Recovering from COVID-19: A Fresh Look at the Personal Luxury Industry
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When faced with unprecedented challenges, we often see innovation as a result. The same held true for the luxury retail sector over the past 18 months.
In our latest report, we have compiled insights into the personal luxury goods industry as well as trends and related case studies from our ROI Genome™. We’re also highlighting the 5 key steps that will give luxury brands – and those beyond the luxury sector as well – the chance to preserve their resilience, stay ahead of the curve and be prepared for any unknown in the future. Read on for a sneak peak of the key takeaways:
Seize geographical opportunities: Globalization, China and beyond
From a consumer standpoint, Chinese clients will become the most important buyers for luxury, representing over 45% of global purchases in 2020 (vs. 35% in 2019). Brands that are looking to expand or invest further into China should be aware of the market dynamics and act accordingly. We are seeing a need for robust measurement frameworks to capture the branding media inside and outside of the large platforms like TMall, because many purchases are coming from social platforms that can’t be tracked with last click attribution reporting.
Shifting from Product to Customer-centricity
Generation Y (born between 1980 and 1995) and Generation Z (born after 1995) will be the biggest buyers of luxury by 2025, representing over 2/3 of global purchases.
In parallel, the rise of influencer marketing not only provides an engaging story for young and high-net-worth consumers, but also leverages their significant online following base to drive reach. However, before engaging with an influencer, luxury players need to ensure clear objectives and KPIs alignment internally to avoid damage to their creative control and most importantly, their brand perception.
Take an Omnichannel View
In addition to selling merchandise, digital channels have joined TV and OOH as essential inspiration touchpoints in the early phase of the consumer journey. Ultimately, it is the way in which both online and offline channels work with one another that creates the greatest positive impact. In fact, research from the Analytic Partners ROI Genome demonstrates that a combined increase of both digital and brick & mortar presence can lead to up to 32% higher returns.
Become the Brand of the Future
Consumer journeys are becoming longer and more complex, so brands need to be active with more touchpoints, focus on giving back, and generate emotions through marketing activities. However, even the most authentic message can be lost in the noise without an effective deployment strategy. Our ROI Genome shows that serving ads in the right context can support business growth and ROI improvements on average of +31%.
Accelerate Technological Transformation
Luxury brands have been slow to embrace digital but given the shift to online shopping and the fast emergence of new digital-first luxury brands, they need to quickly catch up. From an operational standpoint, companies should adopt advanced analytics to generate competitive advantage and value creation to boost performance. Establishing a robust, holistic and credible analytic framework, such as Commercial Mix Analytics, is important to help optimize marketing investments.
The Future is Data-driven
The key imperatives of tomorrow’s successful luxury players, and indeed brands across industries, centers around data-driven strategies backed by holistic measurement solutions. Having a clear picture of how every aspect of the business works together is critical not only for long-term success, but also for balancing quick wins with sustained growth in the short-term.
Looking for more insights? Download your copy of Recovering from COVID-19: A Fresh Look for the Luxury Industry.
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