Luxury is in the midst of a deep digital transformation that goes beyond the shift in luxury retail. High-end brands now have access to innovative new means to reach and engage their affluent audience. New opportunities arise as luxury brands speak directly to their customers and position their offering in unique new ways. Words by Jonathan Parker
Some brands have embraced digital better than others, as evidenced by their popularity online. According to a new report by Luxe Digital, the top 15 most popular luxury brands online are particularly successful at building online awareness but also at forging deep emotional connections with their audience—particularly young affluent consumers.
The ranking provides a good gauge of the sales potential of the brands for this coming year-end. It’s also a great source of inspiration and best practices for luxury leaders. By exploring how the top high-end brands are performing online, we can understand the reasons for their popularity and how their approach could be replicated.
Gucci is leading the 2018 ranking, followed by French houses Chanel and Louis Vuitton.
Interestingly, it is Italian fashion brand Balenciaga that saw the most impressive growth thanks to its fresh take on luxury streetwear.
The Direct-to-Consumer approach emerges as a winning strategy for luxury
The ranking is largely dominated by fashion brands, although Rolex and Tiffany made it to the top 10. It is worth noticing that Lancôme is the only beauty brand to appear in the list, finishing at the 13th position.
A noticeable trend highlighted by Luxe Digital is the Direct-to-Consumer (DTC) retail model which is increasingly more adopted by luxury brands. The DTC approach emerges as a great way for high-end brands to control their brand identity online and own their customers’ data.
Influencer marketing is also playing a key role in 2018. Virtually every brand in the top 15 has collaborated with social media influencers to shape the conversations online and drive brand discovery amongst untapped audiences.
For luxury fashion specifically, high-end streetwear is clearly making the buzz this year. Other noticeable trends for 2018 include more interest in sustainable practices and social causes. Natural cosmetics, natural and vegan beauty products, in particular, are also generating a lot of online interest.
The rising share of affluent Millennials and Gen Z consumers
These trends are mainly driven by the growing portion of more socially-conscious, affluent Millennials and Generation Z consumers. This shift in consumers’ values and preferences combined with the disruptive impact of new technologies are challenging the traditional notions of luxury.
As the sophisticated younger generations become important luxury shoppers, modern luxury brands are evolving their offerings to appeal to their specific tastes. Luxury brands are also adapting their marketing strategy to offer a seamless shopping experience both online and offline in line with the younger affluent consumers’ growing expectations.
Conscious of the essential role that new technologies play in driving their narrative, luxury leaders are finally embracing digital technologies.
For brands, it is clear that the ability or inability to pivot to this new reality will continue to widen the gap between the successfully agile luxury brands and the slow adopters.
If you are curious to know how your brand would benchmark against the 15 most popular luxury brands of the year, Luxe Digital shared their methodology in details so you can easily reproduce their evaluation process for your own business.