Archive for January, 2014

Marketing to the Super rich

In the penultimate post in this three part series, we gained insight into the spending habits of the super-rich and were able to outline a few trends or patterns which could help marketers targeting this segment in reaching out to the people who matter. It is important to understand the peculiarities in the consumer psyche in this segment in order to effectively develop any marketing strategies targeting them. In this post, we shall look at some of the current trends in luxury marketing and also see exactly how brands are striking profitable conversations with the super-rich.

 

Mobile

Mobile is the hottest trend in luxury marketing today. A report by Fidelity Investments suggests 85% of millionaires use text messaging, smart phone applications and social media. Luxury marketers are creating highly customized and engaging experiences for their customers through smartphone and table apps, QR codes and mobile marketing in general.

Mobile marketing is particularly relevant for time-starved, on-the-move global citizens who may not have the time to visit physical stores or when they do, to check on the entire product range the brand has to offer. It is also a boon for those residing in smaller cities and towns, who have the means but not the access to luxury brands in their neighborhoods.

Luxury brands have been taking the mobile platform very seriously and many have launched mobile applications for smart phones and tablet devices. Fashion retailer Nordstrom for example offers a highly functional iPad application that allows users to explore their collection through a virtual dressing room. It also allows users to share the looks they create with their friends and check for the nearest store the clothes they have chosen are available at. Customers can also read other users’ reviews and also have fashion oriented conversations with other fans of the brand. It’s a lot of fun.

And it’s not just fashion, super luxury auto maker Rolls Royce also updated its iPad app for its Phantom and Ghost cars to allow owners and aspiring users to customize and personalize the Rolls Royce Phantom on their iPads. Swarovski allows women to browse their collection and recommend pieces to friends. Bloomingdale’s Big Brown Bag App allows users to find additional information as well as offers and promotions in store. It also allows them to scan bar codes and stay updated about in store events. In India, DIESEL designed an interactive installation (essentially, a 42” multi touch screen) in their stores that allowed users to mix and match styles and share them with their friends, in addition to helping users browse popular looks chosen by DIESEL stylists.

car pic for post

 

Thus, having a thriving and welcoming mobile marketing campaign is fast becoming a necessity in the luxury space. Marketers cannot afford to miss the bus as many fast movers are surging ahead on this platform.

 

Social

Social is another buzzword trending amongst luxury marketers for a while now. Affluent people are forming interest clubs with other affluent people online as they have done offline for years and purchase decisions are being driven by online recommendations and reviews from peers. In addition, people are consuming increasing amounts of content online and social is now one of the best ways to propagate branded content.

Burberry, the British brand has revived its flagging fortunes by running an effective social media campaign that helped the brand connect to its customers directly and showcase its products independently of the ‘chav’ image it had built offline. Burberry and their famous checks had developed an image as one of the most faked brands in Britain, and these fakes were routinely worn by violent football fans and street hooligans. This meant death for Burberry as a luxury brand, until they hired a new creative director who put the checks back on the inside of the clothes and focused almost entirely on their higher end products. Burberry has driven this change using online media and technology to connect directly with their customers as a brand and reassuring them of their lineage and focus.

One social media disaster however, has been Abercrombie & Fitch, the American cult brand famous for their casual wear range. They were the target of a social media campaign which asked users to post videos of them donating their A&F clothes to the homeless and the deprived, in protest of the A&F CEO saying his clothes were meant to be worn by attractive and fit people, and not by “fat people”. The protest has been a PR disaster for A&F and CEO Mike has had to issue a public apology for the same. This incident showcases the importance of effective online reputation management.

Brands like Victoria’s Secret and BMW on the other hand have used social media brilliantly by giving the medium the respect it deserves. Victoria’s secret runs promotions and offers discounts specifically for their fans, in addition to creating content specifically for social media. It has become the most talked about fashion brand on social media today and is definitely the most engaging. BMW made a series of brand movies with top Hollywood directors recently and released them to users only through their social pages. Such innovative strategies are required to get people talking about your brands today.

The best part about the social medium is that it allows customers to be a part of a global brand movement and get updates straight from the source. Customers thus become ambassadors of the brand and generate buzz in their private localized communities. DIESEL, for example has the highest number of fans on its global facebook page from India in spite of having global content and imagery with very little localization.

 

Events/ Causes

Events and causes have long been important to luxury marketers as a means to offer affluent people a chance to be part of their brand stories, a trend started by Tiffany’s more than a century ago. Today however, customers seek to be part of brand stories that are personalized and unique, in addition to being authentic and engaging. “The importance of experiential marketing is rising. It’s more than product- It’s about storytelling,” according to Jean-Marc Belliachi, Sr. Partner and global leader of BCG’s luxury, fashion and beauty practice.

Rolls Royce has played this game well. They gained access to high net worth customers through an event in Britain where they hosted select customers, prospective high net worth customers, special guests and media at their March Motor Works showroom in London over a weekend. The showroom was refashioned to be a 1960s dealership for the event complete with vintage signage, memorabilia, a large 1960s style safe and even showroom managers dressed in 1960s style suits and bowties. Scottish whiskey major John Walker & Sons is inviting its guests in the Asia Pacific onboard a yacht to partake in activities that explore the history of the brand, in addition to being a showcase event for their triple malt label “John Walker & Sons Odyssey.”

pic of ship

 

In India, the mobile and social platforms are yet to develop as much as they have in the west and events are still the medium of choice among luxury marketers. Ermenegildo Zegna did an event recently where they hosted a private art show at an art gallery in Mumbai for select guests and media. DIESEL launched its India store with a massive “Fake Party” which celebrated the many fakes the brand has spawned in the country, clearly in tune with its ironic positioning. The guest list however, was limited to a few select customers, brand partners and influencers. Roberto Cavalli (pictured below), Kenneth Cole and Renzo Rosso have all been in attendance at launch events for their brands in the country, indicating their seriousness in this regard.

event pic

In addition to this, the use of technology for innovations in Out of Home advertising, Print and Direct mail is also a big trend. Augmented reality is no longer in the realm of science fiction and the lines between offline and online are blurring fast. 3D printing has been a boon for customization and phone companies have started customizing phones for those willing to pay a premium.

We hope you liked our exploration into the lives of the 1%.  Do leave us a line in the comments if you have any specific opinion about the same.

  • Rahul Sharma
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January 6, 2014 at 9:24 am Leave a comment


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