A Report by Unity Marketing – Pamela Danzinger<\/p>\n\n\n\n
With e-commerce doubling its share of the personal luxury goods market<\/a> in 2020, from 12% in 2019 to 23%, and with its share expected to reach 30% by 2025 when it will become the primary channel of distribution for luxury goods, social media has become an essential part of every luxury brand\u2019s online strategy, until now.<\/p>\n\n\n\n People are speculating that it is just a marketing stunt to lay the groundwork for the release of its Spring\/Summer 2021 collection, similar to the tactics that musicians use before releasing a new album.<\/p>\n\n\n\n It\u2019s even more confusing since in October the company was looking for a new global social media manager to \u201cdevelop an overarching global social media strategy from a communications-only tool to a full funnel marketing capability.\u201d That announcement has been removed from the Kering website, but is still available in cache.<\/p>\n\n\n\n Having just completed an analysis of a luxury insiders\u2019 survey among some 500 executives working in or supporting the luxury industry, I wasn\u2019t so surprised. For the last three years running, that survey shows social media is grossly underperforming luxury companies\u2019 expectations.<\/p>\n\n\n\n In the latest survey, Instagram is the best performing social media channel for luxury goods and services companies, but best is a relative term.<\/p>\n\n\n\n Only 30% of luxury companies using Instagram said it is \u201cvery effective.\u201d Facebook\u2019s \u201cvery effective\u201d measure is about half that, or 16%. Pinterest and YouTube are 9% and 8% respectively, and Twitter, Snapchat, WeChat and TikTok\u2019s very effectiveness ratings are almost too small to measure. These social media channels have had consistently low ratings over the last three years.<\/p>\n\n\n\n \u201cWe have not found any marketing tool that produces leads qualified for our luxury products and service,\u201d was among the comments in that survey. And another said, \u201cSo far nothing is working. Social media is seeing no actual move to act.\u201d<\/p>\n\n\n\n With all the money, resources and effort that goes into social media, you\u2019d expect it to perform better for luxury companies. These results are especially revealing when considering that a majority are only going to invest more in internet\/digital, mobile and email marketing in 2021. Budgets for all others \u2013 direct mail, print, outdoor, radio and TV \u2013 are going to remain the same or be cut.<\/p>\n\n\n\n Advertising and marketing agencies that serve luxury brands are expecting a short fall this year. Fifty-one percent of the roughly 100 agency executives surveyed foresee a decline in billings. For them, internet\/digital, mobile and email marketing will grow, while a majority expect clients\u2019 investment in all other media to decline.<\/p>\n\n\n\n On the other hand, the advertising and marketing executives have a much different view of how well their social media strategies are performing.<\/p>\n\n\n\n Nearly two-thirds (63%) say Instagram is \u201dvery effective\u201d for their clients and 40% for Facebook. They also rate the other social media channels much more effective than company executives do. Twitter is the sole laggard, rated by only 10% of agencies as \u201cvery effective\u201d for clients.<\/p>\n\n\n\n The luxury companies\u2019 and the agencies\u2019 widely variant views of social media points to how differently each group measures effectiveness. For agencies, it\u2019s traffic, likes and shares. For luxury companies, it\u2019s sales that are generated from social media.<\/p>\n\n\n\n And this is why Bottega Veneta\u2019s decision, under creative director Daniel Lee, to exit social media may be a bellwether for an emerging trend. It doesn\u2019t work to attract the right people to a luxury brand.<\/p>\n\n\n\n Dubbed the \u201cQuiet Radical\u201d by British Vogue, Lee has been vocal about his disdain for all the noise on the internet. \u201cI don\u2019t think much of the digital presentations,\u201d he said in an interview with Cultured Magazine<\/em><\/a>. \u201cThey felt empty and took so much effort in such emotionally turbulent times, yet in the end, the concepts lacked depth.\u201d<\/p>\n\n\n\n What\u2019s worse, it hinders rather than aids the creative process. \u201cEveryone seeing the same things is not healthy or productive. It doesn\u2019t breed individuality.\u201d<\/p>\n\n\n\n And he asked in that September interview, \u201cHow can we speak to our audience in a way that works for them because, ultimately, they are the most important in all of this?\u201d He\u2019s apparently answered that question now.<\/p>\n\n\n\n Creativity is fundamental to luxury. \u201cIn the luxury universe, the constant challenge is to transform creativity into profitability,\u201d said Professor Maria Eugenia Gir\u00f3n, Luxury Brand Management executive programme, at IE Business School in Madrid.<\/p>\n\n\n\n And creativity is the underlying value for all Kering brands. \u201cBy placing creativity at the heart of its strategy, Kering enables its Houses to set new limits in terms of their creative expression while crafting tomorrow\u2019s Luxury in a sustainable and responsible way,\u201d the company says.<\/p>\n\n\n\n My suspicion is Lee will apply his amazing creativity to imagine a new, more effective way to use social media and other digital tools to achieve much greater things for the Bottega Veneta brand than it ever has before. The company didn\u2019t respond to a request for comment.<\/p>\n\n\n\n GQ<\/em>\u2019s Rachel Tashjain speculated: \u201cPerhaps the Bottega deletion is the ultimate act of stealth luxury<\/a> \u2013 it will now be a brand that travels strictly by word of mouth. If only the fans of a brand are posting about it, perhaps it will move like a secret throughout the industry, with It items popping up organically, by dint of consumer taste (imagine that!), instead of beaming down like a mandate from the corporate account.\u201d<\/p>\n\n\n\nSocial media over-promises, but under-delivers<\/h3>\n\n\n\n
Searching for a creative new strategy to attract luxury customers<\/h3>\n\n\n\n