brands online coupled with the rising popularity of global shipping for luxury online retailers enable trends to rapidly cross borders and become international phenomenon. Think With Google’s skin care report for 2017 not only highlighted specific search trends to take note of, but it also acutely pointed out the influence and
transfer of trends across countries. For instance, masks and Korean skin care, discussed at the onset of this report, were country-specific trends that caught on with the rest of the world. Interestingly, both trends originated in Asia and elucidate the potential for Asian trends to take hold in Western markets. In this respect, digital media, especially social media, has truly flattened the world when it comes to the beauty and skin care industry. In order to stay ahead of the curve, digital marketers need to have global awareness and a borderless approach to forecasting. This is especially true for luxury brands vying for the attention of Millennials who lean towards a more multicultural and multinational approach to beauty and skin care. As Karen Grant, global beauty industry analyst for The NDP Group points out, “The impact of the Internet has further changed the way brands engage with and reach consumers. In this environment, major brands are looking… to resonate with younger consumers, who are not only fresh to the market, but more multinational and multicultural.8” As discussed previously, in order to discern fading fads from robust trends, search data is a reliable tool to keep abreast of sustained, rising global trends. Besides global beauty trends, luxury digital marketers should also be aware of global audiences. Under the right context, boutique high-end skin care brands have the potential to capture international appeal and global sales. If aligned with overall business growth objectives, luxury marketers should not only be attuned to global trends, but also consider if and how they should leverage digital and content strategy to capture relevant
international audiences. The way luxury skin care brands engage with customers has evolved beyond just skin deep. As skin care becomes an almost-academic pursuit for many affluent consumers, brands must rise to the occasion. The key drivers for global consumers revolve around sensorial experience, conscious consumption and a growing thirst for skin care science. Luxury skin care marketers will need to engage in a comprehensive digital and content strategy that showcase not only transparency, but also authentic, infallible expertise around their product. From a market standpoint, increased competition from the likes of Unilever creates opportunities for indie brands to collaborate with luxury online retailers in order to increase credibility and distribution. Looking at advantageous alliances, understanding global trends and their broader implications along with a borderless mindset are needed guardrails to position luxury skin care brands for success in the future.
Words by Tian Chang. Photography by Candice Lake.
The Next Wave of Philanthropic Luxury Retail
illennials and digital. These two words have a host of implications and meanings for luxury brands today. However, perhaps the most humanitarian of those implications is the rise of successful philanthropic high-end and avant-garde e-commerce. Millennials are the next power purchasers. According to Forbes, those between the ages of 17 and 34 collectively are expected to spend more than $200 billion annually in 2018 and $10 trillion in their lifetimes. They are also a different type of high-end consumer that care about authenticity and are seeking to engage with high-end brands that align with not only their aesthetics but also with their values. Research has shown, for example, that 87% of Americans will purchase a product because a company advocated for an issue they cared about. Being socially and environmentally responsible is a core brand purpose
built into many new philanthropic luxury e-commerce retailers today. One such retailer is Olivela. The brand sells new luxury products from high-end fashion brands that have opted for this opportunity to give back. Salvatore Ferragamo, Valentino, Marc Jacobs, Dolce & Gabbana, and Jimmy Choo are amongst their providers. The best part is that in partnering with the GOOD+ Foundation, Malala Fund, VH1 Save the Music, and Too Young To Wed, Olivela donates a portion of the proceeds to causes that matter and families in need. To communicate the tangible impact of a purchase made, the retailer equates the sale of an item to an actual benefit. Deemed â&#x20AC;&#x153;The Olivela Effectâ&#x20AC;?, potential customers will see, for instance, that buying one Salvatore Ferragamo bag will provide 26 days of childrenâ&#x20AC;&#x2122;s essentials for families in the U.S. Founder and philanthropist Stacy Boyd met with each of the potential luxury brands to see how they could potentially partner and work together.
MAAARI is a recently-founded boutique luxury brand based in the U.S. that sees social responsibility driving its business model. Founded by 3 American women in honour of their mothers who were born and raised in the Philippines, MAAARI solely partners with local Filipino artisans and designers in order to create a meaningful marketplace around modernising age-old artistry. The unique nature of leveraging digital platforms to showcase a traditional way of life is especially poignant here. The website provides a realistic
glimpse of the lives of the makers, delves into the heritage behind each product made, and tells of inspired collaborations and traditions. From handcrafted textiles, jewellery and homewares, the philanthropic high-end boutique brings a sense of deep-rooted heritage and embraces luxury in its most meaningful form of reimagined, modern artisanal design and quality craftsmanship.
since its launch, earned over $25 million in revenues in 2014 and was expected to double or triple that number in 2015. Its brand devotees include Taylor Swift, Karlie Kloss, Rihanna, Sophia Bush, Lauren Bush and Rosie Huntington-Whiteley.
Considered a veteran amongst our list, online retailer Reformation, a certified B Corp, is a luxury boutique clothing brand that is making sustainability fashionable. Created in 2008 by Yael Aflalo, Reformation creates limited-edition collections made from sustainable fabrics, vintage garments and incorporates â&#x20AC;&#x153;better practicesâ&#x20AC;? in their supply chain in an effort to reduce the environmental impact of fashion. The Reformation website has detailed information on the impact of their garments and an overview of the harmful environmental practices that fuel the fashion industry. With #jointhereformation as their official hashtag, the brand communicates a distinct environmentally-conscious ethos that aligns with the values of many modern women today. According to the LA Times, Reformation raised $12 million in a single venture capital round
With Millennial consumers looking to identify and connect with a luxury brandâ&#x20AC;&#x2122;s values, there is a rising trend of philanthropic luxury retail. Large high-end companies take notice. In the historically exclusive, aesthetically-driven world of fashion, more and more luxury and boutique brands are beginning to seek opportunities to make a realworld impact whether it be socially or environmentally. Words by Tian Chang.
CRM at the Heart of the Luxury Retail Evolution with Pontus Persson
eaders who rise through the ranks to reach a decision-making position are oftentimes the most effective. This is certainly the case with Pontus Persson. Pontus was born in Sweden and moved to France with his parents at the age of 3. After a Bachelor’s degree in International Business Management, Pontus pursued his Master’s degree in Sydney, Australia. This is also where his professional career started as he became a part-time store assistant in retail while finishing his degree. Those first steps took him from Sydney to Singapore and now Dubai, with Ralph Lauren and Bulgari. In his current role, Pontus is leading the development and implementation of Bulgari’s CRM activities across the Middle East. His responsibilities are at the heart of the luxury retail industry’s digital transformation. Simon Beauloye sat down with Pontus Persson for a fascinating conversation on the evolution of luxury retail and the critical role that customer data management plays in it. Luxe Digital: Hi Pontus, great talking to you again. Thank you for taking the time to share your views on the luxury retail’s digital transformation with Luxe Digital. Pontus: It’s great to talk to you too, Simon. Thank you for the opportunity.
Luxe Digital: Let’s start with your journey over the past few years. Your career has taken you from Ralph Lauren in Sydney to Ralph Lauren in Singapore and now Bulgari in Dubai. Can you tell us more about how your role has changed over that period? Pontus: My career really started on the sales-front of retail, for almost 5 years with Ralph Lauren in Sydney and Singapore. Sales was my main role and “raison d’être”. My interest from the start has always been about the people – both my clients and coworkers – and the relationship we had with each others. In early 2014, my responsibilities at Ralph Lauren started to shift a little from pure retail sales to include client relationship management. While maintaining a strong bond with the boutiques and the sales team, I started to focus on the development and nurturing of our special clients and the teams who liaised with them. Ralph Lauren had four luxury boutiques in Southeast Asia, and I was responsible for building a relationship with our VIP clients. Those clients could be regular clients or one-time large spenders. As a result, I had to coach the various
retail sales team on the ground, manage special VIP events, gifting for special occasions, and more broadly relationship building. That’s when my interest in leveraging Customer Relationship Management processes and softwares (CRM) really started. I could see at the time the importance of having a strong knowledge and understanding of our clients and the importance of catering to our clients’ needs in a personalised way. Shortly thereafter, a CRM Specialist role was created with Ralph Lauren in Singapore and I fully transitioned from retail operations to a CRM role based in our regional headquarters. Luxe Digital: How do you define CRM for luxury retail and what role does it play in VIP clients relationships. Pontus: A CRM is first and foremost a tool for companies to gather information about their customers in order to understand their clients better and, ultimately, to cater to those clients in a more personalised way – and of course to generate revenue. With the change in today’s luxury landscape, especially in the clients’
behaviours, I believe CRM has become a crucial tool which should be used and applied at all levels of a retail company: from sales floor to top management. When I took on that role with Ralph Lauren in Asia Pacific, the broader luxury industry realised that our clients were evolving. Luxury customers were traveling more. They had more options to compare and more information to learn about a product before making a purchase. The luxury industry had to adapt and personalise its interactions in order to stay relevant and top-of-mind. That is exactly, in my opinion, why a proper CRM is so critical for every luxury brand today.
Luxe Digital: What role did digital play in your decision to focus on CRM for retail and how does it impact your marketing outreach? Pontus: Digital tools are crucial to stay up-to-speed with the current world. However, I must say, the retail industry has never really
been at the forefront of the digital transformation, and the luxury industry within the retail industry, even less so. But we are catching up and adapting faster than I originally thought we would. Digital is an enabler that increases efficiency of CRM platform for high end retail. A luxury marketer can’t focus solely on digital tools however. While some of today’s digital systems allow for a two-way communication with the end consumer, most of them allow mostly a one-way outreach. While this two-way communication may be more personal and relevant for the customer, it isn’t enough for a luxury brand to rely on. Relationship is the most important aspect of a proper CRM. And no
tools need to remain in front of their customers to build lasting relationships. Luxe Digital: What are some of the most significant challenges that you’re facing when implementing CRM systems to transform Ralph Lauren and Bulgari? Pontus: “Transform” is a strong word. “Evolve” is more appropriate. Change has always been a challenge for any human being. Digital tools, including CRM, represent that change for most people in the luxury retail industry. The implementation of the CRM platforms at Ralph Lauren in Asia represented an important change for a lot of people. First and foremost the management had to understand the importance of CRM and the benefits that the company could gain from it. Ultimately, implementing a CRM represents an extra step and a little extra work from the retail sales teams. Without their participation, no data or information could be collected. This highlights again how critical the human factor is. The same remains relevant today in my current role with Bulgari.
healthy relationship is a one-way affair. Only a human interaction can provide the necessary interaction and emotional connection with clients that luxury brands require.
Because of my previous experience as a sales person myself, I am uniquely positioned to explain the importance of the extra work required by a CRM system to a retail team, in a language that makes sense to them. Being able to rapidly show the outcome of their work, with repurchase rates and revenue increases, is also key to secure quick buy-ins from the teams.
Digital tools and CRM systems are thus essential, but they remain merely tools. Humans using these
Luxe Digital: Looking back, what do you identify as being the most important lesson or learning
opportunity for luxury brands attempting a retail evolution with a CRM system? Pontus: Adaptation has been by far, the biggest lesson for me, and still is today one of the greatest opportunities with a significant potential.
luxury experience. You could walk in the most luxurious boutique in the world with the most high-end products there is, if the service is bad, your experience is bad. Full stop!
does not rule out the other – they should be working hand-in-hand.
When moving from a boutiquebased role to an office-based role, I had to adapt my approach towards my previous boutique colleagues. When liaising with teams from Singapore, Malaysia, Thailand or Vietnam, I had to adapt my approach and delivery in front of them. Most importantly, when moving from Singapore, Southeast Asia, to Dubai, Middle East, needless to say, I had to adapt a lot of things. All this while staying relevant and up-to-date with all the new technologies and the different ways each region uses those technologies. Adaptation, on a larger human scale, is a very important factor, especially in today’s extremely fast-moving world. Luxe Digital: How do you envision the future of the luxury industry? What part will digital play in creating a luxury experience? Pontus: I am of the opinion that brick-and-mortar retail will never disappear, and should not disappear. If you take away the boutiques from the luxury retail equation you remove one of the most important aspects of a luxury experience, and that is the human. I believe that an experience is stronger when it’s shared with someone. This is just as true for a
Digital tools, remain tools, and should be treated as such. Granted, they bring the brands closer to the clients. Granted they allow us to know more and understand our clients. And granted they allow to personalise our campaigns to target specific clients. But they cannot replace the human factor. I find this to be particularly true in the high-end world of luxury that Bulgari and other jewelers represent. For example, a client would never buy a million-dollar set online. Yes, she or he could have its interest awaken after seeing it online and take the final purchase decision in a retail boutique. But if that boutique experience with the retail team is negative, the customer will not buy the product. To invest in our people is the key for any company. And to stay digitally relevant in today’s world, is also the key for any company. However, one Luxe Digital
The Debated Popularity of Influencer Marketing for Luxury Brands The Opportunity
Social media influencers can provide luxury brands with an authentic and engaging story for their high-net-worth consumers, compensating the decline of traditional digital advertising channels. Influencers can take care of the content production and distribution, leveraging their significant online following base to drive reach.
nitially considered just an experimental advertising channel, especially for highend and luxury brands, influencer marketing is now worth $1 billion dollars annually and is the fastest growing form of digital advertising. 84% of brands will integrate an ele-
Influencer-led or co-created content requires luxury brands to loosen up their creative control. Although promising, influencer high-end marketing is a grey market with many pitfalls. Selecting the right type of partnerships, avoiding inflated user base and engagement rates, and measuring a meaningful ROI remain problematic.
ment of influencer marketing as part of their plans this year.9 In this report, we will explore the current state of influencer marketing, the opportunities for luxury brands to leverage influencers’ authenticity and create unique content, as well as the
Identify the right mid-tier or even micro influencers who can create authentic content for your luxury brand. Ensure alignment internally, with clear objectives and KPIs, before engaging with an influencer. Set up a strategic framework that will enable your luxury brand team to think holistically about your marketing strategy. An influencer campaign needs to be part of a broader approach, where each channel can supplement and amplify each other.
potential pitfalls that surround choosing the right influencers. We’ll also discuss the challenges of measuring the true ROI of influencers campaigns and the various KPIs that luxury brands should pay attention to.
