This is according to Luxury Daily’s ‘The State of Luxury’ report, which along with Unity Marketing surveyed 599 insiders, observing that growth in digital provides the industry with a complicated mix of its greatest future challenges along with its most fruitful opportunities.
“The digital revolution continues to disrupt business as usual for luxury brands,” said Mickey Alam Khan, editor in chief of Luxury Daily, New York. Yet this year, he added, “the survey shows more luxury companies have embraced the potential that Internet marketing and e-commerce represent.”
Social media, the study finds, is where the largest number of luxury brands will invest marketing budgets this year, closely followed by web site enhancements, and large platform internet marketing such as Google’s AdWords.
If the figures translate to the industry at large, this would take much of luxury’s significant adspend (£5.08 billion in 2017) online.
But the internet offers more than brand building opportunities, as Luxury Daily observed growth in the number of brands entering e-commerce. The report finds that 68% of luxury brands now sell goods online, compared to 62% in 2016.
This follows a broader theme in luxury that has been growing for some time. In the west, even digital holdouts such as Chanel and Celine began shifting to e-commerce late last year in search of greater opportunities online.
Luxury’s centre of gravity is shifting. This is reflected in the movement of budgets away from print advertising, which, according to the survey, will only attract around half the brands that social media is expected to serve.
“This is a bellwether of strength in the luxury industry, as brands pick up the pace to attract new customers and communicate their branding messages through media that is most relevant to them,” said Pamela Danziger, president of Unity Marketing and lead researcher in the study.
While the shift to e-commerce is quite new in the west, some luxury brands operating in Asia have successfully followed luxury money online. In October of last year, Alibaba e-commerce rival JD.com launched a dedicated luxury platform, Toplife.
Speaking at the time, JD.com CEO Richard Liu said “luxury brands worldwide are now able to directly provide customers throughout China with a true luxury shopping experience previously only associated with high-end offline stores”.
Sourced from Luxury Daily, Statista, Bloomberg, WARC