Digital strategies & luxury brands, the wide gap

We keep repeating it but digital is playing an increasingly important role in the marketing and communications strategies of luxury brands. However, they are struggling to allocate more resources to it. According to the study published by Exane BNP Paribas, which classifies luxury brands according to their digital engagement and reach, digital should feed an average of 40% of the growth in the luxury sector, between 2014 and 2020.

The internet is full of opportunities!

Even as industry sales strictly related to digital should only exceed 10% in 2014, consumers are increasingly shopping online. For two reasons: firstly there is less physical stores openings and secondly, the online shopping offers the convenience where the consumer has not necessarily neither time or motivation to go confronting the crowd. In an ideal world, the brands would like that consumers go to their their stores. Yes but now, the world is changing and it has been changing for quite a while. Brands need Internet as a lever for growth now more than ever, as they needed abroad a few decades ago.

It does pay!

Brands that have undertaken investing in digital (in the marketing of products first, then in their communication) see the fruits of their investment. Burberry, as the leading e-commerce Strategic reach (= depth and breadth of the product offering) features an e-shop available in many countries, many languages available, tailored products and categories… But in terms of user experience quality (quality of navigation and process of the online purchase), the brand stands behind Louis Vuitton, Gucci and Tiffany. Louis Vuitton in particular, has adapted its user experience to the zeitgeist by revamping its site in late July, offering one of the best digital experience in the study sample. The brand was not idle either on its digital communication and has also recently given his Instagram account to its artistic director Nicolas Ghesquière during Fashion Week. But so far, its digital strategy is not optimal: no e-store in China, no ready-to-wear available online. As for the other French luxury brands, they are in the middle of the pack (Hermes and Saint Laurent still have e-stores, although they could be improved, “completed”) or trolling for Dior, Celine, Givenchy and Chanel. Although the brand has gained more followers 1M8 on its newly launched Instagram account (we’re in 2014 guys!!), its almost total lack of e-commerce offers (except for the beauty in the US) gets the brand out of the game.

LVMH lagging behind, Kering saves the day

These gaps reveal the absence of a coherent digital strategy within the LVMH group, in total opposition to Kering, which benefited from the joint venture with Yoox in August 2012, the report said. Italian brands of Yoox Group, Armani, Valentino, Cucinelli, Moncler, improved their e-commerce Strategic reach but are still penalized by the lack of customization offered by their websites: no common services across its platforms, limited flexibility with shipping. Other Italian brands (excluding Yoox Group) are also in the middle (Tod’s, Loro Piana) or trolling (Bulgari, Ferragamo, Prada, Fendi).

“The CEOs of these companies should put digital engagement among top priorities of their agendas. If this is the case, things are done. If not, the subject is buried away in the organization and nothing gets done. “

So dear luxury brands, shall we go?

Digital Competitive Map (July 2014) | Source: Exane BNP Paribas

“Digital Competitive Map” (July 2014) | Source: Exane BNP Paribas

The study was based on 14 criteria, broken into four categories, for a total of 66 parameters.
1) depth and breadth of product offer (e-commerce strategic reach);
2) ease of navigation (on multiple devices) and quality of website experience (website
3) delivery, service and return policies/performance (e-commerce experience);
4) cross-channel integration (cross-channel experience).

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