The State of Influencer Marketing For Luxury Brands in 2018
Social media influencers offer an engaged online audience. They can lend luxury brands a voice of
Research And Vetting Of Digital Influencers Is Crucial For Luxury Brands
he budget needed to engage with influencers is often a grey area that can vary drastically from one influencer to another, and luxury brands are often at the risk of overpaying. A thorough look at the influencer’s background and fit is the first step to ensuring a successful partnership.
uxury brands have historically approached social media with caution. At first glance, it seems counter-intuitive for a brand built around exclusivity to invest in platforms that are all about accessibility. However, times are changing. Consumers have never been as sceptical towards advertising as they are today. Luxury is no longer about shrouding the brand in mystery, but more about authenticity, quality, and personality.10 Where fashion editorials and high-end magazines used to dominate and drive consumer opinion, the new voice of truth comes from digital influencers. A recent study shows that 92% of consumers trust an influencer’s opinion more than an advertisement or traditional celebrity endorsement.11 Even more so, technology has kept up with consumer sentiment, and with the advent of ad blocking technologies, consumers no longer have to accept intrusive digital advertisements as a fact of life.
authenticity and have the potential to produce original brand materials. In many ways, influencer marketing addresses several challenges that luxury brands are now facing online. Current trends seem to reflect this positive sentiment, with 73% of global high-end brands engaging in influencer marketing in 2017.12 However, adoption of influencer marketing as a part of a luxury brand’s overall digital strategy has been relatively slow compared to non-luxury brands. Out of 300 luxury brands polled, half say that they have only been active in influencer marketing for a year or less. And 59% of those same luxury brands spend less than 10% of their total digital marketing budget on influencers. The continued hesitancy of luxury marketers to invest in influencer marketing comes as no surprise as the influencer marketing industry is anything but clear-cut.
The influencer marketing industry has reached a state of maturity now, with a handful of influencers enjoying millions of followings. Top-tier Instagram celebrities — those who have accumulated over one million of followers — can charge more than $5,000 USD per post. While the number of followers is still an important factor to consider for luxury brands, reach should not be the deciding factor. In fact, high-profile influencers with immense reach not only tend to have inflated rates, but many have worked with too many conflicting brands to still be seen as truly authentic to their audience. Furthermore, according to the New York Times, marketers should be particularly cautious about judging an influencer by the number of followers.13 The demand for influencer marketing has spurred the proliferation of bot-enabled marketing tools that help gain followers and likes for Instagram users. It’s a tactic that, in essence, cheats the game and helps create the illusion of a sizeable online community in order to attract potential marketers. Artificial likes,
the purchasing of followers and even the creation of fake accounts make approaching influencers purely based on the size of their community a risky game at best. As a result, influencer marketing experts at mOOnshot digital recommend their luxury clients to work with mid-tier influencer — followers in the 6 digits — over top-tier influencers. Mid-tier influencers are more dedicated to their community, passionate about what they do and offer a high level of perceived authenticity to consumers. Engaging ten influencers with a combined reach of 1,000,000 followers rather than only one influencer with 1,000,000 followers will result in more traction, engagement, conversions,
clicks and a more authentic narrative.14 Whether luxury brands engage with top-tier or mid-tier influencers, it is critical to thoroughly vet potential partnerships and consider the following: • •
Is the influencer aligned with your brand positioning? Does the influencer have the right demographic of followers that are potential customers for your brand?
Has the the influencer worked with competitors in the past?
Is the content produced by the influencer a match for your brand in terms of visual and tonal quality? Last, consider how the partnership with the digital influencer fits into an overall strategy, as it should not be treated as a one-off collaboration and should amplify other channels in the marketing mix. A fatal mistake for luxury marketers would be to forego the necessary research and instead, reach for a top-tier Instagram celebrity that is in conflict with the ethos and narrative of the brand itself.
main benefits of working with influencers is having quality and original content as a brand asset. Many luxury brands still feel uneasy and cite that one of their main struggles with influencer partnerships is controlling the narrative. Luxury marketers need to remember that influencers are influential because of their perceived authenticity. And collaborations will involve creating content that is inspired by the influencer’s look and feel. Consequently, loosening the reins on creative freedom makes picking the right influencers to work with all the more vital. When the partnership is carefully selected, granting a degree of artistic license to the influencer has resulted in a positive experience for luxury brands: For those that have explored content collaborations, 73% say that influencer produced content is “effective” or “highly effective” for their brand.
Influencer-Led Content Creation, The Next Step For High-End Brands?
hile luxury brands are used to producing branded content featuring celebrities that showcase their product, influencer marketing leans much more towards influencer-led content creation and distribution. In fact, one of the
More sophisticated luxury brands are even exploring collaborations with micro influencers (10,000 to low six digit followers). The appeal of micro-influencers is that they are artists and creators themselves who have carved out a specific niche — whether it be in art, music, fashion or beauty — and often have access to sub-segments that are less obvious. A partnership between a budding influencer with access to a niche audience and a luxury brand with a distinct and unique sense of style has the potential to result in extremely fruitful collaborations and highly original content. When an influencer and a luxury brand can grow together and form a trusting relationship, oftentimes, there is no payment transaction involved.
For instance, Influencer Pari Ehsan (204K followers) has a long-term relationship with Chanel, one in which no payment is involved. She explains: “When the Chanel couture collection comes to New York during Fashion Week for press preview, I’ve established a relationship with them and they allow me to conceptualise a creative shoot around the couture pieces of that season. The relationship came about through meeting with them initially, working with them once, showing them my level of creation, and from that point, it’s been an ongoing thing that we do together.” Luxury brands should think about how brand assets generated from the collaboration can be re-purposed for other channels and marketing efforts. If brands allow (carefully chosen) influencers creative freedom, the authenticity of their work will be beneficial in elevating brand authenticity and should be distributed strategically amongst all relevant brand channels. Collaborating with an influencer should be seen as an investment in quality content. As luxury marketers can no longer depend on “exclusivity” to communicate luxury, execution and originality will be vital in retaining a sense of prestige. The more trusting relationships that luxury brands can build with creatively-driven influencers, the better the chances are for truly original content.
How Luxury Brands Should Determine The ROI of Influencer Marketing
erhaps the biggest struggle for luxury brands has been determining the return on investment (ROI) of influencer marketing campaigns. This is becoming particularly critical as marketers look to increase their budgets for luxury influencer campaigns in the year to come. Industry experts are the first to admit that there is currently no clear-cut way to measure the ROI of an influencer campaign. The metrics that are being used are what marketers consider as “soft” ROI, standard social and online measurements such as growth of a platform, web traffic generated, and content shares. These data points are limiting when it comes to determining the actual impact of a particular influencer or proving revenue-based return.
Jimmy Choo’s influencer marketing ROI Jimmy Choo can attest to the tricky nature of determining the ROI of influencer marketing: The luxury footwear brand is known for investing heavily in influencer trips. This year, the brand took
seven top-tier influencers with a combined global reach of 6.5 million to India. However, when it comes to the ROI, things are foggy, at best. As Vogue reports, “a representative there says these trips are an important part of the brand’s social media strategy, with the objective of creating aspirational and unique content for Jimmy Choo’s audience, but regrettably there is nothing solid to prove a link between this kind of marketing and consumer sales, although they think there is a correlation.”15 From a different perspective, the true value of influencer marketing lies in priorities that are inherently not conducive to hard metrics such as building a strong brand narrative, creating high-quality content, and generating aspiration. As the influencer marketing industry continues to grow, so will the ability to measure its ROI in more concrete terms. At this point of the game, it is up to the luxury marketers to assess what the brand’s strategic priorities are and if the more intangible benefits of influencer marketing is enough to overcome a weak link to the actual ROI.
Luxury Brands To Prioritise Instagram For Influencer Marketing
or luxury brands that have decided to dive into the world of influencer marketing, measurable ROI or not, Instagram is the chosen platform for engagement.
the launch of its new No. 5 L’Eau perfume. The luxury brand invited high profile guests and carefully selected influencers to the South of France to visit its production facility. The chosen mix of top and mid-tier influencers documented their journey and used two brand-created hashtags, #newchanel5 and #chanelgrasse, to aggregate content during the trip. This exclusive (and yet accessible) behind the scenes look garnered high engage-
terms of generating engagement and awareness.
Influencer Marketing on Instagram Projected to Grow to 2.38 Billion By 2019 Influencer marketing isn’t going anywhere but up. The opportunity is immense for luxury brands to find an authentic way to reach new global audiences. With anticipated increased budgets in influencer marketing, luxury brands need to remember that high-quality content is the main factor to consider, not necessarily reach. The key to retaining prestige and a sense of luxury within the context of social media will depend on the ability of luxury brands to select the right mix of partnerships in order to create new, intriguing and authentic content. Words by Tian Chang. Photography by Candice Lake.
Within the the world of luxury, Instagram is by far the dominant channel. A report on New York Fashion week found that out of the 13 million total interactions that occurred on social media during NYFW fall 2016, an overwhelming 97% of them took place on Instagram with only 2% on Facebook and 1% on Twitter.
Chanel’s #newchanel5 campaign Luxury brands are taking advantage of this powerful marriage between influencers and Instagram. To illustrate, fashion house Chanel leveraged this trend for
ment on Instagram. Creating a social media ripple effect, the influencers’ followers were in turn inspired to create their own content around the new perfume. The branded hashtag, #newchanel5, resulted in over 1,600 pieces of influencer and user-generated content. The two hashtags in total received almost one million likes in the first month of the campaign. Again, social media metrics are not traditionally defining markers of the actual impact or ROI that campaigns have. However, within the measurement limitations of influencer marketing, this Instagram-fueled collaboration is deemed as a successful one in Luxe Digital
recently been approached by a designer brand to associate my social profile to their high-end products because they like what I do and the values I embody. They know that I have a loyal following on my social media accounts and a group of contacts that trust my opinions and suggestions. They saw an alignment between their brand and myself.
Redefining Luxury Affinity Marketing with Irene Ho
rene Ho is not your typical luxury professionals. A chartered certified accountant turned business connector of luxury brands and high-net-worth individuals, Irene is as comfortable juggling numbers as she is socialising at luxury events. Irene launched the Singapore’s chapter of The Luxury Network in 2013 and has since grown her affinity marketing network to almost 60 premium and luxury brands. Some of her members include One 15 Luxury Yachting, AIG, De Dietrich, Caratell, Etihad Airways, Kwanpen, mOOnshot digital, Peroni, Runway Moda, Singapore Polo Club, Singapore Yacht Show, Small Luxury Hotels of the World, The St. Regis Singapore and Vision Advisory – to name a few. Born and raised in Singapore, Irene is involved with the local creative community. In 2017, she organised her first fashion show to offer emerging designers a platform to showcase their creations. Together with her business partner, Ray Perera, she is also building up Runway Moda, a new online
platform that showcases fashion collections through runway-videos. In 2017, Irene was named Head of Mission for the Diplomatic Council in Singapore, an organisation that enjoys a UN consultative status. This opportunity opens the door for her extensive high-net-worth network to connect with international diplomats and foster foreign investments. Luxe Digital: Hello Irene. Affinity Marketing is at an interesting cross-road between events and digital, tell us about the most significant changes that you’ve observed since launching The Luxury Network in Singapore? Irene: Companies in the luxury sector are increasingly embracing social media to engage with their affluent consumers online. It is no longer about whether we do social media but a question of how well we do it to drive awareness for your brand and convert it to sales. I also noticed that savvy high-end brands don’t believe anymore in paying bloggers to promote their products or services. They moved away from basic social media vanity metrics that do not equate to tangible retail sales. Luxury brands are increasingly recognising the power of niche influencers. For example, I have
“Humans are ‘social animals’, digital platforms are levers of growth but will never replace in-person interactions.” Luxe Digital: How do you ensure that offline affinity marketing remains relevant for luxury businesses when they increasingly invest their budget on digital? Irene: I don’t expect UHNWIs to stop buying private jets to travel for their meetings just because Skype calls or Whatsapp are available. In my experience, nothing beats a face-to-face conversation. Brands will still need to meet up in person to brainstorm ideas. Fruitful collaborations still require live discussions to clearly understand each other’s objectives. This is especially relevant in the world of luxury and high-net-worth individuals where time is precious. It will always be important for luxury businesses to host events which could include other luxury brand partners. For example, when launching a new luxury product, events can help a high-end brand introduce it to their affluent customers, leverage this offline moment to strengthen their relationship with their audience. Luxury is all about providing customers
with an experience and this is best conveyed in person, through our senses of taste, smell and touch. You can’t have an online affinity marketing collaboration without an offline meeting to discuss the partnership. This is particularly true in the luxury sector where people want to meet you before their decide to collaborate with you. Luxury brands embody the finest in their industry and are the best in what they do. In that regard, you need to build trust and rapport with each other. And that could not happen without spending some quality time together.
I suggested to him that we feature an interview of him and how members would benefit from his services. Shy by nature, he was very reluctant at first but eventually agreed to it. He recently thanked me because his interview was the best performing campaign on his company’s social media accounts. He was so impressed by the design and quality of our magazine, that he decided to create a “coffee table book” about his company and services.
One of the reasons why Runway Moda was created, for example, is to solve the digital challenges faced by designers in the Fashion Industry.
Luxe Digital: Tell us more about the digital challenges that you understand most of your clients are having?
can track video impressions and gain micro insights into high-end product sales by regions.
