It goes without saying that the recession was a struggle for the retail industry as a whole (as it was for all of us). And the luxury sector was among the hardest hit. This is particularly true for brands that target aspirational luxury shoppers—those that want high-end goods but can’t necessarily buy them readily. Such companies were the most affected when people stopped spending.
If luxury brands have began to bounce back, it’s because marketers didn’t stop talking to these aspirational shoppers during the recession. Instead they focused on strengthening their relationships. According to the Luxury Institute, 25 percent of affluent consumers report that they have a relationship with a sales associate at a luxury brand. This group gives retailers twice as much wallet share; meaning, they spend twice as much.
Regardless of economic conditions, acquiring new customers and building a relationship based on trust has become essential for luxury retail marketers. And in a world of email, social and mobile, the opportunities for efficient engagement marketing are immense.
For retail marketers, email continues to be a central component of their online marketing efforts. The benefits of building an email database are especially pertinent for luxury brands. The DMA recently stated that email ROI is $43.62 and many industry experts estimate that this number is in excess of $118. Luxury retailers also view email as a great way to heighten the perception of exclusivity. Their email subscribers feel that by voluntarily opting in to receive emails from a luxury marketer, they will be privy to exclusive discounts, sneak peeks and offers that they wouldn’t have gotten elsewhere.
Email is also the gateway to social, which is attractive to many luxury retailers looking to develop social communities. A recent Nielsen study showed that the most active users of social networking sites also send and receive more email messages than anyone else. With this in mind, it’s easy to see how email helps marketers continue the conversation with people from the inbox to social media sites. Ouidad, an upscale salon and hair product company, and Lilly Pulitzer, a high-end line of resort wear, are examples of retailers doing just that. They use email to drive traffic to social media sites, such Facebook, Twitter and YouTube, where they can continue to build trust and long-term relationships with people interested in their brands.
Online outreach via email and social channels aren’t the only ways for luxury marketers to build relationships with people. Mobile is another channel luxury marketers are using to connect with people as well.
While consumers are spending more time on mobile devices, such as smartphones and tablets, they’re also integrating mobile devices into their shopping and browsing behavior. Luxury Institute research indicates that 76 percent of consumers compare prices via mobile devices, while a rapidly growing 27 percent have purchased via a mobile device. In addition, 21 percent of consumers have used mobile devices to look up product information while shopping in brick-and-mortar stores. After reading the above stats, it’s no surprise that mobile is a “must buy” for marketers. Retailers such as Paper Hat Press, which sells glossy custom children’s books, and Tommy Hilfiger use mobile to build meaningful relationships with people and reach them while they’re using mobile devices.
“Adding mobile ads to our marketing mix has allowed us to reach women, especially moms, interested in our custom children’s books on top mobile devices,” said Manish Naik, CEO, Paper Hat Press. “Mobile ads are the best way we’ve been able to generate new-to-file signups and reach the right audience for our children’s books.”
Consumer relationships that matter are those that transcend economic booms and busts. Also, marketers need to build relationships where consumers are—online and on mobile devices. Luxury marketers have seized on these two truths and are reaping the benefits. The rest of the industry is sure to follow.