A female affluent consumer walks into a Saks' shoe department. She tries on several luxury brand shoes and then has to decide between two designer brands. The prices are the same. The look, heel, color are all the same. The shoe's comfort is the same. What is the deciding factor?
Another female affluent consumer is internet savvy and has no problem purchasing luxury items online. She is a keen follower or fan of two luxury brands. She is also an evangelist of both brands. She is in the market to buy luxury brand shoes and must decide between the two. The prices are the same. The look, heel, color are all the same. She has owned both brands before and is satisfied with the quality and comfort of both. What is the deciding factor?
How is social media and digital platforms affecting consumer behavior with luxury brands? There is a lot of information, research, studies on how these are changing the way consumers purchase. Does the female affluent consumer feel an affinity toward one luxury brand in particular because she is a "fan" of that brand? Does she purchase luxury brand X instead of Y because X has done a better job with its digital presence? Is she more apt to buy brand X because she saw today an image on X's facebook page of actress Angelina Jolie wearing X shoes? What exactly is the deciding factor that pushes the consumer to purchase X rather than Y and what then can luxury brands do to harness these changes in consumer behavior?
Below is the 2010 Luxury Lab Index which ranks the top luxury brands according to digital excellence:
http://www.l2thinktank.com/luxury2010digitaliq/luxury2010digitaliq.pdf
Another female affluent consumer is internet savvy and has no problem purchasing luxury items online. She is a keen follower or fan of two luxury brands. She is also an evangelist of both brands. She is in the market to buy luxury brand shoes and must decide between the two. The prices are the same. The look, heel, color are all the same. She has owned both brands before and is satisfied with the quality and comfort of both. What is the deciding factor?
How is social media and digital platforms affecting consumer behavior with luxury brands? There is a lot of information, research, studies on how these are changing the way consumers purchase. Does the female affluent consumer feel an affinity toward one luxury brand in particular because she is a "fan" of that brand? Does she purchase luxury brand X instead of Y because X has done a better job with its digital presence? Is she more apt to buy brand X because she saw today an image on X's facebook page of actress Angelina Jolie wearing X shoes? What exactly is the deciding factor that pushes the consumer to purchase X rather than Y and what then can luxury brands do to harness these changes in consumer behavior?
Below is the 2010 Luxury Lab Index which ranks the top luxury brands according to digital excellence:
http://www.l2thinktank.com/luxury2010digitaliq/luxury2010digitaliq.pdf
Top Ten Luxury Brands with the highest digital IQ (as ranked by Luxury Lab):
1. Coach
2. Ralph Lauren
3. Louis Vuitton
4. Gucci
5. Hugo Boss
6. Burberry
7. Dolce & Gabbana
8. Giorgio Armani
9. Swarovski
10. Tiffany
According to L2 Founder Scott Galloway,
"... 2010 has been a seminal year for the luxury industry, some brands have put the weight of their organization behind digital, while others have stood still and have been left behind.” “The ‘it’ product in luxury is not a handbag or watch, but innovative social media programs.”
REPORT FINDINGS:
- "Traffic to brand sites from Facebook more than doubled in 2010, growing from 3.4 percent to 7.1 percent with 73 percent of luxury brands registering the social media giant as a top eight source of traffic. Traffic from Twitter and YouTube decreased.
- Brand sites with social sharing recorded annual traffic growth of 42 percent versus 18 percent for brands without social sharing suggesting the increasing importance of social media optimization.
- Digital competence leads to more site traffic. The 21 brands that increased their Digital IQ demonstrated annual traffic growth of 52 percent versus traffic growth of just 8 percent for brands that registered IQ decreases.
- The 39 brands that sell online boast a Digital IQ of 117 versus an average IQ of 79 for the 33 brands that are not e-commerce-enabled.
- Only half of brands engage in email marketing, only two in five are purchasing search terms and only 10% have mobile sites. "
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