The platform offers multi-faceted tools that provide a turnkey solution in monetising video-based media. It also serves as a marketplace for both brands and consumers alike. Additionally, through a specially crafted analytical dashboard, users
Humans are ‘social animals’, digital platforms are levers of growth but will never replace in-person interactions. Luxe Digital: In that context, how does digital marketing help you create opportunities for The Luxury Network? And how are your members responding to it? Irene: With the appointment of our new Global CEO, H.E Fares Ghattas, in October 2016, we introduce a bi-monthly magazine. It provides our readers and members with updates on what is happening within our global community. Members can advertise their products and services, promote their events or highlight their key personnel on a complimentary basis. This is a great way to create valuable content and drive traffic to our website while creating awareness for our members and The Luxury Network. Members who are proactive took advantage of this resource without fail for every issue. One of our members is the CEO of a company that provides professional services.
Irene: Interactions with the members of the Luxury Network are primarily about offline networking, so I’m not particularly involved with the digital marketing challenges that their companies might be facing. I am much more familiar with the online challenges that emerging luxury brands are experiencing through my other activities, however. For them, it’s mostly a question of brand awareness and being able to grow an engaged audience on social media. An audience that can then convert into actual sales.
Luxe Digital: You are very active online through your social media. What made you decide to invest more time on your profile and how is it impacting your business? Irene: I am active on my personal social media accounts indeed. It’s a great platform for me to show my personality, what I do, and what I believe in. I don’t post stories related to my family, but everything that I share shows the real me. So I would even sometimes post things I am angry or disappointed with. I do share my achievements as well, such as my interview with the
Straits Times or Bangkok Post, my participation as an Honorary Judge for the Luxury Lifestyle Awards and MPAS Awards. I also talk about the events and organisations that I support and my volunteering work. As I provide professional services, it is important for me to build trust and rapport with my members. I need to be able to know and understand their underlying interests to ensure that these interests are met to achieve a win-win situation. Only then can a partnership happen between different brands. Trust can be built when members get to know the real me. Social media helps me disseminate such information about myself to a wider affluent audience. Social media also helps to keep my members informed about what I have been doing including other members’ partnerships. We often discuss these when we meet face to face later. Last year, for example, I met a prospect who wasn’t sure that he should invest in a membership with The Luxury Network. He found the upfront payment of US$15,000 to be a significant investment. He went home and briefly mentioned it to his 20 years old son. His son Googled me and looked through my Instagram account, then recommended his dad to join my network. He signed with me for a membership and has since been a satisfied member. I have many other similar stories of opportunities that arose thanks to my investment in building my personal brand on social media. The investment in time and energy is thus justified.
“Luxury brands that adopt a sound digital
marketing strategy will be able to reach their HNWIs customers more effectively.” Luxe Digital: What are some interesting luxury trends that you’ve observed as noteworthy for high-end brands to be aware of? Irene: A few of my luxury members emphasize that sales during events are not as important to them as building brand equity and longterm relationship with their affluent customers in Asia. I think luxury brands understand that promoting their products takes time and should be done with tact, not through hard selling. That is also one of the reasons why my business partner Ray Perera and I built Runway Moda. Traditional fashion show events do not provide an avenue for designers to collect orders or sell their pieces off the runway. Some fashion show organisers do provide pop up stores so that attendees can browse the pieces and buy the products after the show. Runway Moda has live streaming capacities where viewers from any location watching the live fashion show can click on items of interest and buy or pre-order them immediately on the video of the runway. With our technology, we want to revolutionise how people make purchases by shortening the buying process.
affluent consumers would want. Luxe Digital: How do you envision the future of marketing to highnet-worth individuals (HNWIs)? Irene: The rise of digital has altered how we live and the speed at which we engage with one another. 93% of buying decisions are influenced by social media for example. HNWIs are a demographic that enthusiastically adopts new technologies because they believe in utilising any resource available to them in order to identify the right decisions quickly, achieve good results and ultimately attain their lifestyle goals. Luxury brands that adopt a sound digital marketing strategy will be able to reach their HNWIs customers more effectively. This is especially important for brands targeting affluent Millennials and Generation Z HNWIs who have grown up in the digital age. For example, by monitoring their customers online behaviour, luxury brands can customise their offering to optimise engagement and create highly personalised value for their HNWIs customers and thereby increasing customer loyalty.
I believe the trends would be for luxury brands to better utilise digital analytics to collect meaningful data and incorporate machine learning to track buyers’ behaviour. This will enable brands to create or suggest complementary products that their
Digital Transformation in Hospitality: A Guide for Luxury Hotels The Opportunity
The high-end hospitality industry continues to grow exponentially, with an estimated US$528B of direct spending on worldwide hotel reservations in 2017, and is projected to grow by over 50% by 2026. Digital brings scalable means at very low cost to all players, accelerating the industry shifts between OTAs and hotel groups, but also between the winners and the losers of the digital transformation.
ore than 1.18 billion people traveled internationally last year, and Asia-Pacific cities collectively claimed almost 25% of those arrivals. This year, growth rates are expected to be 5% to 6%16 and the total spending on travel and tourism should grow by over 50% over the period from 2015
The ability to adapt and evolve digital strategy has become essential in increasing online profits, especially as OTAs are now the fastest growing yet least profitable revenue stream for luxury hotels. Meanwhile, affluent travellers have been empowered with choice. Expectations are changing when it comes to showcasing authenticity, digital user experience and the seamless integration of mobile into every step of the traveller’s journey.
to 2026, according to the World Travel & Tourism Council.17 The upward volume in travel comes with an intensification of digitally-powered customer engagement and decision making. Digital has become a borderless fact of life for luxury hotels in Asia and around the world, but most are still strug-
In order to remain competitive, luxury hoteliers must be flexible and forward thinking in their digital approach. Hotel groups need to take back control of their clients acquisition flow by forming new partnership and alliances to benefit from large customer data, articulating an authentic brand through content marketing, leveraging user generated content, and creatively optimising their online reservation process, particularly for mobile devices.
gling with turning their customers online habits into a profit. With this article, we’ll dive into the rising importance of direct online bookings for luxury hotels. We’ll see in particular how best to create differentiated digital experiences and remain relevant in an ever-increasingly competitive industry. Luxe Digital
The Importance of Luxury Hotels Brand Sites and Direct Online Bookings
t has become clear within the last few years that the relationship between hotels and online travel agencies (OTAs) may not be mutually beneficial. While the contribution of OTAs to hotel sales have continued to increase, making up 12% of all reservations last year, the OTAs commissions have substantially increased in parallel, from 4% in 2010 to
travelers browse an average of 38 websites before actually booking.20 The battle between OTAs and hotels is expected to come to a head in the next few years. In the meantime, as many digital marketers scramble to increase direct online bookings, and thus profitability, the question of how luxury hotels can differentiate themselves and remain competitive is more important than ever.
Luxury Hotels Are Creating Opportunities Through Global Networks and Strategic Partnerships 15% on average in 2018, going up to 30% in some instances.18 OTAs are effectively the most costly booking channel for luxury hotels. But OTAs also offer high-end hotels a significant exposure to their affluent audience. From a hotel customer behavior point of view, the OTA model seems to be preferred, especially for millennials who are used to aggregate sites.19 Recently, however, there has been noticeable push back from luxury hotels as significant efforts have been made to drive direct bookings on their own hotel brand sites. Most notoriously, Hilton launched a campaign aptly called “Stop Clicking Around,” alluding to the well-known statistic that global
ncreased competition has spurred the formation of new alliances. Last year saw a few bold moves from the biggest players in the hotel industry. Marriott announced it would acquire Starwood Hotels and Resorts Worldwide for $14.4 billion, while AccorHotels purchased Fairmont Raffles Hotels for approximately $2.9 billion.21 Newly formed networks signify the start of global partnerships that come hand-in-hand with opportunities to revamp outdated digital capabilities, consolidate reservation systems, expand global customer databases for CRM, as well as enrich hotels’ loyalty programs.
The ability to engage, acquire and retain hotel guests by utilising data on customer’s unique preferences may be one of the most significant advantages that hotels have over OTAs. Aggregate insights combined with real-time travel trends will help luxury hotels better define customer segments, create targeted digital campaigns, and propose differentiated offerings that meet, perhaps even exceed, guest expectations for personalisation at every touchpoint.22 Boutique hotels can also benefit from this same approach in thinking. Symbiotic partnerships with luxury hotel groups, but also high-end businesses (retailers, restaurants, transportation services) along every touchpoint of the guest’s journey will be essential in gaining access to valuable customer data that, in turn, will shape communications, offerings and services. Opportune alliances that enable consolidation, aggregation and management of valuable customer data will be a powerful tool in the battle with OTAs.
Establishing Authenticity for Luxury Hotels Through Digital Storytelling
he need to stand out and connect with travellers through authentic and digital storytelling has never been direr for high-end hotels. Now more than ever, besides factual data and price points, travellers are looking for inspiration when booking luxury holidays online. In fact, 65% of leisure and 69% of business travellers from the U.S. search online before they decide both where Luxe Digital
and how they want to travel.23 Not surprisingly, affluent travellers today are expecting value-rich content that speaks to a hotel’s backstory, everything from its design to the people, the local community to the uniqueness of the experience. The notion of luxury is no longer as simple as hitting a thread count number. Ironically, it’s come down to the showcasing of personalisation — purpose, craftsmanship, community, even artistry — through a mass medium.
The high-end hotel brand website is oftentimes a customer’s first impression of a hotel and it is an essential platform in which to appeal, engage and communicate a unique experience. Only then can a brand hope for conversions. As savvy as today’s affluent travellers are, any sign of generic, gimmicky or bland content on a hotel’s website is likely to pull the property out of the running. Additionally, as travel and hospitality providers become more digitally sophisticated, the competition is shifting to highlight bespoke experiences upon arrival. Content that offers a digital sneak-peak into potential activities is fast becoming a go-to differentiator for luxury hotels. An example of a luxury hotel engaging in authentic digital storytelling is Marriott. The brand published a “city guides” series
featuring local destinations alongside its own properties. A collaborative effort with photographers and travel writers, Marriott was able to position its properties at the centre of culture, community and a host of exciting experiences. The brand also cements its authenticity by encouraging user-generated content (UGC) from social media followers, showcasing the best of the best on a microsite called “Travel Brilliantly”.
Pitfalls to watch out for: As important as it is to bring the brand to life, it is even more important to be truthful to the experience. The bigger the gap between expectation and reality, the more disappointment a customer experiences.24 Particularly for high-end and boutique hotels. Keep in mind that the more platforms there are that encourage travellers to share the good, the bad and the unheard of, the more pressure there is for luxury hotels to walk the walk.
High-End Hotels User Generated Content For The Win
s we briefly illustrated with Marriott, user-generated content (UGC) is poised to be-
come a cornerstone in a luxury hotel’s content arsenal. Content created outside the hotel brand by OTA reviews, digital influencers and guests are increasingly swaying travellers’ opinions and decision making. With UGC, there is an opportunity to leverage the momentum of an existing customer trend, while showcasing authenticity directly from the perspective of hotel guests.
“Social media has become instrumental for luxury hotels not just as a way to connect and nurture relationships with customers but also as a way to get deep insights – through systematic listening – into what customers are into, what cultural experience they expect and the stories they may want to hear when traveling.” David Dubois, Associate Professor at INSEAD in Paris
Perhaps most importantly, the integration of UGC (photos, videos, reviews) on the hotel’s brand site, as well as within social media channels is effective in driving both brand engagement and online Luxe Digital
bookings. To explain, statistics show that overall brand engagement increases by 28% when customers are exposed to a mix of both brand content and UGC. Specifically, in the world of social media, luxury hotel brands that feature UGC in their Instagram posts see six times more interactions per post.25 When it comes to high-end hotel brand sites, studies show that when potential guests interact with UGC, the conversion rate increases by 9.6%. The strategic usage of UGC is undoubtedly beneficial. Not only does it increase engagement and conversions by telling the story through the guests themselves, but it also helps keep customer acquisition costs low. Embracing UGC also has the added benefit of providing luxury hotels with valuable data and insights into their customers. “Social media has become instrumental for luxury hotels” explains David Dubois, Associate Professor at INSEAD in Paris, “not just as a way to connect and nurture relationships with customers but also as a way to get deep insights – through systematic listening – into what customers are into, what cultural experience they expect and the stories they may want to hear when traveling.” However, despite obvious benefits, hotels have been slower than anticipated in integrating UGC within their online channels. According to L2, a New York-based consultancy, an overwhelming 60% of luxury hotel brands do not use UGC on branded pages or sites, and 86% of high-end hotels do not have UGC on their site landing pages. As the global hotel industry works to improve engagement and conversions on their own channels, UGC will become even more important as an authentic source
of information, affirmation and inspiration for travelers. In order to keep up with the pace of digital transformation in this disruption-prone industry, luxury hotel marketers need to pick up the pace or risk being left behind.
Rethinking The HighEnd Hotels Reservation Process
n one hand, there’s compelling content, and on the other hand, there’s convenience and usability. An intuitive user experience is, and will remain, essential to generating direct bookings for luxury hotels. Although a prominent and omnipresent Book Now button has
become widely adopted, ease of booking still remains inconsistent amongst hotels websites. This has noticeable implications. A staggering 81% of potential guests booking travel online abandon their reservation. And 13% of these potential guests point to the hotel booking process as their main pain point. That comes as no surprise when affluent travelers hold hotels to the 2-clicks-to-purchase
transaction standards they’re used to when dealing with beauty or luxury fashion e-commerce sites, for instance. However, as of today, there is still a significant portion of luxury hotel sites that require 4 or more clicks and multiple page loads before a successful booking. Expectedly, extraneous clicks and pop-ups detract from the user experience, and only increases the likelihood of user abandonment. More so than ever, streamlining and innovating at every step of the conversion funnel is key for luxury hotels to remain competitive Relais & Châteaux Boutique hotels and gourmet restaurants have demonstrated innovation throughout their conversion funnel. The property incorporates func-
tionality that users have become accustomed to in their booking process. An example of this is the concept of the “basket”. To explain, Relais & Châteaux attempt to prevent booking abandonment by letting guests add rooms to their “basket”, favourite and share properties (similar to Airbnb) and access the last set of properties viewed. All of these features are not only aligned with digital behavioural trends, but also reduce the amount Luxe Digital
user has little to no patience for anything else: Out of 83% of leisure travellers that encountered a travel site that was not mobile optimised, more than 60% left the site immediately.26
of time a potential customer has to spend restarting their search on the brand site.
