Like in most other industries, digital marketing (more specifically, online advertising) is playing an increasingly important role in the success (or failure) of businesses in the luxury sector.
Global giants like Dior and Louis Vuitton have set up e-commerce platforms in key markets across the Gulf region; others like Christian Louboutin recently followed suit, a clear indication that brands looking to the future are turning to digital roadmaps, as it were, to find a clear path to growth, even (or especially) in times of the pandemic.
It is all too easy to overstate the importance of digital marketing, but for those who are not careful, mistakes can easily be made; and can be quite costly.
Having worked on many digital marketing campaigns for luxury brands in the region, I have observed many challenges that many upmarket brands struggle with while implementing their online advertising initiatives.
Here are a few:
Brand image challenges usually occur on two major channels. Search ads are one, and this is where luxury brand stewards need to ensure that any negative keywords are excluded that could affect brand perception.
One would think that “cheap” or “inexpensive” would never be associated with luxury. But believe it or not, affordable luxury is a concept that is becoming popular with consumers in the last couple of years.
A recent study found that consumers during the pandemic are more likely to wait for a promotion on a luxury item, instead of buying it at the usual full price; some would even go for flexible payment terms if offered as an option.
Without stating the obvious, this is a challenge that luxury brands need to address - whether it should embrace this emerging consumer behavior without diluting their brand value, which they have heavily invested in for years.
The other major channel where this challenge figures prominently is in social/web ads.
Imagine a luxury brand ad placed next to a pandemic-themed story or to content that does not reflect the brand’s principles and beliefs. This is a nightmare for marketing managers of luxury brands.
At the advertising channel level, this can usually be avoided through specific targeting for audiences and content where the ad will be shown.
More specifically, at the brand level, this can be avoided by using tools like Moat. Some tools can only tell you where your ads are being shown; they cannot prevent instances such as in the aforementioned example from happening. But with the use of Moat technology, marketers can ensure their brands are shown on pages with relevant content.
Even for those with experience in managing digital marketing campaigns, the usual pitfall is conversion. Some of the related challenges regarding this concern can include pricing comparison/competition, such as when major online retailers or brand aggregators sell the same products, but usually at a lower or discounted price.
This is a major challenge for many luxury brands, one that can only be addressed by offering added values, such as free and/or faster delivery; or perhaps making the luxury brand’s offer more enticing with rewards or certain exclusive benefits (such as first-to-own, or exclusive availability for certain models or product ranges).
It can really be a challenge for luxury brands whether to sell through their own virtual shops or through online retailers.
Online shops have enticed many luxury brands, offering many perks to the latter such as avoiding the hassle of managing the online shop, deliveries, and other technical or logistical challenges.
I always ask my client: what is the cost of not doing it? Cost of not owning your data? How can you invest in the future of AI? How can you maintain your customers and engage with them? How can you reach out to them with individual and customized offers?
I really believe luxury brands should utilize all channels to increase their sales; each brand could be different but being open to multi sales channels can help the brand reach its marketing goals more efficiently.
Digital marketing can be a valuable tool in achieving these objectives, and overcoming the challenges mentioned above, among many others for sure, can help lead to present and future success.
About the Author -
Abdullah Wreikat is the co-founder of Pixel Pure Hat, the first native advertising platform in the MENA region. Since 2014, the company has delivered over 8,000 performance-based campaigns regionally and globally for over 100 clients.
He is also a mentor and an investor in some digital start-ups and a digital marketing consultant for global companies operating in the region