The industry’s biggest challenges and opportunities for luxury brands revealed
A new survey among 600 luxury industry executives and companies that support the luxury industry in marketing, advertising and technology strategies found that the industry’s biggest challenges and opportunities for growth revolve around the same trend: the rise of the digital economy.
“The digital revolution continues to disrupt business as usual for luxury brands,” says Mickey Alam Khan, editor in chief of Luxury Daily, co-sponsor with Unity Marketing in the State of Luxury 2018: Insiders View study, the second annual survey of its kind. “This year, however, the survey shows more luxury companies have embraced the potential that Internet marketing and ecommerce represent,” citing the finding that 68% of luxury goods brands now sell goods over the internet, as compared with 62% in 2017.
In addition, social media advertising and promotion is where the largest number of luxury goods and services brands will invest their advertising and marketing budgets in 2018, followed by website enhancements and internet advertising, such as Google Adwords.
Further, the survey results also reveal that traditional print advertising is losing relevance to luxury brand as a means to reach the target customer. Only about half as many brands report they will be allocating advertising budgets to print this year, as to social media.
“The search is on for the next generation of luxury consumers and increasingly luxury brands realize that they must troll the internet to find them,” Pamela Danziger, president of Unity Marketing and lead researcher in the study, says.
“This year’s survey found 58% of luxury goods and services companies will invest more on advertising and marketing in 2018, a marked improvement over the previous year, “ Danziger notes. “This is a bellwether of strength in the luxury industry, as brands pick up the pace to attract new customers and communicate their branding messages through media that is most relevant to them.”
As luxury brands implement new-age digital marketing strategies in 2018, luxury insiders have a more positive expectation for growth in 2018 than they did in 2017. This year 47% of the insiders polled feel that business conditions in the luxury market will improve in 2018, compared with 43% last year. And over two-thirds (67%) of the insiders surveyed believe that business will improve for their company in 2018, as compared with 62% last year.
Luxury insiders view the changes in wealth distribution, particularly the rapid growth in the numbers of HNW and UHNW clients, as opening the doors of new opportunities in 2018. Also they report that these customers are increasingly willing to trade up to luxury rather than opting for lesser-quality, lower-priced alternatives.
While luxury brands face increased competition coming at them from all sides, including their luxury peer group as well as from emerging disruptive brands and encroachment from premium brands aspiring to join the ranks of true luxury, they are empowered by Internet and social media strategies to capture the imaginations and spending of the wealthy luxury consumers looking for the best and most exquisite goods and experiences.
This year’s survey reveals luxury insiders viewed the past year as a challenging one in business, but they see a better year ahead in 2018. “The insiders surveyed believe they have strategies in place to respond to the shifts in the market that will enable them to overcome the headwinds they faced over the last few years,” Danziger concludes.
Get your copy of the State of Luxury 2018: Insiders View now
See how your peer group, your competition, and your business partners view the opportunities and challenges in the luxury market in 2018. The State of Luxury 2018: Insiders View study provides data and analysis about where the luxury industry is today, where it has come from in 2017 and where it is going in 2018.
The survey results are made actionable by providing perspectives on what the survey results reveal about the current state of the luxury industry with comparison to the findings from last year. It is an essential tools for luxury executives to develop strategies for success in the rapidly shifting market for luxury.
About Mickey Alam Kahn, Luxury Daily
Mickey Alam Khan is is editor-in-chief of Luxury Daily , the world’s largest luxury business publication. It is part of Napean LLC, a New York-based publisher whose portfolio includes Luxury FirstLook, Luxury Roundtable, Luxury Retail Summit conferences, and Luxury Daily Awards. Contact: email@example.com.
About Pamela Danziger, Unity Marketing
Speaker, author, and market researcher Pamela N. Danziger is internationally recognized for her expertise on the world’s most influential consumers: the American Affluent, including the HENRYs (high-earners-not-rich-yet) mass affluent.
As founder of Unity Marketing in 1992, Pam leads with research to provide brands with actionable insights into the minds of their most profitable customers. She is also a principal with Retail Rescue, which offers focused and effective consulting, training and mentorship in retail management, marketing, sales and operations.
Pam is a member of the renowned Leaders in Luxury + Design panel recognized by The Home Trust International. She received the Global Luxury Award for top luxury industry achievers presented at the Global Luxury Forum in 2007. She was named to Luxury Daily’s Luxury Women to Watch in 2013. She is a member of Jim Blasingame: The Small Business Advocate’s Brain Trust and a contributing columnist to The Robin Report and Forbes.com.
A prolific writer and blogger, Pam is author of eight books, including her latest Marketing the Luxury of Interior Design. And with Home for HENRYs: Meet the New Customers Home Décor Marketers Are Searching For — High-Earners-Not-Rich-Yet, she launches a series focused on the mass-affluent HENRYs who are the changing face of America’s affluent consumer marketplace.
In 2016 she added Shops that POP! 7 Steps to Extraordinary Retail Success, to her bibliography. It reveals the secrets to crafting a retail shopping experience that’s irresistible to high value shoppers.
As a luxury market expert, Pam is frequently called on to share research-based insights with audiences and business leaders all over the world. Contact: firstname.lastname@example.org.