Additional food for thought: To generate more direct sales, luxury hotels certainly need to rethink the booking conversion funnel, but they can also innovate around creating another stream of e-commerce revenue altogether. For instance, a regional trend in Asia Pacific has emerged around high-end hotels and homeware. Coupled with the rising expression of “luxury” through thoughtful design and local craftsmanship (think hand-dyed indigo robes), luxury and boutique hotels are becoming shoppable. The Banyan Tree, for instance, sells its toiletries and accessories. Micro-Luxe in Melbourne blurs the lines between the virtual and physical hotel experience further by allowing guests to purchase everything in the room — from the bed linen to the furniture and artwork. It’s time to get creative. The blurring between retail and hospitality, physical and virtual all allow diversified streams of revenue and new opportunities to drive conversion.
The Unstoppable Power of Mobile for Affluent Travelers
stellar mobile-optimised website has become an inescapable mandate for luxury hotels. According to eMarketer, travel bookings made on mobile grew 26.7% year-over-year from 2016 to 2017, across all markets. Furthermore, eMarketer estimates that transactions booked via mobile will grow to almost 70% of total digital travel sales by 2019.Figure 1 With this in mind, mobile experiences offered by luxury hotels are not exempt from usability standards that are commonplace in other e-commerce driven industries. The ever-picky
Another important factor to consider when evaluating the prominence of mobile usage is device switching behaviour, as discussed by author Florine Eppe Beauloye in her book “Shine – Digital Craftsmanship for Modern Luxury Brands. Research has revealed that 46% of travelers who perform search via a mobile device move to a different device to book, thus making the full impact of mobile on decision making difficult to capture.27 Device switching behaviour constrains the share of mobile sales captured by the industry and minimises the true impact on the customer booking experience. Perhaps the statistical underestimation of this powerful platform is reflected in the fact that although over 90% of high-end hotel brands offer a mobile optimised website, there is a considerable drop off in functionality when compared to the desktop version of the hotel site. However, we predict the mobile experience for hotel brand sites in 2018 will catch up to, and perhaps even surpass, that of the desktop experience. Digitally sophisticated high-end hotels are already beginning to utilise the possibilities of mobile. A prime example is Virgin’s hotel app “Lucy.” The app truly lives up to its branding “Makes Things Happen,” enabling guests to perform a myriad of tasks including order room service, book spa appointments, control room temperature and even text with hotel staff and guests.28 In many ways, the
integration and innovation of mobile is the next wave of transformation that holds serious implications should hotel brands fall behind this unstoppable force.
Digital Has Become A Fact Of Life In Luxury Hospitality
he high-end hospitality industry has been fraught with transformations in the past few years, demanding that luxury hotels adapt and evolve their digital strategy and implementation at every customer touch point. The emergence of review websites, the continued tug of war with OTAs and fierce competitors, has only empowered the affluent traveller with choice. In order to remain competitive, luxury hoteliers must be flexible and forward thinking in their approach to content, user experience, and multi-channel presence.
Words by Tian Chang.
Luxury Brands Review their Strategy for China’s Tier 2 and 3 Cities The Opportunity
45% of middle-class consumers in Chinese tier 2 and tier 3 cities are interested in purchasing luxury goods, versus 37% in tier 1 cities. This is especially relevant in fashion, shoes, skin care and cosmetics. 7,000 new malls will be built in China by 2025. Retails are using new technologies to connect the offline and online shopping experiences of luxury consumers. China is a leader in changing how consumers shop.
Counterfeiting is a USD $600 billion per year problem for luxury brands worldwide. China is home to the majority of counterfeit operations that threaten high-end brands’ integrity and value. Overexpansion into tier 2 and 3 cities can dilute a luxury brand and cheapen its image. It can also translate into missed opportunities in tier 1 Chinese cities. Although luxury consumer spending, among the middleclass Chinese tier 2 and 3 cities, is projected to increase, the retail market is constantly changing and new global trade agreements could affect distribution.
Luxury brands need to first establish a strong tier 1 presence with a flagship store. These high-end flagship retail should be used for exclusive events, activation campaigns, and brand labs to develop new products answering Chinese consumers’ expectations. Prioritise your tier 2 and tier 3 cities expansion in China by assessing opportunities through social media. With 800 million+ users, WeChat is China’s largest platform where luxury brands can engage with both high net worth consumers and the Chinese middle-class. 29% of Chinese consumers say they follow what celebrities share on social media. Word of mouth remains very effective across China.
re you familiar with Beihai, Changchun, and Fuzhou? How about Ningbo, Qingdao, and Sanya? While China is dominating the list of fastest growing cities globally, with Beijing, Guangzhou, Hong Kong, and Shenzhen, it is in their tier 2 and 3 cities that luxury brands will find the largest un-
tapped pool of consumers. In this report, we’ll look at how such Chinese cities are influenced by their larger tier 1 counterparts. China breaks up its cities into 4 tiers and ranks top-tier cities as 1. You can see our list of cities in China below for the full breakdown. This report will do the same. Although we will mainly highlight growing luxury consumer trends in tier 2-3 cities, tier 1 markets remain critical for high-end retail development. In many instances, a tier 1 flagship store creates more demand from tier 2-3 consumers. In order to capture all opportunities, it is important for luxury brands to maintain a connection between their major and secondary markets.
There are a number of external factors driving demand for luxury goods in China’s tier 2-3 cities. Since globalisation, fuelled by social media platforms, dominates the global consumer sphere, there is a heavy adoption of Western trends and consumer behaviours in Asian countries, like China. As a result, most of our findings are applicable to luxury retail consumer acquisition plans outside of China. However, the key to any successful marketing strategy is to engage in localised communication methods, even among different Chinese
cities. This report is not a one-sizefits-all template. Our objective is to provide a roadmap as to where new consumers are coming from and what they seek.
Luxury aspirations of a growing avant-garde HNWI Chinese consumer base China is currently the second largest global luxury market after the United States. There are a number of factors fuelling this growth. Not only is wealth increasing in tier 2-3 cities, but social values are shifting. Chinese consumers are now associating luxury goods with status much more than their Western counterparts. For many people in China, acquiring luxury items is a way to demonstrate your progression on the social ladder. Those high-end consumers perceive luxury goods from Western brands as a sign of affluence and power. They will often travel abroad to purchase certain luxury brands. In fact, more than half of luxury goods in China are purchased outside of the country.29
Luxury goods are viewed as an aspirational item and their largest customer base are not the ultra high net worth individuals (UHNWIs). By 2020, most purchases will
be made by those making over $24,000/year.30 As Luca Solca, the head of luxury goods at Exane BNP Paribas, explains, new money make up the bulk of the luxury retail market. “‘Old money’ already has everything and merely buys to maintain their status; ‘new money’ is starting with nothing and its appetite and willingness to spend are many orders of magnitude higher.” This also trickles down to the middle class who wants and desires the same things as those with new money. The difference is they lack the same financial means to acquire in similar volumes. Since brand saturation has become an issue in China, today’s young luxury consumers are seeking logo-free items. They seek subtle, refined, exclusive, bespoke pieces.
“Luxury is now about inclusivity and this authentic connection between the brand values and the consumers’ own personal stories.” Florine Eppe Beauloye, Co-Founder and CEO of mOOnshot digital According to Florine Eppe Beauloye in her book Shine: Digital Craftsmanship for Modern Luxury Brands, “Expressions of luxury, in its new context, have become more subtle and understated, more personal, individualistic and intimate, and less ostentatious.” She adds “Luxury is now about inclusivity and this authentic connection between the brand values and the consumers’ own personal stories.” This speaks to their desire of wanting a brand experience which can enrich their lives. However, there are still those who wish to show their wealth through luxury
products. In an ever-changing market, it is important to not leave out consumers by overly catering to one group as you run the risk of turning off your most loyal audience. Either way, the motivation is similar. The Chinese luxury customer is seeking to feel part of a community through their purchasing behaviour. Those who seek subtle high-end goods wish to be part of a society which can carefully recognise such products. This is in contrast with the other group which wants the world to see how well they are doing.
used WeChat to engage Chinese consumers. Elisabeth Rosen found that “44% of brands had established a WeChat presence. The platform has surpassed microblogging service Weibo as China’s most influential social networking tool, affecting 58% of users’ brand choices in contrast to 52% for Weibo.” During the campaign, the WeChat could be used to receive “digital receipts, which they can present in a store to receive personalised advice. VIP clients can even book in-store styling appointments
Much like Western marketing and communications strategies, Chinese consumers respond positively to influencers, and major PR events and activations. Also, China is investing in large retail malls that will greatly impact the overall purchase experience of luxury consumers. In Shanghai and Hong Kong for example, art malls started to feature Claude Monet’s paintings to attract new customers.
WeChat Chinese influencers define luxury trends
lagship stores in Chinese tier 1 cities are extremely important for a luxury brand perception in the Chinese market. Although overall consumer trends show a clear preference for online purchases, e-commerce makes up a very small part of luxury sales in China. According to McKinsey at the Financial Times’ Business of Luxury Summit, by 2025, only 18 percent of luxury goods will be purchased online.31 Still, based on a Hyperconnectivity survey published by Euromonitor International, 50% of consumers in China and India are making purchases online across all categories. This is significantly higher than consumers in countries like France or Germany, which make only 20% of their purchases via e-commerce.32 Leading online and social media commerce in China are platforms like WeChat, which has a built-in payment tool. In a 2015 campaign, Michael Kors
at boutiques in Shanghai and Chengdu.” Similarly, brands like Burberry, Coach, and Chanel are very active on WeChat. According to The Financial Times, WeChat has grown to 800 million in 2017, a 47% increase since 2015, and is starting to allow European companies to sell goods to Chinese customers.33 Understanding and learning all the platform’s capabilities and functions is crucial for any luxury brand looking to have a major presence in the Chinese high-end consumer market. After all, “92% of global luxury brands now have a WeChat account, marking a dramatic surge since 2014.34”
The strategy worked with sales increasing by over 20%.35 Additionally, to meet China’s growth of 7,000 new malls by 2025, these shopping centres are integrating digital technologies and seamlessly blending e-commerce with brick and mortar. They make great spaces for experimenting with various retail strategies in a tier 2 or 3 city.
Luxury purchase decision in China influenced by brand sustainability and social responsibility
hina is not immune to recent trends in luxury sustainability and social responsibility and consumers care about where their products are coming from. They are especially sensitive to elephant poaching. Driven by attitudes in young consumers, Yao Ming and Jackie Chan campaign against elephant abuse with an organisation called WildAid. The Economist found that traditional middle-class views have shifted. “Despite strong demand for ivory among China’s rising middle class, attitudes may gradually be changing.36” This is important because 73.8% of Chinese consumers are most likely to consider whether a product is fair
admitting green guilt and 54% allowing their ideals to dictate their purchasing habits.37 Aligning with socially conscious ideals is a significant factor to consider when approaching tier 2 and 3 Chinese cities.
The uneven way forward for luxury brands in China
ounterfeit is a USD $600 billion per year business and is one of the biggest issues for the Chinese luxury market.38 Although not a new phenomenon, this is one of the reason why many Chinese consumers make purchases overseas. They feel more confident that they are buying an authentic product. Additionally, when products become popular, the number of counterfeit merchandise increases. Although traditionally sold in stores, the counterfeiting trend has moved into the e-commerce space, and has appeared on WeChat. The biggest problem is that a brand
among the Chinese tier 2 and 3 markets, it could lose its perceived value. This was the case for Burberry. “Consumers are becoming far more discerning and are looking for exclusive luxury products and one-off pieces that are original,” Fflur Roberts, head of luxury goods at Euromonitor International explains. “As brand visibility has grown, so brand cachet has diluted. Kering’s Gucci has suffered a similar backlash to Burberry following its rapid expansion into China. Consumers are increasingly looking for exclusivity.” Analysts have suggested in the past that creating tailored lines for particular countries could help businesses thrive, as luxury consumers want
In conclusion trade, environmentally friendly or donates a portion of proceeds to charity when buying. It is important for any luxury brand to understand what a society values before entering a market. To ensure strong strategic partnerships, adequate research of current nonprofit campaigns should be executed. The demand for a brand to be socially conscious by the Chinese consumer is much higher than those in the United States. When compared with China at nearly 74%, only 53% of Americans
L can lose its sense of exclusivity when counterfeited products enter the mass market. Another somewhat related issue is the risk of brand dilution. If a luxury retailer becomes too spread out
uxury brands have plenty of opportunities for growth in China’s tier 2 and tier 3 cities. However, a strong strategy for approaching consumers is required. While Chinese customers respond similarly to Western consumers and share similar expectations from an avant-garde brand, there are key differences to keep in mind. Although engaging social media influencers and communications strategies are effective
ways to reach the Chinese markets, the platforms and tools require a learning curve. Also, issues like sustainability and social consciousness are of great importance to Chinese consumers. Lastly, there are challenges to overcome like dealing with counterfeit merchandise and potentially diluting your brand. Still, it’s worth the investment, and since Chinese tourists are known to travel for luxury goods, there are possibilities for attracting customers to flagship stores in major global markets.
