Luxury brands and retailers are judged by higher standards than more ‘mass market’ businesses, so how should marketing and communication handle this?
With the rise of digital marketing, the marketing industry is at a turning point and is changing the way luxury brands engage with customers. Traditional companies must embrace what is now possible in today’s connected and mobile world or be left behind.

Luxury isn’t about the price tag nor is it about the product itself – at least not the functionality or purpose. It’s about the status, the symbol and the association.

There’s no functionality a car manufacturer offers solely that others do not, yet luxury transcends functionality, rationality and need. It is unique because it is irrational, impractical and often, unprofitable. But where does digital marketing come into play? And what are the struggles that are unique to luxury brands?

CHOOSING THE RIGHT CUSTOMER
The expansion of the Internet, combined with the rapid penetration of mobile digital technology, has created an urgent need for marketers to rethink their branding strategies.

One of the key challenges is delivering an effective translation of a brand’s identity through these applications. Within this context, the greatest challenge faced by the luxury industry is employing mobile media branding strategies.

Once known as exclusive to a niche market, luxury brands have now become available to a mass market as a result of the online environment. This occurrence raises significant problems for luxury brands with regards to their brand DNA and how customers perceive their brand image.

To date, little research has been undertaken to address the issue of how luxury brands maintain their niche positioning to appear exclusive, while using platforms designed for the masses and technology that relinquishes brand control to consumers.

Central to the survival of luxury brands in the mobile-mediated environment and its need to provide a positive online brand experience that simulates positive sensations connected to the five human senses.

It is argued that this can be achieved through applying ‘luxemosphere’, which reinforces brand image and generates intimate relationship with customers through an influential website experience.

THE BRANDING CHALLENGE
The luxury market is expanding rapidly and luxury products sales continue to grow by more than five per cent every year according to the most recent research. However, in employing marketing tools and communication channels, such as the Internet, luxury brands face many challenges.

One of the key challenges is bringing an effective translation of the brand identity online. Recently, many luxury brands have considered mobile applications (apps) as an ultimate channel to connect to their existing and potential clients.

However, luxury brands may face a similar challenge in bringing an effective translation of the brand identity when they employ smartphone applications.

The mobile phone is a very personalised and powerful communications tool.

Rapid increases in the number of mobile phones and their technological development has transformed consumers’ behaviour towards mobile as a communication channel and advertising tool, as well as their shopping experiences.

Further, smartphone applications have revolutionised the way luxury brands engage their consumers and it has created enormous challenges for luxury brands in terms of their communication and branding strategies.

The reason is that mobile applications have the ability to change users’ attitude, purchase intention and interest in the product category through ubiquity, convenience and ease of use.

THE NEW IDENTITY
So what about the luxury fashion shoppers, who have always considered the shop assistant or store manager as their very own exclusive set of eyes and ears into the brand’s must-have pieces and new collections.

They know their customer’s style, size, budget and location. The knowledge held by the shop assistant is unrivalled when it comes to maximising lifetime value of the customer.

This along with providing a customer with a form of experiential luxury that will leave them wanting more are the core strengths of luxury brands.

The question that now imposes itself is this, how can luxury brands provide a new experience online without sacrificing their luxury?

Essentially by providing customers with experiential luxury, (the opportunity to visit a showroom or have access to a personalised service) luxury brands have the opportunity to stand out.

According to McKinsey & Company, “Today e-commerce represents a scant four per cent of luxury sales – but e-commerce is only one aspect of the digital opportunity”.

Their research found that an additional 40 per cent of luxury purchases are in some way influenced by consumers’ digital experience – for example, through online research of an item that is subsequently bought offline, or social-media “buzz” that leads to an in-store purchase.

Given the undeniable growing power of the digital universe, all luxury brands must think hard about their digital presence. The “right” digital strategy differs for every brand, but what’s certain is that it’s no longer just about a beautifully designed and user-friendly website or effective banner ads.

The most successful luxury brands will be those that build a compelling mobile presence, engage and influence consumers through targeted use of social media, and focus on a carefully chosen set of digital-performance metrics.