Introduction

Forget glossy catalogue spreads and ostentatious storefront displays: a 2017 Deloitte report found that more people would prefer to shop luxury goods online than in stores. People want to shop online, but how do you sell a $2,500 coat without a dressing room or an $800 candelabra without a salesperson?

According to Think With Google, 100% of luxury shoppers use a smartphone, tablet, laptop or desktop to make purchases. The consumer market for luxury goods is already engaging online, waiting for brands to catch up and meet consumer segments where they are. 

 

The Problem

Historically, luxury brands’ digital strategies include heavy paid search spending. But paid search competition is intense; in focusing on a discovery strategy, many brands drive prospective customers to resale sites.

According to benchmarking company L2, over a third of luxury labels don’t own the majority of search terms that include their brand name. The same L2 report revealed that more than half of luxury companies haven’t updated their branded app in the past year. Nine out of every 10 fail to include shoppable links in Instagram posts.

Meanwhile, Prada withheld from engaging in online shopping until 2016 because, according to marketing director Stefano Cantino, “The shopping experience has to remain immaculate and in-store.” Not engaging online is myopic. The “new luxury” brands capture consumers where they prefer to shop: online.

 

The Solution

Brands don’t have to stop investing in online discovery, but they need a revamped strategy for social, mobile apps and keywords. Brands also need to curate and cultivate the experience of luxury all the way through product purchase, rather than just optimize for search and call their work done. Whereas discount outlets can compete on AdWords and Google Shopping, they cannot craft and create a bespoke branded experience.

The next generation of luxury companies — like Millennial consumers — are digital natives, built for web with social ingrained in their business models. Younger brands seeking to cultivate a reputation of prestige do so with a social-first mentality. These brands are innovative and agile; they understand the value of community management. They understand that social channels are not only a way to disseminate messages to their customers, but also a way for their customers to talk back.

Even a brick-and-mortar first approach has room for digital innovation. Stores can deploy augmented reality, virtual reality or experiential activations like smart mirrors to create a memorable experience.

Still, any progressive omnichannel strategy in 2018 (and beyond) will embrace immersive technologies and progressive digital strategies both in-store and out. The Millennial luxury segment is projected to grow from about 30% of the luxury market to almost half by 2025; this generation is digital-first, and any brand seeking relevance must be oriented toward new and emerging tech.

We’re highlighting some brands and activations we think are crushing it:

 

Swarovski x Mastercard VR Showroom

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Don’t get caught dead without this season’s hottest accessory: bedazzled VR goggles.

Swarovski and Mastercard teamed up to give prospective customers a private virtual tour of a high-end home, decked tastefully in Swarovski. A user hovering their focus over an item sees a pop-up item description and option to purchase.

This virtual reality activation is the first time that a checkout interface has been deployed seamlessly within the VR experience itself. There’s no need to save items for later, no switching between devices; with just a nod, that crystalline leopard statuette can be yours. Mastercard reports that the average time spent in the Swarovski activation is a staggering nine minutes. “If you can get someone to engage with you for nine minutes,” says the CEO of YouVisit, the platform that powered the checkout flow for Mastercard, “why do you want them to go somewhere else to complete the purchase?”

When Millennials are given the option between buying a luxury brand product or a luxury experience, 65.8% say they’d choose the experience. A well-developed AR or VR application, however, can make even items feel experiential.

 

Prada x Prada VR app

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Remember how Prada was a laggard in the ecommerce game, refusing to sell certain products online until 2016? The brand is making up for lost time.

Prada created an immersive VR app that transports a user to an opulent, fantastical house of mirrors. The app drops a user into a darkened mansion. M.C. Escher-esque staircases twist and rise to cotton candy skies and kaleidoscopic canopies. Wild reeds and gargantuan flowers sprout from the slick checkered floor. Walking through the dreamscape, users may bump into actors Mia Goth, Mia Wasikowska, Dane DeHaan or Ansel Elgort.

Fragrance is an elusive category in terms of digital marketing, as the consumer has no opportunity to digitally interface with smell. Luxury brands, however, have always aimed to create an emotional or extrasensory appeal to their products. A luxury brand might craft an entire collection inspired by the French Riviera in hopes that the customer perceives the relaxed opulence.

Virtual and augmented reality, though, can instantly transport the customer to the coastline. Shoppers can browse through products not on a shop floor or a website, but against the sapphire seas of French beaches.

Burberry AR app

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Last year, Burberry leveraged Apple ARKit (see what we’ve written about ARKit here… and here) to create an augmented reality experience on the brand’s mobile app. When a user opens the in-app camera, the world onscreen is populated with quirky illustrations by artist Danny Sangra: crowns, raindrops, clouds, camera flashes, and speech bubbles. (One particularly tongue-in-cheek speech bubble sequence: “What the heck is AR? Isn’t that what pirates say?”). The app exports images with borders of Burberry’s iconic plaid, perfectly packaged for social media sharing.

This activation drove Burberry’s app downloads and encouraged customers to engage with the brand on its own turf, rather than on reseller sites. The campaign’s shareability and social-friendliness organically turned users into brand advocates.

Gucci Digital Strategy

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Luxury fashion brands Commes des Garcons and Chanel have made emoji packs, but Gucci made waves last year for unrolling the first high-fashion meme collection. Brands making memes can be a dangerous game, as memes must be resoundingly funny and never, ever try-hard. For #TFWGucci, the brand employed Instagram influencers and meme creators to pair original imagery with sardonic and absurdist captions. The memes featured or referenced Gucci items, and were distinctly elevated over the average meme thanks to high-quality photography, art history references and original illustration.

Gucci continued its collaboration with visual artists for a series of 360-degree virtual reality videos available on its app and website. Gucci’s cohesive multi-channel collaboration with artists suggests deliberate social strategy; the content is intrinsically engaging and viewers must follow it from platform to platform to see its full breadth. In an age where adblocking is becoming the norm, Gucci stays one loafer-clad step ahead with beautiful branded content  you’ll actually want to see.

Gucci also knows that it must diverge from the “old” luxury model of top-down marketing messages and be more responsive to their online customer contingent. Gucci joins the ranks of other luxury brands like Audi and Louis Vuitton in building a Facebook-integrated chatbot. Customer service technology such as chatbots can dramatically lift shopping satisfaction and further promote Gucci’s site above competitors’ and discounters’.

Gucci’s emphasis on digital strategy has literally paid off; overall growth hit 51% for Gucci in 2017, but ecommerce growth skyrocketed to triple digits.

In the fashion and accessories space, brands have been embracing digital activations. Luxury auto, food, beverage, hotel and travel brands, meanwhile, have room for headway in the space of AR/ VR/ experiential digital. Within the next decade, artificial reality and experiential digital will become standard marketing and shopping instruments. For now, there’s still time to get ahead of the curve.