Bonus: Prioritise your luxury retail investments with our list of cities in China by tier China is too big a market for luxury brands to approach it with a single strategy. Consumers’ behaviours and purchase power will vary significantly from one area to another. One of the most effective way for high-end companies to approach the market and prioritise which regions and cities to target is to divide it up by tiers. The cities tier system in China was originally designed by the Central Government. Cities were organised by tiers according to Gross Domestic Product (GDP), political administration, and population census. The tiering system has since been reused by economists, journalists, and businesses, each with their own classification methodology. You’ll often see additional data such as infrastructure, purchase power, retail sales, income growth, etc. As a result, the list of cities in China by tier is subject to interpretation. You’ll find below the completed list
of cities in China from tier 1, tier 2, and tier 3 based on the latest census by the Chinese Government. Tier 4 cities are arguably too small to justify a luxury brand to invest in a local retail presence.
Tier 1 cities in China Classification methodology: • •
First tier cities have a GDP over USD $300 billion; Tier one cities are directly controlled by the Central Government; The cities count more than 15 million inhabitants. The Tier I cities are Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Hangzhou, Wuhan, Tianjin, Nanjing, Chongqing, Xi’an, Changsha, Qingdao, Shenyang, Dalian, Xiamen, Suzhou, Ningbo, and Wuxi.
First-tier cities are the most developed urban areas of the country. Income levels are significantly higher than the Chinese average. Luxury consumers are wealthy with sophisticated expectations.
This is where the high net worth individuals and the new affluent generation Z consumers most often live. As a result, Tier 1 cities exercise a significant consumer and cultural influence on the luxury customer trends for the rest of China. While tier 1 cities in China offer the largest luxury consumer base, they are also where the competitive landscape is at its peak. It is in these first-tier cities that both domestic and international high-end brands will first invest.
Tier 2 cities in China Classification methodology: • •
Second tier cities have a GDP of USD $68–299 billion; Tier two cities are provincial capitals and sub-provincial capitals; The cities have between 3 to 15 million inhabitants. Tier 2 cities include Beihai, Changchun, Fuzhou, Guiyang, Haikou, Harbin, Hefei, Huhhot, Jinan, Kunming, Lanzhou, Nanchang, Nanning, Sanya, Shijiazhuang, Taiyuan, Urumqi,
Wenzhou, Yinchuan, Zhengzhou.
Second-tier cities started receiving increasingly more investments over the past ten years. As a result, they are also where we observe the fastest growth in luxury sales. While the local consumer behaviour is evolving rapidly, high-end purchase trends tend to be similar to tier one cities.
significantly lower than the other tiers, making them potentially very profitable. Word by Jacob McPherson.
The competitive landscape in tier 2 cities in China isn’t quite as saturated as their tier 1 counterparts, but the growth trajectory will probably bring them on pare in the next ten years. It is important to note that there are substantial differences between cities that are grouped in this second tier, particularly when it comes to purchasing power and consumers’ expectations for luxury goods.
Tier 3 cities in China Classification methodology: • • • •
Third tier cities have a GDP of USD $18–67 billion; Tier three cities are prefecture capital cities; The cities have between 150,000–3 million inhabitants. Tier 3 cities in include Daqing, Weifang, Yantai, Hohhot, Lanzhou, Xuzhou, and a 125 more.
While they are obviously smaller and less developed than their tier 1 and tier 2 counterparts, the largest tier 3 cities in China are starting to attract increasingly more investments as luxury brands want to broaden their retail footprint. The operating costs in tier III are
A Digital-First Outlook on Luxury Marketing with Simon Beauloye
oday we have the great pleasure of talking with Simon Beauloye, co-founder & CTO of mOOnshot digital, a luxury digital marketing agency headquartered in Singapore. Simon is working with some of the largest and most established luxury brands in Asia, helping them navigate an exciting time of digital transformation within their organisations. Prior to joining mOOnshot digital, Simon worked at Google for over ten years across Europe, the MiddleEast, and Asia. In his last position at Google, Simon was leading a $1B+ global business, managing the international marketing team for publisher solutions. Aside from mOOnshot digital, Simon is a board member and mentor for several startups in Singapore. His portfolio includes businesses in technology, e-commerce, media, and education. Simon is also the distinguished recipient of countless awards, including Asia’s Top 50 Brand Leaders Award that recognises talented leaders with a visionary approach, and the Better than the Best Google Award delivered by Google’s Senior Vice President and Chief Business Officer to honour those who have made a particularly outstanding contribution to Google. Luxe Digital: Hello Simon, thank you for taking the time to talk to us. It’s great to have you as one
of our first guests for this opinion series featuring digital and luxury thought leaders.
are usually eager to delegate anything that isn’t core to their operations to third-parties.
Simon: Thanks Samantha, great to be here.
That integration and attention to detail characteristic of the luxury industry provide high-end companies with significant leverage and power. When the entire organisation has a clear vision and understanding of what needs to be delivered, luxury brands are uniquely positioned to deliver flawless execution against their vision. And this can be seen across the entire customer experience.
Luxe Digital: Your entire career has been very much at the avantgarde of digital, first at Google and now at mOOnshot digital. What are your views on the luxury industry at the moment? Simon: It’s been fascinating for me to work more closely with luxury brands since joining mOOnshot digital. My experience for the past year has certainly changed some of the preconceptions I’ve had about the industry. What I’m seeing across the board are companies with rich traditions and, oftentimes, a long history of successfully conducting their business in a certain manner. The particular care and attention that they pay to their products and services are very impressive. Most companies in the luxury industry are vertically integrated to guarantee the same level of craftsmanship throughout the entire customer experience. That’s very different from the digital-first technology companies that I work with. Technology businesses
As a digital agency, this is most visible to us in the marketing campaigns that we run for our clients. These campaigns, in most cases, articulate strong messaging around core brand values and play deeply on consumer emotions. The exceptional level of visual and content quality that is required to support these campaigns is what makes our job interesting. There are obviously pros and cons to the luxury industry’s approach to digital. It is worthy noting that even though luxury brands historically value heritage and tradition, as companies are fighting to remain competitive, they do understand the need to evolve and embrace change.
Luxe Digital: That’s an excellent segue to our next question. What do you consider to be the biggest threat to the luxury industry in Asia? Simon: Most consumers in Asia were exposed to international luxury brands only a generation or so ago. Because of this, consumers often don’t have the same personal history with luxury brands as those in Western countries might have. The research we’ve conducted at mOOnshot digital certainly suggests lower brand loyalty in Asia compared to other regions. As a result, luxury sales are significantly more affected by rapidly shifting trends. And these trends are usually defined by influencers who are outside of the traditional realm of legacy luxury brands. Digital thus poses a new challenge for luxury brands who see customers in Asia rapidly moving from one brand to another. A lack of brand loyalty means that digital newcomers can quickly gain scale and market shares when they are able to be at the forefront of customer trends. It’s important to point out as well that although some of these new companies position themselves as high-end brands, in reality, they have very little to show for it in terms of quality or authenticity. We’ve seen countless examples of companies inventing their history out of thin air and focusing all their attention on branding and marketing instead of delivering a remarkable product to their clients. This is damaging for the industry as a whole, as the perceived value of luxury goods for consumers can be negatively affected as a result.
transformation starts gaining momentum, we can develop the right marketing strategy for luxury brands to grow.” Luxe Digital: What can luxury brands in Asia do to have a stronger voice online and to shape these trends? Simon: The single most important thing, from my experience, is for luxury companies to have a strong internal vision and willingness to operate a digital transformation of their business. It’s not an easy thing to do for large organisations. But if that vision is in place, then everything else becomes easier. Senior leadership and marketing teams can more rapidly take decisions by understanding if they are aligned with the company’s vision. Once that digital transformation starts gaining momentum internally, we can develop the right marketing strategy for luxury brands to grow. In that regard, one of the biggest opportunities that I’m seeing is around customer data, digital relationship management, and personalisation. Luxury brands often have a significant competitive advantage with the sheer size of their physical presence. If you look at most luxury retail stores in Asia, they attract a lot more visitors than their European or North American counterparts. Most of these visitors are coming to experience the brand and be delighted. I think there is a largely untapped opportunity for luxury brands to actively collect and manage consumer information, and offer a tailored digital experience that
is on par with the quality of their products. This is not just pre-sale. The postsale engagement is just as critical to developing a deeper relationship with each client, one that is personalised and bespoke thanks to carefully executed marketing automation. Luxe Digital: Based on the above, what are your thoughts on the future of the luxury industry in Asia? Simon: I don’t expect radical changes to happen overnight, but there is a growing trend of winners and losers in the Asian luxury industry. The digital transformation of the field is only accelerating that trend. It’s never too late for a brand to re-calibrate, but it will become increasingly complicated for those who aren’t already in the digital game to finance a large scale transformation. In parallel, customers in Asia are becoming gradually more apt at understanding and identifying true value. As new consumers in emerging markets gain access to the purchasing power necessary to access high-end brands, and as information is more easily accessible and shareable, luxury companies that are able to offer superb quality and a brand that consumers can identify with will grow. There is plenty of room for newcomers to gain market shares in that space by offering new products with a focused digital marketing strategy. The challenge is in finding an authentic voice and delivering a product that is rooted in quality and craftsmanship. On the other hand, more established luxury companies have the
resources and credibility to achieve broader reach, but their internal processes will remain their true challenge. Luxe Digital: Thank you so much for your nuanced perspective, Simon. I would like to end this interview by leaving our readers with a bit of insight into your decision to invest in the creation of Luxe Digital and your aspiration for the site. Simon: We’re lucky at mOOnshot digital to be at the forefront of the luxury industry’s digital transformation. Every day we see the successes and failures of companies as they adapt their operating models for new customer expectations. With the launch of Luxe Digital, our goal is to help the senior leadership teams and marketing executives of premium and luxury brands to navigate the digital transformation of their business. We want to equip leaders and entrepreneurs with the right tools. We want to generate new conversations. We want to ask the hard questions that are necessary for the long term survival of a business. There are several excellent publications that are already discussing the business of luxury, but none that is specifically articulated around the digital transformation of the sector. We want to leverage our a vast network of experts and professionals to help luxury leaders with their decision making. And quite frankly, we’re also very proud of the excellent team of copywriters that we have at mOOnshot digital and we wanted to challenge them with a new project :)
What Wealth Managers Can Learn from Luxury Digital Marketing for the High-Net-Worth Millennials The Opportunity
The flexibility and ubiquity of the internet offers a host of digital marketing opportunities for luxury wealth management firms to more efficiently and accessibly reach their highnet-worth client base. The development of automated advisory services and data analytics platforms can equally help wealth managers to cut costs and more accurately target their marketing efforts.
chnology has been a disrupting influence in the luxury financial services industry for many years, and now, as computing power accelerates exponentially, the adoption of technologies such as cloud computing, artificial intelligence, and voice recognition will continue to shape the way we manage our finances. Cer-
The luxury wealth management industry has been slow to embrace advances in technology, lagging behind other financial service providers. Older, more traditional investors remain distrustful of automated services and prefer to interact face-to-face with their advisor. Younger consumers continue to be distrustful of financial professionals as a result of the 2008 financial crisis.
tain digital services and automation have already become the norm within the retail banking industry, with high-networth consumers expecting to be able to make payments digitally, access their bank statements online, and seek guidance through their web browser or smartphone. These rising expectations of accessibility
Build consumer trust by creating an authoritative and informative online presence through reliable content. Establish an effective and appropriate means of collecting and analysing client data so that luxury services can be marketed more accurately. Creating hybrid high-end services that combine the accessibility of online advisory services with the tailored service of traditional wealth management firms.
have made it necessary for financial service providers to innovate or risk being left behind. This digital evolution has seen a swathe of technology-backed start-ups emerge in recent years, seeking to reimagine the way we interact with our money across all areas of the financial services industry. Despite being slower Luxe Digital
to exploit these improvements in technology, the luxury wealth management sector is increasingly being disrupted by firms offering a fully online experience, or a more balanced hybrid service. Notably, so-called ‘robo-advisors’ such as WealthFront and Betterment, that provide a largely automated service are driving an interest in digital passive investing, with Deloitte predicting that the robo-advice industry could hold as much as $7 trillion US assets under management by 2025.40
However, it is not only in the provision of luxury services that wealth management firms are embracing the technology revolution. The online demands of a growing affluent millennial client base have seen wealth managers adopt luxury digital marketing strategies to reach high-networth consumers, target their services effectively, track consumer behaviours, and analyse client data. This digital shift is expected to continue, with a 2014 Global HNW Insights Survey finding that 64.2% of high-net-worth individuals worldwide expect their future wealth management relationships to be managed primarily or entirely online. As such, the employment of effective digital marketing strategies will increasingly be a key factor in the retention and attraction of wealth management clients.
Wealth Managers adapting to the re-wired affluent Millennial investors
meetings with their advisors, or complex investment strategies, instead preferring simple, aroundthe-clock guidance across multiple online and mobile channels.
The re-wired investor is characterised as being more sceptical than the traditional investor, being more likely to consult multiple sources, including peers, before deciding upon a wealth management strategy, and want products that are tailored to suit their individual needs and circumstances. This ingrained scepticism appears to extend to their perception of risk, which the re-wired investor views as a downside to investment as opposed to a measure of market volatility. According to Deloitte, this has already led advisors to shift their focus to the promotion of strategies that value downside protection at the expense of strategies that emphasise the management of risk through diversification.42
he clientele of wealth managers is getting younger. Millennial luxury investors are expected to be the largest adult segment by the end of the decade, and luxury firms are actively pursuing the business of so-called HENRYs – high earners not yet rich.41 The introduction of digital services to the wealth management space has attracted a generation of investors to the market who value the accessibility, efficiency, and cost-effectiveness that technology provides. And in turn, the rise of this new clientele has driven a swell in digital innovation among wealth managers, and an increased adoption of digital strategies in a bid to appeal to younger high-net-worth consumers.
