Coco Chanel once said, “The best things in life are free. The second best are very expensive.” The mistress of iconic fashion couldn’t have stated it more succinctly. Luxury today, as it was in Coco’s time, is not essential but continues to be highly desirable and prestigious because of the quality, price, and prestige it confers on its consumers.
However, when it comes to marketing, luxury brands are like any other brand. They market themselves to those who can afford to buy them and those who aspire to own something, anything, created by them. Like all brands, they battle for share of mind and wallet.
93% of Consumer Engagement with Luxury Brands Occurs on Instagram (Source: Digimind)
COVID accelerated a trend already in the making – the economy saw a massive shift to eCommerce, and marketing shifted accordingly to digital platforms. Not surprisingly, luxury fashion, jewelry, cars, and retail brands were the first to commit to social media. They immediately recognized that absent the ability to go to a store, the stories and images shared in the new virtual market will make up the building blocks of a brand’s image and equity. And these touchpoints, albeit digital, make for real and tangible engagement, interest, loyalty, and connections with their audience online, particularly on Instagram.
Over and above Instagram controlling 93% of customer engagement, Digimind’s research showed that what consumers see online and their interactions with a brand influence 40% of luxury purchases.
The Face of Affluence Is Changing
Affluent consumers are no longer just Baby Boomers and Generation X. Wealth is now multi-generational as large numbers of Millennials and Gen Z are prosperous and buy luxury goods. By 2025, Millennials and Gen Z will make up 50% of the total luxury market. Their spending habits will define and redefine what luxury goods and experiences will be in demand.
What we do know is:
As with any consumer audience, identifying demographics is only the first step. In their recent book “Luxury Wine Marketing: The Art and Science of Luxury Wine Branding,” Peter Yeung’s and Dr. Liz Thach’s research identifies four categories of luxury wine buyers: The aspirational buyer, the luxury buyer, the wine collector, and the wine geek. Each persona has its price points, brand loyalty, and trusted referral sources. A wine collector will listen to critics and other wine collectors, while celebrities and influencers might influence an aspirational buyer. Understanding your target and the segment(s) your wine resonates with is the key to success in this evolving landscape.
New School Marketing Tools for Old School Brands
A recent Social Media Industry Report on Luxury Brands by NetBase Quid digests and synthesizes the kind of social interactions driving authentic engagement and brand passion and how luxury brands are capitalizing (or not) on these experiences to drive consumers to do business with them. The report is a deep dive into the detail of several luxury brand’s social presences. While not everything in the report applies to wine, what is apparent from the research is that digital advertising, social media engagement, search engine optimization, and influencer marketing are now a staple for what could be called “old school luxury brands” like Hermes, Chanel, Burberry, LV, Ferrari, Jaguar, Gucci, Chopard, Cartier, Neiman Marcus, and Harry Winston.
So the next time you think that you’re too “unobtainable” to be on social media, luxury wines should take heed. The marketing tool kit has forever expanded to include digital channels, not by luxury brands themselves, but by today’s affluent consumers. The consumer desire to have access to everything right now and the desire to buy into luxury brands are successfully forcing luxury marketers to straddle the fine line of relevance and exclusivity.
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