‘Sophistication, opulence, timeless:these words are the cornerstones of luxury brands. But how, in fact, does a brand remain timeless in the digital age?’ Gabriel Shaoolian questioned this in Huffington Post (081417). She added, ‘It evolves its marketing strategy to meet the changing emotional and physical landscape of its consumers, and it uses modern technology to conquer new platforms and expand brand narrative along the way.’

McKinsey stated that ’40% of all luxury goods purchase decisions are influenced by what consumers see and hear online. That means, in an industry with more than $280 billion in sales last year, online-influenced purchases accounted for more than $100 billion in revenue.’

Social media, previously seen as too mass marketing, has become an increasingly important marketing tool for luxury brands and especially for luxury retailers. They are turning to social media in an effort to stay engaged with consumers as well as create new revenue streams, according to a top Facebook executive. ‘Generally speaking’, stated Matt Jacobson, head of marketing development at Facebook, told the South China Morning Post, ‘the biggest luxury brands are normally the last to innovate, but some of our best work has come from Hermès, Rolex, Porsche, LVMH, Gucci and Chanel as a way to directly connect with customers. This idea of brands connecting more directly with consumers, that’s a powerful trend. Luxury brands need to maintain a high level of customer service, amid a level of aspiration that doesn’t exist for other products.

Luxury firms themselves admit they are late to the game when it came to adopting a digital approach, but said they now see it as complementary. ‘In the past, the marketing budgets across our brands were dedicated to glossy magazines’, Vispi Patel, LVMH states. ‘We don’t spend even half of what we did on traditional advertising compared to five to seven years ago. We have adopted an ‘omnichannel ecosystem’ where the company’s e-commerce offering works alongside the brick and mortar stores.

CNA|SOPHIS’ ‘RetailPositive’™ has brought social media to the forefront for retailers and brands by proving over a 24 week period, positive increases in traffic (both into brick & mortar as well as web-space), sales and ROI.

Social media exposure saves retailers and brands mostly by allowing them to reach wider audiences more organically. Social media ensure that retailers and brands can reach consumers who are interested in the brand, while traditional advertising forces retailers to take a less targeted approach. CNA|SOPHIS clients have saved 20% of their annual marketing budget while increasing their traffic and sales. According to Tribe Dynamics, Chanel and Gucci saved the most through their social media campaigns.

NetBase’s Retail Brands Industry Report reveals that passion and sentiment for luxury brands are mostly driven by the search for authenticity. ‘Being successful on social media isn’t just about volume, audience size or a specific content strategy, it’s about creating a meaningful authentic connection to your customers’ stated Elvis Lieban, NetBase. ‘While the top 10 is made up of big household names like Amazon, Nike et al, smaller brands can still win at social media by focusing on fostering a real connection with their audience’, he said. While the luxury sector is small by comparison to other sectors, luxury is the top industry in sentiment. It elicits passion from its consumers.

So what are they using? Instagram is now the top social media site for luxury retail shoppers in terms of both followers and engagement, according to a study by PMX. Instagram saw a 54% increase year-over-year in luxury retailer followers from last June, giving it a 50% share of total users following luxury retail brands on social media.

Luxury brands on Instagram also take the lion’s share fo total engagement on social media, which included Facebook and YouTube. Instagram had 93% of total engagement, measured by likes, dislikes, comments, shares, reactions, retweets, and favorites, in the past 12 months. It claimed 873.1 million likes and comments, with the next highest site, Facebook, coming in with 52.9 million reactions, comments and shares.

With Instagram’s sway over style purchases, more followers and higher engagement rates could increase luxury retailers’ conversion rates. In a separate survey by Dana Rebeca Designs, 72% of 2,000 Instagram users reposted purchasing a product they saw on the platform. Brands that have a large and active following on Instagram are particularly well poised to capitalize on this, and could see a lift in e-commerce sales rom their social media efforts.

Offering access and interaction drives consumers to favor luxury brands that offer building relationships, opening conversations and other opportunities for experience with the brands. Not only will they likely visit a store and make a purchase, they will potentially become a brand’s most valuable marketing tool.’, stated Emma Fisher, HPS, writing in The Drum (111417). ‘With a significant 57% of luxury goods consumers placing word of mouth as the greatest influence on their purchasing decisions, luxury brands and retailers investment in social media is being led by a nation of mobile shoppers.’

Luxury brands and retailers have embraced the digital influence, blogging, vlogging, relying for sharing favorable opinions with their loyal followers. By driving social entrepreneurship, these brands are stepping away from the classic approach to the impressionable yet affluent, embracing the power of social and digital media to inspire a new generation.