Collectively termed the ‘re-wired investor’, this new breed of client typically comprises younger affluent Generation Zers and Millennials, as well as millennial-minded baby boomers, who expect wealth management services to be as accessible and intuitive as the non-financial digital services they use on a daily basis. These clients do not want lengthy in-person
The demands of this digital native consumer base have already driven considerable change within the luxury retail banking industry, which has experienced an exodus away from in-branch services in favour of digital and mobile banking platforms, with around 60% of all banking transactions now being completed online.43 The growing preference for digital transactions has seen a collapse in physical banking infrastructure in developed markets. In the UK alone, more than 1,000 high street bank branches were closed in the two years between 2015 and 2017 as mobile banking became the norm, with HSBC, one of the country’s market-leading institutions, shutting around 27% of its branch network.44
Banks have also created innovative luxury digital marketing strategies that support this modified operating model. Bank of America, for example, opened a Pinterest page in 2015 that aims to provide younger customers with useful information on money management, while Barclays launched its Digital Eagles campaign through which it provides downloadable banking content to communities across the UK. A similar growth in digital marketing is underway in the wealth management sector, with 69% of wealth management firms identifying the development of digital services as a top-three priority in the medium-term.45
which found that around 59% of wealth management highnet-worth clients believe that websites and mobile channels will be their principal source of information in the next two to three years, compared to just 26% who expected to receive guidance primarily from in-branch representatives.
“Wealth managers must now adequately address the two central pre-purchase concerns of the modern wealth management client before interacting directly with highnet-worth consumers: transparency and applicable intelligence.” Simon Beauloye, co-founder and CTO of mOOnshot digital
The digitalization of the luxury wealth management pre-purchase experience
or wealth managers, where this transition to digital marketing has become immediately apparent is in the pre-purchase process. Professional advisors are no longer a consumer’s sole, or even preferred, source of information on current investment strategies, with the internet offering an abundance of contemporary content, data, and analysis upon which investors new and old can base their financial choices. This transition from direct interaction with professional advisors was highlighted in a 2016 EY survey,
As explained by Simon Beauloye, co-founder and CTO of mOOnshot digital, the “wide-scale preference for on-demand, digital information – with consumers able to compare the services of competing providers side-by-side through customer reviews, media coverage, and corporate websites – has led to the creation of both a pre-purchase experience that is based almost entirely online, and a client base that is broadly more informed than in previous generations.” In this evolving climate, a wealth manager’s careful curation of their online presence has become a key factor in establishing consumer trust and securing recurring business. To stay competitive, Simon Beauloye continues, “wealth managers must now adequately address the two central pre-purchase concerns of the modern wealth management client before interacting directly with high-net-worth consumers:
transparency and applicable intelligence.” While successful client-advisor relationships have always been based on trust, among the burgeoning population of affluent millennial investors – whose perception of the financial industry remains skewed by events leading up to the 2008 financial crash – more than ever that trust must be earned. Today, trust is largely synonymous with transparency, which the majority of consumers prioritise over personal interaction with advisors. This is true particularly with regard to fees, which to many investors remain a mystery – according to the above-mentioned EY survey, around a quarter of current wealth management clients are still unaware of how they are being charged. A simple way then for wealth managers to establish a basis of trust is by offering an honest and accessible explanation of their fee structure to potential clients online, while more forward-thinking firms can go further by encouraging open discourse through social media and online community forums.
The reliable and honest provision of information is not only a matter of transparency, however. With consumers favouring online and mobile channels as their principal source of information, the pre-purchase experience also presents an unprecedented opportunity for luxury investment firms to establish themselves as reliable Luxe Digital
providers of quality content and effective, actionable advice. Used intelligently, these digital information channels, which can be curated and controlled in-house, can both satisfy a consumer desire for transparency and go some way to establishing individual firms as reliable and authoritative sources of information on developments in the wealth management industry as a whole.
Content and the fall of the wealth management salesman The ubiquity of the internet has seen wealth managers turning more and more frequently to online and mobile channels as a means of attracting, engaging, and converting clients at the expense of traditional salesmen, whose role in the pre-purchase process has diminished significantly in recent years. At its most basic, the process of delivering digital content begins with the creation of compelling, informative reporting, either through a blog or through more detailed papers that can be shared online. Major wealth management groups such as BlackRock, UBS, and State Street regularly publish online content that cements their names in the minds of clients as industry experts. The primary method of delivery for digital marketing content remains the corporate website, which has become a staple across most of the financial services industry, serving as a centralised repository for branded media and marketing. However, several prominent wealth managers have developed more innovative ways of using their websites to offer guidance and promote their services than
through a simple blog. Goldman Sachs, for example, publishes a series of videos and interviews, while JP Morgan releases a regular audio podcast. Other firms choose to share infographics that display market trends or offer regular investment tips to clients. These online methods are effective in capturing current investment concerns and trends, and can be delivered directly to the screens of consumers. While the corporate website continues to be a key marketing tool, consumers now expect to be able to access relevant content across multiple channels. Firms are increasingly recognising that consumers have moved much of their life online, spending a substantive portion of time using smartphone apps and browsing social media, and are adjusting their marketing efforts to enhance their presence in these areas. McKinsey reports that the mobile interaction share, currently at around 35%, is the fastest growing channel across all financial services, while a recent study by Assetinum found that in Europe more than 40% of highnet-worth individuals under 50 view social media as an important channel for communicating with their bank.46 By exploiting these channels through the development of mobile apps and the creation of accounts with platforms like Facebook, Twitter, and LinkedIn, high-net-worth finance firms are able to insert their brand and expertise into the day-to-day interactions of their clients, reinforcing their standing as trusted industry experts. Wealth management providers have also begun to embrace the relatively nascent trend of native advertising, creating branded content that is published by and
in the style of third-party content providers with which consumers have an existing relationship. Merrill lynch, for example, ran a piece with cbssports.com in 2016 that redirected to a branded article on the costs of a destination wedding, while JP Morgan previously used a BuzzFeed spot to promote its Freedom Unlimited card. The goal of these articles, as before, is to cement a brand identity into the ecosystem of a consumer and build trust among a target client base.
Analytics, data, and personalization are needed to engage highnet-worth Millennial investors
by-product of consumers having moved a significant portion of their lives to the cloud has been the creation of enormous amounts of digital data, with every social media interaction, browser click, and mobile download producing a digital footprint. Online interactions with boutique wealth management firms similarly produce data, and tech-savvy firms are already seeking innovative ways that they can use this data to identify trends, patterns, and relationships that help them more accurately deploy their marketing efforts. Big data has already driven wide-scale change in the way businesses monitor consumer Luxe Digital
behaviours across multiple industries, from retailers to healthcare providers. Simon Beauloye expects wealth managers to employ predictive, algorithmic analytics systems in much the same way as a means of accurately assessing the investment style, lifetime value, and risk tolerance of both existing and potential clients. The insights gained from this analysis can be coupled with automated email marketing or mobile applications in order to promote appropriate products and services to client sub-groups.
ury firms will transfer more and more of their brand marketing content online as they seek to cater to a younger high-networth investor audience. Mainstream wealth managers such as Switzerlandâ&#x20AC;&#x2122;s Julius Baer are ahead of the curve in this respect, providing multi-channel content and interactive platforms targeted specifically at affluent millennial clients. Staying up to date with advances
This abundance of data and the increasing sophistication of modern computing has also sparked the rise of digital wealth managers, or so-called â&#x20AC;&#x2DC;robo-advisorsâ&#x20AC;&#x2122;, online platforms that provide automated financial and portfolio management advice to consumers online. And while older investors have been reluctant to put their trust in automated platforms like WealthFront and Betterment, the growing pool of digital native wealth management clients are more open to such services. According to a 2016 survey conducted by asset manager Legg Mason, which polled over than 1,000 investors between the ages of 18 and 39 years of age, 85% of respondents said they were comfortable receiving automated advice.47
In conclusion: Digital at the service of premium wealth managers
he digital revolution is set to continue within the wealth management sector, following on the heels of changes already made to the retail banking sector. Automation will continue to be developed as an effective customer service tool, and lux-
in technology will continue to be important for firms that wish to retain a competitive edge, with the wealth management industry likely to follow new trends in digital marketing that take advantage of augmented reality, virtual reality, and live streaming. The sector, however, already has catching up to do, with these new developments expected to be years away from effective deployment. Words by Simeon Birkett.
Storytelling and Showrooms: How Generation Z is Transforming the Future of Luxury Retail
igh-end retailers are experimenting with a transformation of their storefronts into highly-curated showrooms centred on their brand storytelling to cater to Generation Z consumers. In this experimental market where content adds value, some brands are bringing online engagement models, like members-only subscriptions, to physical spaces. Digital retail powerhouses like Amazon and technological advancements in augmented reality (AR) and virtual reality (VR) are shifting how consumers approach retail, particularly shoppers aged 20 years and younger. The Generation Z demographic will influence and change how all luxury retail needs to shift in the coming years. According to a research conducted by Accenture, “Generation Z” shoppers care less about brand loyalty, are much more influenced by social media and open to new concepts, and buy impulsively. They want a quick and convenient shopping experience. If delivery times are too long or aren’t free, these consumers will look elsewhere. Although most Generation Z buying activity occurs online, the majority of these individuals still want to visit a store before making a purchase. They are interested in assessing all contextual
information surrounding a product and want to feel as though they are making the best possible decision. Factors taken into consideration include blog reviews, influencer recommendations, social media likes, comparison shopping, and customer feedback. According to a study from mOOnshot digital, Generation Z consumers crave an interactive and personalised approach focused on authentic, original brand stories. They want to be sold on a life-changing experience, rather than the product itself. There has to be a sense of purpose and personal connection to what is being purchased.
Amazon is already testing out some of these insights at its recently opened bookstore in New York City. They are connecting online and offline experiences by physically displaying top-rated books alongside customer reviews. Another unique element of Amazon’s store is how Prime members are treated differently than non-Prime customers. Those with Prime often pay less for products and
are treated as VIP shoppers. This approach is one way of solving the Generation Z problem of brand loyalty. These high-net-worth individuals (HNWIs) are interested in subscription-based shopping clubs like Birchbox, and are willing to join life-enriching membership. With fashion, touching and experiencing a physical product is still relevant to consumers – especially those purchasing luxury goods. Although Bonobos is not a high-end brand, there is much to learn from its showroom-based approach. PWC’s 2017 Retail Trends Report cites Bonobos’ Guideshops as a way to solve many problems experienced by retail stores. At these Guideshops, customers can try on clothes in person which means fewer online returns. Additionally, since no products are being stocked and sold, the footprint of a Guideshop is much smaller than a traditional retail space. Also, since customers have their selections shipped to their homes, Bonobos is able to create profiles for easy re-ordering and follow-up marketing. The showroom / art-gallery merchandising concept is not necessarily new. High-end multibrand shops like Dover Street Market, Colette, and Opening Ceremony have found success in cultivating a unique experience for Luxe Digital
years. Demand is driven by intrigue and exclusivity rather than strictly sales. Although Colette recently announced it will be closing after 20 years in business, the high-end Paris-based retailer is still worth mentioning. The reason why the owners decided to cease operations is unique. â&#x20AC;&#x153;Colette Roussaux has reached the time when she would like to take her time, and Colette cannot exist without Colette,â&#x20AC;? the statement read, referring to the store requiring its founder. Colette is acknowledging the curatorial power the founder brought to create a level of trust with customers. They felt that would be lost if the name was licensed to another company. In considering all of these elements, the future of retail for any brand, including luxury, is dependent on a seamless integration between online and offline luxury experiences, and requires a specific identity. To meet new demands, any physical retail space must take cues from the internet to inform how and what is being sold. The shopping experience should be an extension of what is widely available online in a much more digestible, easy to understand format. This could include adjusting prices on a weekly basis, changing inventory daily, offering experience-based subscriptions, and/or aggregating social media activity for a particular product to show customers how it could enrich their lives. Consumers are exposed to a massive amount of information on the internet; the retail experience should be the refined antithesis of this oversaturation. Words by Jacob McPherson.
6 Steps To Opening a Fine Dining Restaurant: The Best Pre-Launch Marketing Strategy The Opportunity
There is a strong high-end foodie culture growing online, fueled by social media. Highnet-worth individuals are looking for new and innovative dining experiences. 81% of luxury consumers search for fine dining restaurants through mobile apps and 75% make decisions from those search results. There is immense potential for upscale restaurants to reach customers prior to launch. Restaurant owners can now showcase their culinary journey to an audience seeking experience-led dining.
59% of newly opened high-end restaurants fail in their first 3 years. Most of them close down after just a year. The launch roadmap for a fine dining restaurant is fraught with complications and complexity. Digital marketing is oftentimes left as one of the last components that’s taken care of. Although understandable, this reality leaves luxury restaurants at a significant disadvantage. It undercuts their opportunity to build restaurant awareness pre-launch and gather momentum ahead of their opening day.
Establish a foundational digital marketing strategy as early as possible. Upscale restaurants need to highlight and communicate their unique value proposition online to their luxury clientele even before their official launch. Instagram and Facebook are the social media levers to pull to generate appeal for fine dining restaurants. Phased soft launch events involving targeted groups of digital influencers and food bloggers are effective at building online reviews and awareness before opening day. When introducing a new culinary concept, a preview menu lowers the barrier to trial and improves review rankings.
he concept of hospitality in the fine dining industry is nowadays as much personal as it is digital. As online channels become a primary source for potential customers to learn about and engage with fine dining restaurants, knowing how to leverage digital marketing prior to launching a new venue is essential. Most new high-end restaurants are still failing at this game however, with 59% of them closing down in their first three years, most of them in their very first year.48 In fact, in the often long and complicated roadmap to launch, digital marketing is usually one of the last pieces to be addressed by fine dining restaurateurs. This report aims to introduce the essential digital foundations that need to be in place prior to opening a new fine dining restaurant. With our phased soft-launch approach that works in tandem with traditional PR opportunities, luxury restaurant owners will be able to build and amplify awareness ahead of their opening day.
