4 Key Digital Insights for Luxury Fashion & Beauty Brands with L2 Co-Founder & Head of Research, Maureen Mullen
On which luxury sector currently flourishing in the digital realm:
Beauty is definitely flourishing. L2’s 2014 Beauty study shows the industry to be anarms race, with an explosion in digital spending overall. Digital spending wasup 23% year over year at the time of the study; while traditional media spend is flat and even starting to decline. Most of this digital media budget goes to paid search, where spending is up 75%, in contrast to 13% across all industries. Nearly 40% of Beauty brands were in the “Gifted” category of L2’s 2014Digital IQ Index®, up from less than 30% the previous year.
On brands that are successfully bridging digital and on-ground marketing efforts to generate win-win results:
A few fashion brands have really raised the bar for a channel-agnostic consumer experience. When a consumer looks up an item on the Coach and Tory Burch product pages, she can see whether it’s available in nearby stores as well as online. Coach was definitely a pioneer in this area, and continues toprovide the most channel-agnostic shopping experience among Fashion brandsin the Digital IQ Index®. Tory Burch has a superior mobile experience relative to most brands in the Index, featuring click-to-call for the nearest store and shortcuts to internal pages (like sales by product category). Its mobile app isvery content driven, featuring content from the “Tory Daily” blog to attract repeat visitors.
On what emerging brands can do to maximize their presence in the digital space:
Brands can maximize their presence in the digital space by adding mobile-optimized features: more sophisticated mobile sites, ability to shop on mobile devices, pay via mobile, join loyalty programs and more. They can also make the experience more personalized across channels, with tools such as the ability to identify a customer entering the store via smartphone. Only 6% of brand shave implemented this, although 39% plan to implement within two years.
On the best social platform for the luxury industry today for consumer interaction:
Fashion and Beauty brands on Instagram finds that engagement rates were much higher on Instagram than on Facebook or Twitter. For fashion brands, the average engagement rate is 0.59% on Instagram vs. just 0.04% on Facebook and 0.02%on Twitter. Beauty brands have a 0.79% engagement rate on Instagram, vs. a0.07% and 0.02% engagement rate on Twitter.
Consumers were engaged with fashion and beauty brands before some of themwere even present on the platform. By capitalizing on brand mentions by users,some brands have been able to exponentially increase their audience. There’s also a huge opportunity for brands to take advantage of user-generated content – which consumers trust more than branded content – and post on their own accounts and websites.