Luxury has always been cyclical. During the last five years it’s been ‘territorial’. But the sector’s amazing growth in South East Asia a...

How social media and e-commerce is now driving luxury business

Luxury has always been cyclical. During the last five years it’s been ‘territorial’. But the sector’s amazing growth in South East Asia and especially China has now slowed considerably.* Emerging markets’ rising incomes fuelled strong demand for luxury goods to migrate east. But many factors have caused maturing Asian consumers to
rein in their spending. The good news is that developed countries are set
to be the main beneficiaries of these changes. So now it’s airports, directly operated concessions within department stores and, increasingly, online sales that are all helping the sector to bounce back.

But an even bigger change is underway. According to Boston Consulting Group’s survey of more than 10,000 customers, social media and, the explosive rise in smartphone usage, is responsible for more than half of total luxury purchases.**

Living in the ‘conversation economy’, as we all do now, we’ve taken a look at how luxury brands can exploit the increasing growth in social media to enhance their online presence and build upon their reputation.

IN A WORLD OF SHARING……luxury brands need to adapt. Like everyone else, they can no longer resist the greater openness and accessibility expected from consumers.
The new world's dynamism, volatility and complexity no longer offers luxury brands the luxury of choice when it comes to whether or not they should change their traditional marketing values and practices.

CONTROL AND WHAT WE CALL 'UN-CONTROL' The increased focus on Western markets brings a new challenge: more developed societies’ brands are now controlled and shaped by consumers. Being part of these social and digital conversations is critical for brand success.

But we believe it is not just about joining these conversations. We believe that to create brand impact you need to change the conversation.

Brands want customers to follow them. To engage with them. Be hungry for information about them. Which they can pass on to their friends.

In their turn, customers are more than happy to engage with brands. All brands have to do, therefore, is be interesting. Meet customers on their level. Talk in their language. Our snapshot of the chattering, moneyed, classes who are your customers demonstrates their willingness to be actively involved and seriously engaged on social media. This means luxury brands really have to accept that they can 'let themselves go' a bit. Just a bit – no need for cartwheels! And then they can reap the rewards

of consequent customer un-control. Because that's what customers like and it’s what they’re doing: sharing and commenting and passing an opinion on…well, everything!

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