The digital high-end foodie culture: Marketing strategy to engage with customers prior to opening fine dining restaurants
n this digital-first era, many people see food as an engaging, sensorial experience that is as much devoured in the digital sphere as it is in the physical space. Millennials have been leading this foodie movement, making mealtime “Instagrammable” affairs
that are visually appealing and experience-led. Customers have a desire to share their dining experiences and actively seek out new culinary experiences on Instagram. The numbers support this trend — a quick look on the social media platform reveals almost 225 million posts with the hashtag #food. Additionally, Millennials currently spend more money eating out than any other generation, with 54% dining out at least three times a week.49
Whether it’s due to the valuation of unique experiences as the highest form of social currency or the sense of “community” that comes from shared social media experiences, this robust movement has created an opportunity for high-end restaurants with the right marketing strategy to capture receptive culinary experience-seekers and generate appeal for an upscale restaurant, prior to opening. It all comes down to having the right fine dining restaurants marketing strategy. This burgeoning cohort of foodie restaurant-goers are not only willing to spend on food but also see dining out as a journey that extends beyond the final plated presentation. Understanding the origins of food — the entire farm-to-table, root-to-flower and cultivation-to-creation process is of interest to the potential customer and is a key factor in deciding where to dine. In fact, 80% of Millennial customers want to know
more about process and origins — how the food is grown and where it’s sourced. For the luxury restaurant industry, never before has the “where” and “how” of food been in such high demand in the digital world. In many ways, understanding the culinary journey speaks to a sense of authenticity that Millennials crave. Even more so, customers expect to have access to this information, whether it be on a website or social channels, from the convenience of their mobile phones. Studies show that 81% of consumers search for restaurants through mobile apps and 75% make decisions from their search results.50 With a keen interest in documenting, sharing, searching and consuming culinary experiences online, this captive audience represents a prime opportunity for fine dining restaurant marketers to engage with prior to the opening of a new, high-end restaurant. With this in mind, let’s examine the digital channels that restaurant marketers should leverage prior to launch and the areas for potential activation.
1. A mobile optimised website is central to a luxury restaurant’s prelaunch marketing strategy
ith the knowledge that potential customers are already online and actively researching for dining experiences, a mobile-optimised website is the foundation for establishing an online presence. Restaurant marketers can no longer remain competitive with just
a desktop version of the website, especially when 70% of consumers think it is important to be able to access information from their mobile devices. As we have previously discussed, the prevalent notion of dining as an experience means that restaurateurs should use the brand website to showcase its unique value proposition. For example, if the fine dining establishment is a Chef-led restaurant, showcase the Chef and his or her culinary inspiration through marketing visuals and copy. If it’s a concept-led restaurant, highlight the signature dishes and hero ingredients central to the experience. There is no need to wait until a finalized menu is ready before talking about the core culinary concept on the brand’s website. Use the information that is already available to shape a compelling brand narrative in consumers’ minds. An important step that helps drive awareness and makes luxury restaurants websites searchable is claiming the business listing on Google Maps. Getting listed in other local directories is also important since it helps to increase search engine rankings: A recent study shows that 72% of travelers will perform localised searches for restaurants on their smartphones while on vacation.51 So, depending on the location of your restaurant, make sure you have presence on the likes of tripadvisor.com, yelp. com and even reservation platforms like opentable.com. And, of course, don’t forget the basics in your restaurant marketing strategy. Include essential information like address, contact number,
an online booking widget, hours of operation, a general Q&A section and links to social media channels.
2. Instagram to offer behind-the-scenes glimpses and the “Fine Dining Making Of” story
ccording to Instagram Advertiser Statistics, 60% of Instagram users say that they learn about a product or service on the platform, and 75% take action, such as visiting a website, after seeing a post that interests them.52 Keeping in mind that there are 700 million active users engaging with the platform, Instagram becomes undisputably one of the most powerful social media channel in which to showcase your brand. In parallel to the brand narrative that is featured on your mobile-optimised website, a luxury restaurant marketing strategy should use Instagram to satisfy customers’ curiosity for behind-the-scenes glimpses and the “making-of” story. Start with authentic snippets that highlight the collaborative launch effort — everything from architectural milestones, sourcing trips, kitchen taste-testings to the
interior design. Even more so, as the fine dining experience becomes increasingly about the journey and the atmosphere, restaurant marketers should also take advantage of short videos to directly relay the excitement, bustle and anticipation surrounding the upscale restaurant prior to launch. According to eMarketer, more than 62% of the world’s internet users viewed digital videos in 2017, up from 60.8% in 2016.53 Short form video content is a multi-purpose tool. It can be showcased on Instagram, the brand website and also distributed as a part of the press kit for traditional PR activations.
Designing For Instagram The concept of “designing for Instagram” is gaining popularity amongst fine dining restaurateurs. It involves incorporating visual elements that have potential to encourage “Instagrammable moments” as an integral part of the restaurant’s design. Ali Busacca, head of community at Instagram for Europe, Middle East and Africa points to the Italian restaurant Pietro Nolita in New York as another venue that was “very
vocal about keeping Instagram in consideration when designing the space.” She goes on to explain that because the restaurant is entirely pink, a nod to the colour of the moment “Millennial Pink”, people were Instagramming the establishment long before it opened. Another example of a pre-conceived “Instagrammable moment” is Bob Bob Ricards’ PRESS FOR CHAMPAGNE button, a central design element of every table in the house. Leonid Shutov, owner of Bob Bob Ricards, takes pride in the fact that this (amongst other visual equities) has become an identifiable trademark of his luxury restaurant on Instagram.54 Of course, the plating and presentation of dishes can also become strong visual equities of a fine dining restaurant brand; and more often than not, it is already an artform in and of itself. While plans for the restaurant and the menu are still in the drawing room, it is worthwhile to view both through the lens of Instagram aesthetics and ask: Would a customer want to take a photo and share this on social media? What could we create that would serve as our distinctive, visual trademarks? Even more so, being able to capture the attention of an Instagram audience long before opening will only serve to build anticipation and buzz for the eventual restaurant launch.
3. Facebook is becoming the hub for luxury customer service Customers are initiating conversations with brands via Facebook and engaging in a very different way than they do on Instagram. According to Facebook, the total number of private messages that people sent to 50 million+ Facebook business pages doubled in 2015, and over 2.5 billion public comments were left on business pages each month.55 To cater to this existing digital behavior, Facebook made drastic changes to transform pages into the mobile customer-service hub for companies. The platform now offers marketers new tools to respond to customers and manage questions, complaints and general communications.56 From being able to set “away” messages to enabling businesses to add textbased notes about the customer for future communications, Facebook has in essence become a CRM tool of sorts that restaurateurs must be fluent with. A high-end restaurant’s Facebook page should contain all the essential information of the website (hours, location, menu, general Q&A), but also be held accountable for community building. Customers will most likely message restaurants directly with questions via Facebook messenger, look at
upcoming special events, book a reservation, check out photos of the environment and menu, and comment publicly with complaints and compliments. Responsiveness is essential for an industry that revolves around customer service and hospitality. Restaurateurs need to instil accountability for what happens on the brand’s Facebook page, as digital queries and complaints should be treated with the same attentiveness, timeliness and attitude as those that occur on-property. Logistics like incorporating a Book Now button, providing access to the menu, and important service descriptors like “Good for Kids,” “Good for Groups” are all musts.
Case Study DaDong is one of the most famous fine-dining establishments in China, and it is planning to open its first location in the U.S. in 2018. Almost six months in advance of its opening, this Michelin-decorated restaurant already has an active Facebook page for its New York location with almost 500 followers. In fact, the first post, a feature on DaDong’s Head Chef, Dong Zhenxiang, was posted in July of 2016. The current Facebook page not only includes the basics — location, attire, price range, contact details, and a link to its comingsoon website — it also highlights links to articles heralding the luxury restaurant’s arrival from the likes of Zagat and Eater New York. DaDong New York takes it one step further and engages the community by posting a preview of the location, publicly announcing its search for Restaurant and Beverage
Directors, and sharing culinary images of dishes from its existing locations. The high-end restaurant has even released renderings of the space, which was covered by Eater New York and described as, “a part white-tablecloth, part lounge-y affair. One floor will be more formal dining, while a lower floor will be casual. The restaurant also has an outdoor terrace and lounge space.” Even more so, DaDong’s comingsoon website is mobile-optimised, calls out its anticipated opening date, and provides contact information for the public, the media and even event bookings. It’s evident that DaDong New York is already showcasing the restaurant’s developmental milestones while building anticipation and buzz long before the upscale restaurant is slated to open.
in-house marketing team. In order to fully be present in relevant digital channels, fine dining restaurateurs need to ensure that the necessary marketing resources are in place for social media management. Co-founder of creative agency mOOnshot digital and author of Shine: Digital Craftsmanship For Modern Luxury Brands, Florine Eppe Beauloye, believes it is essential for high-end businesses to ensure the right internal digital resources, knowledge, and operating model are in place before diving into digital execution. This is especially true in the case of social media for the luxury restaurant business — a situation where an online community manager is oftentimes charged with delivering
reviews. A trained social media manager must be there to respond in a timely manner, especially for complaints. Customers see Facebook as an interactive platform, and they do expect a response. Research shows that customers expect real-time engagement with restaurants via social media platforms: 70% of customers expect a response, while 50% expect a response in less than 1 hour.57 Establishing these primary digital channels will enable a new upscale restaurant to engage in successful pre-launch digital marketing activations and engage with relevant communities. In addition, many fine dining restaurants are opting into a phased soft launch approach leading up to the opening day to take advantage of their already active digital ecosystem and allow for the gradual amplification of digital buzz. This strategic approach is a targeted way to fuel demand.
5. Phased soft-launch luxury marketing strategy with local food bloggers & influencers to generate online buzz
4. Ensure the right high-end marketing resources are in place to grow digital channels
side from established chain restaurants or hotel restaurants, many boutiques, fine dining establishments do not have an existing
the right “first impression” instead of a host at the door. Restaurant marketers need to understand that ignoring an unhappy customer that has spoken up on Facebook is just as damaging as ignoring one that is on-site, perhaps even more so since future customers will be evaluating fine dining restaurants based on their
Besides traditional PR, upscale restaurants should engage in phased, pre-launch events that invite controlled groups of food bloggers and relevant influencers in the region for an exclusive dining experience. The sway of digital influencers is at an all-time high. According to a recent study, 92% of consumers trust an influencer’s opinion more than an advertisement.58 Add to that, 33% of millennials rely mostly on blogs before they make
a purchase, and the power of persuasion seems to rest heavily in the hands of the digitally-connected. Inviting targeted groups well-known food bloggers, industry experts and relevant Instagram influencers to pre-launch events is an effective way to generate customer interest and build digital buzz before the restaurant officially opens its doors.
One important caveat When it comes to Instagram influencers, luxury restaurant marketers need to carefully choose the right influencers to collaborate with. Form partnerships with influencers who already have a vested interested in the culinary experience, who could potentially produce quality content aligned with the visual and verbal tonality of the brand, and have a following consisting of potential customers at your fine dining restaurant. Focus on quality over quantity when evaluating influencers and their following. For these phased events, restaurateurs should go the extra mile. Introduce the food, the cocktails, the Chef, the culinary story and create an unforgettable event around the fine dining experience. And, as a part of event preparations, make sure to have a photographer present to capture events so marketers can use them on the restaurant’s own digital channels. Overall, getting a head start with phased, soft launch events as part of your high-end restaurant’s marketing strategy is an opportunity to garner positive reviews on social media, features on popular food blogs and notable digital mentions by influencers whose opinions are trusted by their followers.
Another positive effect from phased, soft launch events is the opportunity to repost user-generated-content (UGC) on the restaurant’s social media channels. UGC has proven to be incredibly effective at building engagement and credibility. When upscale brands use a mix of both brand content and UGC, overall brand engagement increases by 28%.59 Undoubtedly, fostering an online following that is actively talking about the restaurant and eager to experience it before the actual opening day is invaluable to restaurateurs. Digital buzz is the new wordof-mouth. Creating time in your marketing strategy for a month or two of positive online content, reviews and engagement will help cement your fine dining restaurant as the next must-try culinary experience. In addition, localized digital presence from high traffic blogs and news sites will increase your chances of appearing when customers engage in localized restaurant searches.
6. Introduce a new high-end culinary concept online via preview dining
f the high-end restaurant is introducing a relatively new culinary concept, it is worth considering “preview dining” as a means of education, while lowering the barrier to trial for markets that are unfamiliar with the cuisine. Preview dining usually involves a discounted select menu featuring signature flavours and dishes. On this note, remember to emphasise in your restaurant marketing plan the discovery experience, and not the discount itself. Avoid any paid advertising that explicitly calls out discount or promotion. Not only are today’s customers adept at filtering out ads, but promotional language undervalues the integrity and authenticity of the actual fine dining experience. As preview dining customers will be amongst the first to leave online reviews, the kitchen and front of house need to be prepared to deliver an exceptional experience. Studies show that 87% of customers look to online reviews to
guide decision making when evaluating local businesses.60 That said, a preview dining experience that can generate stellar restaurant reviews, especially for a foreign culinary concept, will be integral to generating appeal and trial within Luxe Digital
the broader community once the upscale restaurant opens. Utilizing digital marketing effectively is the key that could make or break the launch of a fine dining restaurant. What many upscale restaurant marketers donâ&#x20AC;&#x2122;t realize is how important it is to establish digital presence before the actual launch. Ensuring that the digital fundamentals are covered, the unique brand story is communicated and that the right influencers and food bloggers are talking about your experience online will enable high-end restaurants to hit the ground running, while providing the fuel needed to sustain momentum through the tentative first year. Words by Tian Chang.
Florine Eppe Beauloye on Sitting in the Digital Front Row of Luxury
igital luxury is so embedded in her life, it’s hard to tell whether she chose it or it chose her. We sat down with our very own award-winning Editor-in-Chief, Florine Eppe Beauloye, to discuss her front row views on luxury and their digital adoption and adaptation. Going stiletto-first into digital ventures, Florine is a high-powered businesswoman and a wearer of many hats … Or, in her modest words, a multi-hyphenate digital entrepreneur. Beyond her work at Luxe Digital, she is the co-founder and CEO of mOOnshot digital, a creative and digital agency for premium and luxury brands. She is also the author of the book Shine: Digital Craftsmanship for Modern Luxury Brands praised by Industry leaders from Google, Facebook, LinkedIn, The Wall Street Journal and more. She was recognised as one of Asia’s Top 50 Women Leaders by The World Brand Congress and CMO Asia magazine. She thinks deeply about how the digital landscape is changing. She is a sought-after speaker, sharing her thoughts and insights on digital marketing to diverse groups of people around the world – from renowned business universities to international events. Starting her career in journalism and communications, she now combines her knowledge of the media business with her expertise
in digital marketing for luxury. Luxe Digital: Hello Florine, we could not start this opinion series on Luxe Digital without understanding what led you to launch this new luxury digital publication. Florine: Part of being a successful entrepreneur is being able to recognise the opportunities around you. I first launched mOOnshot digital to
answer a gap in the market; a need for a boutique agency offering bespoke and targeted digital strategies to high-end brands. In our continued effort to move digital boundaries for discerning brands, Luxe Digital felt like the natural next step for mOOnshot digital. There is so much fragmented information out there, it’s hard to keep up and make sense of it all. For luxury brands, in particular, I could not find a one-stop online
destination that was specifically dedicated to the digital transformation of the luxury industry with an in-depth understanding of the Asian market. We’re very excited to launch this digital publication to help share our learnings and to equip luxury professionals with the right tools and knowledge to be at the forefront of the luxury industry’s digital transformation. Having worked as a journalist early on in my career, I have experience in discovering what is noteworthy, asking the right questions (sometimes the difficult ones), and crafting compelling stories. Mixing my media background with a decade of marketing experience with lifestyle and luxury brands, I felt that I could play an even greater, positive and constructive, role in demystifying digital marketing for luxury brands. I believe that digital mindsets and innovative thinking are the catalysts for growth. Luxe Digital is a discerning media that is redefining luxury for the digital era. We distill the babble of digital marketing into an intelligible digest delivering first-class content. We are credible. Inclusive and
engaging. And I cannot wait to see where our publishing journey leads us. Luxe Digital: What changes are you observing in the industry? Florine: On digital… After a rather slow start, luxury brands are (finally) embracing digital seriously. Some, such as Burberry, are now even able to leverage digital as a unique competitive advantage with measurable impact. Luxury brands are also taking a deeper plunge into online shopping. Some of them include e-commerce elements under their own brand names. This opens up new and exciting opportunities — from the emergence of digital-first luxury boutique brands to the launch of 24 Sèvres by luxury powerhouse LVMH. Most luxury brands are now at least offering an optimised web experience on mobile but there is still a long way to go to offer a truly seamless omnichannel experience. On luxury… The modern context seems to be shifting from simply acquiring high-end products per se to being more about living first-class through authentic, one-of-a-kind experiences. Now more than ever, it’s about experiencing luxury rather than owning it. The desire to indulge in luxuries exists for a much wider, more nuanced market than it ever did before. Luxury is both timeless and current—timeless because it has a rich history and leaves a lasting, indelible impression, and current because it needs to answer to modern affluent consumers. Expressions of luxury have become more subtle and understated, more
personal, individualistic and intimate, and less ostentatious. New affluent consumers are seeking more fluidity and the ability to inject what they buy with their own meaning, their own personal story.
“The essence of digital is not technology; it is the opportunity to connect with people and improve brands and lives at scale.” Luxe Digital: How can luxury brands best approach the digital transformation of their industry? Florine: Every business has its own path to becoming digitally successful, depending on its unique set of needs and priorities. But the fundamental attributes are the same. As I mentioned in my book, there is something magical and fascinating about digital marketing for luxury brands. Think of the incredible processes that a professional with expert knowledge, equipment, and tools undertakes to make a diamond shine. Imagine the weeks and months it takes to transform a rough diamond into a polished product of desire. Well, in the same way, digital for luxury brands is a long-term process that requires careful planning, a clear process, specialised skills, and discipline to make your brand shine online. I believe that when your digital brilliance illuminates your core values and messages, your brand will shine brighter than you ever imagined. These thoughts inspired the SHINE framework detailed in my book. The model provides a simple set of prerequisites to adopting the right digital mindset. It’s a constellation
that connects the five main components of digital marketing and puts your niche in the centre. The SHINE mnemonic summarises these five key pillars that luxury businesses need to hone their â&#x20AC;&#x2DC;digital sweet spotâ&#x20AC;&#x2122;: Strategy, Holistic implementation, Intelligence, Nimbleness, and Engagement. Luxe Digital: What should senior executives of luxury brands pay attention to in the near future? What are your thoughts on tomorrow? Florine: Digital can really be a competitive advantage for the brands who embrace it and explore creative ways to leverage it. But you need to do it in a strategic, thoughtful, and systematic way. Strategic because it needs to be part of a holistic approach where each channel can support and amplify each other, seamlessly. Thoughtful because you need to carefully treat your brand so you donâ&#x20AC;&#x2122;t denature it. And systematic because you need to constantly measure and iterate with your digital endeavours. Digital marketing is really only in its infancy within the world of luxury, and there are still so many opportunities to be uncovered. Instead of focusing the thinking on new technologies though, brands and leaders should shift their mindsets and concentrate on the behavioural changes that come with the digital revolution. We will increasingly see consumers expecting bespoke, curated, concierge-like digital experiences seamlessly integrating with their lives and centered around their preferences.
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In Our Next Issueâ&#x20AC;¦
The Future of Online Retail
Endnotes 1 Google unmasks the skin care trends of 2017, by Yarden Horwitz and Olivier Zimmer, February 2017. 2 Beauty consumers favor “cruelty free” and “natural”product claims, by By James Russo, SVP, Global Consumer Insights, Nielsen, March 24, 2015. 3 What’s Driving The Billion-Dollar Natural Beauty Movement?, by Rina Raphael, Fast Company, May 26, 2017. 4 Are You A Skintellectual?, ATKearney, 2017. 5 Beauty and the E-Commerce Beast, by Harriet Agnew and Tom Hancock, Financial Times, April 29, 6 Why Estee Lauder Invested In Multi-Brand Skincare Brand Deciem, Forbes, June 16, 2017. 7 Unilever has taken measured move to crack the prestige skin care market, by Andrew McDougall, Cosmetics Design, July 20, 2017. 8 The Way We Buy Beauty Now, How millennial skepticism is revolutionizing the beauty industry, one purchase at a time. By Beth Shapouri, Racked, May 26, 2016. 9 Instagram Influencer Marketing Is Now A $1 Billion Industry. Mediakix | Influencer Marketing Agency. N.p., 09 May 2017. Web. 13 June 2017. 10 Eppe Beauloye, Florine. Shine – Digital Craftsmanship for Modern Luxury Brands. Singapore: Michael Hanrahan Publishing, 2017. Print. 11 Weinswig, Deborah. “Influencers Are The New Brands.” Forbes. Forbes Magazine, 05 Oct. 2016. Web. 13 June 2017. 12 The New Face of Luxury. Fashion And Beauty Monitor. N.p., 2017. Web. 13 June 2017. 13 How Bots Are Inflating Instagram Egos.. The New York Times. The New York Times, n.d. Web. 13 June 2017. 14 How Luxury Brands Should Approach Influencer Marketing. mOOnshot digital, 9 June 2017. 15 Harris, Sarah. What Is An Influencer?. British Vogue. British Vogue, 11 Mar. 2017. Web. 13 June 2017. 16 MasterCard Asia Pacific Destinations Index 2016. MasterCard, 2016. PDF. 17 World Travel & Tourism Council. N.p., n.d. Web. 18 Marvel, Macy. The Hotel Distribution Report. Hotel Analyst, Oct. 2016. PDF. 19 Hotels vs OTAs. Morgan Stanley, 23 June 2016. 20 Smart Hotelier’s Guide To 2017 Digital Marketing Budget Planning. HeBS Digital, 2017. PDF. 21 Digital IQ Index: Luxury Hotels 2016. L2, 2016. PDF. 22 5 Big Ideas To Master Digital In Hospitality. Accenture, 2015. PDF. 23 The 2014 Traveler’s Guide Road To Decision. Think With Google, 2014. PDF. 24 The Study Of Factors Affecting Customer’s Satisfaction. ResearchGate, 2016. PDF. 25 Luxury Hotels Are Missing an Opportunity With User-Generated Content. Skift, 13 Sept. 2016. 26 The 2014 Traveler’s Guide Road To Decision. Think With Google, 2014. PDF. 27 Shine – Digital Craftsmanship for Modern Luxury Brands. Florine Eppe Beauloye, 2017. 28 2017 Travel and Hospitality Industry Outlook. Deloitte, 2016. PDF. 29 Sustainable Luxury Brands: Evidence from Research and Implications for Managers. Palgrave Macmillan, Amatulli C., Angelis, M., Costabile M., and Guido G., 2017. 30 The Rich Don’t Drive the Luxury Sector, by Luca Solca, Business of Fashion, January 26, 2016. 31 Financial Times Business of Luxury Summit. San Francisco, May 22 to 24, 2016. 32 Hyperconnected Consumers In the Digital World, by Lisa Holmes, Euromonitor International, April 10, 2015. 33 China gifts luxury a reprieve, by Harriet Agnew and Tom Hancock, Financial Times, April 29, 34 With 92% of Luxury Brands on WeChat, Here’s How They Can Step up Their Game, by Liz Flora, Jing Daily, May 29, 2016. 35 Can ‘smart malls’ save China’s failing shopping centres from collapse?, by Helen Roxburgh, The Guardian, September 17, 2015. 36 The elephants fight back, The Economist, November 21, 2015. 37 Study: China Has More Socially Conscious Consumers Than US, by Lyndsay McGregor, Sourcing Journal, Luxe Digital
April 27, 2015. 38 Retail knockoffs: Consumer acceptance and rejection of inauthentic retailers Journal of Business Research. Rosenbaum M., Cheng M., Wong I., 2016. 39 China slowdown: The ripple effects for Burberry, by Alexandra Gibbs, CNBC, October 15, 2015. 40 Robo-advising platforms carry new risks Hands offâ&#x20AC;&#x201D;guard up. Susan Ameel and Christopher Stevenson. Deloitte. 41 Millennials and wealth management: Trends and Challenges of the new clientele. Dr. Daniel Kobler, Felix Hauber, and Benjamin Ernst, 2015, Inside: Quarterly Insights from Deloitte. 42 10 Disruptive trends in wealth management. Gauthier Vincent, Sean Cunniff, and Jared Goldstein, 2105, Deloitte. 43 Taking wealth management digital. Andreas Lenzhofer, Christian Reber, Daniel Diemers, and Stefan Kramer, 2013, Strategy&, PWC. 44 HSBC closes a quarter of high street bank branches in two years. Ben Chapman, 14 December 2016, The Independent. 45 Wealth Management in the Digital Age. David P. Wilson and Tej Vakta, 2016, Capgemini. 46 How wealth managers can transform for the digital age. Pooneh Baghai, Brant Carson, and Vik Sohonii, August 2016, McKinsey. 47 UK millennials embrace robo-advice more than global peers. Imogen Conyers, 2016, Legg Mason Global Investment Survey. 48 Is it really riskier to invest in restaurants than other businesses or is this just another urban myth. Mica Pearson-Davies, September 2016, LinkedIn Pulse. 49 20-somethings spend more than other Americans on coffee, dining out and barhopping. Kevin Breuninger, June 2017, CNBC. 50 81 Percent of Consumers Search for Restaurants Through Mobile Apps and 75 Percent Make Decisions from Those Search Results. Hotel News Resource, April 2013. 51 TripAdvisor Study Reveals 42% of Travelers Worldwide Use Smartphones to Plan or Book Their Trips. TripAdvisor, June 2015. 52 Hitting 500,000 Advertisers. Instagram Business Team, September 2015. 53 Number of digital video viewers will climb to 2.15 billion this year. eMarketer, January 2017. 54 A square meal: how restaurants are courting the Instagram crowd. Financial Times, Natalie Whittle, April 2017. 55 New Tools for Managing Communication on Your Page. Facebook Business, December 2015. 56 Facebook Gives Marketer Pages New Customer-Service Tools. Advertising Age, Tim Peterson, December 2015. 57 The Complete Guide to Social Media for Restaurants & Bars. Sproutsocial, Jenn Chen, January 2017. 58 Influencers Are The New Brands. Forbes, Deborah Weinswig, October 2016. 59 comScore Study Finds Professionally-Produced Video Content And User-Generated Product Videos Exhibit Strong Synergy in Driving Sales Effectiveness. comScore, March 2012. 60 Consumers Overwhelmingly Trust Online Reviews, Says New FindLaw and Super Lawyers Survey. Thomson Reuters, December 2016.