How is digital shaping the luxury industry?

At the beginning of 2016, the luxury fashion industry saw digitalisation and eCommerce as one of the top opportunities for businesses to utilise. In 2017, the luxury industry is focusing on customer engagement, omnichannel integration, product innovation and digitalization of the value chain, according to a report released by McKinsey and Business of Fashion, The State of Fashion 2017.
“62% of Fashion executives continue to see competition from online players as one of their top three challenges for next year”  

Top 6 opportunities

The current state of the market means that if you are part of an eCommerce business, things are moving so quickly that if you are not protecting yourself by investing, you may fall behind.

Some of the trends that represent those opportunities go from marketing automation (facebook chatbots) to the use of advanced materials (Marchesa and IBM’s dress), virtual reality (Piaget Polo Experience) or “See now buy now” concept from brands like Burberry, who were pioneers allowing their clients to buy the collection at the same time as soon as the catwalk finished.

Which digital trends will make a difference for luxury brands?

It’s been very interesting to see how in the last couple of years everyone shifting to having websites and be mobile apps. Everyone was investing a lot on websites and mobile, just because ‘everyone’ was on it. What’s interesting to see in terms of where digital is going is to look at what’s coming out from Asia. We should be talking about the whole retail approach, where digital is one part of it. In Asia, we’re seeing this at its most, with apps like the Line and Weibo where everything happens inside of that interface.

Convenience is becoming the most important factor. Luxury has always been perceived as a slow industry sector throughout the entire process, from the time you order a product until you receive it. Increasingly people expect this kind of sense of instant gratification. So when they get that from every other industry, it’s interesting to look at how the luxury sector responding to that

Luxury industry are trying to still offer the bespoke and personal touches that the clients expect, no matter whether it’s online or offline. Some luxury products can be complex and the consumer often wants to hear it all about the product itself. They want to know more about it and understand both its technicality and authenticity.

What has positioned Gucci as a leader in digital luxury?

Gucci has become a luxury digital leader in the last two years. They’ve shifted their focus quite notably in the last few years. They’re focusing much more on the millennial market than any other brand. The company’s revenue YoY rose 12.7% to $4.5 billion,  raising 21.4% to $1.45 billion in the 4th quarter alone.

This was largely due to Gucci’s appointment of a new Creative Director who is really driving this vision. He’s encouraging a very collaborative approach and handing the creative agency to makers, creators and artists who are the ones controlling these digital campaigns.

It’s really interesting how they’re creating a community and a conversation through those actions. They use influencers like Petra Collins, who was featured on their Snapchat talking to viewers and giving backstage access at events, which make people feel that they are engaging with the brand and their values in a more real way”.

Luxury brands often think they need to be serious and remain in line with the traditional origins and values of their trade. However, they need to realise that they can still be fun and playful with the brand, and use a combined marketing approach to staying up to date with current consumer practices. The accessibility to the brand is key.

Consumers go on the Gucci site because they want to shop and see the collection. They can see the runway looks from the front and back and shop every single item. It’s all immersive. Their video marketing is very strong with adverts, catwalks and even  short films like ‘The Performers’ in collaboration with British GQ.

Digital is not the only focus and traditional marketing is still present. Although there are digital many digital playful campaigns, there is a lot of concierge service and in-store high-end experience that keeps the brand identity at its top.

Generation X vs Generation Y

Brands have become obsessed with millennials, and some suggest they are often forgetting that Gen X and baby boomers are the ones that can afford to buy their products. So, why are luxury brands so focused on the millennial market? A lot of brands should really take a step back and think about who should be communicating with, and who is appearing in their campaigns. Using young models shouldn’t be the focus for all brands as they all have different targets.

The power of Influencers

We increasingly see influencers taking a more significant role in marketing as they continue to grow and refine their audience, and we now have more knowledge of how this industry works and luxury is taking advantage of it.

On occasions, brands get blinded by the number of followers an influencer has but, if no one is biting on that content, then you know their audience is not right. Influencers are very authentic, true to their personality and that’s why their followers commit with their message. The added value is that they give us the opportunity to show the product and associate it with a specific lifestyle. In addition, influencer marketing can help to measure whether there is a positive or a negative response from the comments, reactions or engagements.

To answer the question of how to measure the impact of influencers brands need to think about  this idea of the ‘attention economy’ and how it has become the brands’ ultimate goal. It may not be a true measure of engagement anymore. A lot of people are talking now about the Dark Social as a way to engage with true fans of the brand. You’ve got people like the nail brand who has WhatsApp groups to respond to her fans and interact on a daily basis with them. You can’t measure that engagement. They recognise that the consumer who is engaging with them in that way, is not necessarily engaging with the influencers who represent that brand. These fans are spreading this message through channels that you cannot actually measure the ROI.

As Mark Zuckerberg states, “messenger is the new social media” people spend most of their time using these platforms to communicate rather than regular social media.

Another interesting trend  was when influencers with big followings actually create collections for brands. They take them to the Head Office, embrace the brand vision and then create the collections and sharing the process of creation on their social platforms.


Today’s consumers are “always on”—better informed, better connected to others, more demanding, and more conscious of values and authenticity. We are seeing a global trend for convenient, on-demand products and services.

As an example, there are a few luxury handbag brands that you have to wait a year to receive the product. Whereas now you have companies like Net-a-porter when you can have same day delivery.

In luxury, people may want slower experiences – that’s what some people say. However, if you think a high-end consumer also wants to be able to order to order a taxi instantly, and order products using Amazon’s Alexa to get next day delivery, that consumer’s profile is now expecting this instant gratification from all other industries.”

However, for every Trend, there is a counter-trend. People want to see the slowness and the craftsmanship. If you’re walking into a store and you can’t buy the product displayed, there is a contradiction in the consumer’s mind. That applies online as well. Net-a-Porter is doing great by being very transparent with their stock management. If the product itself is sold-out, it’s not online. If a product needs that extra production time, then there needs to be a justification and understanding of how rich is that production process.”

Data from influencer marketing platform MuseFind shows that 92% of consumers trust an influencer more than an advertisement or traditional celebrity endorsement.

Traditional advertising is not coming to an end, but it is  evolving. What Moncler did with their in-store visual campaign or Calvin Klein’s printed ads are simply brilliant. Marketers are just taking traditional to the next level, having better creative direction and expanding on digital channels.

Brands will focus on broader marketing channels. Marketing analytics tools allow brands to track absolutely everything online. The progression from this is to assess more accurate results from all different marketing channels. This will allow brands to focus on the marketing channels that give better ROIs.

The  biggest trend for brands to invest in are digitalisation of supply chain, consumer experience and AI.

The biggest trend is not a trend. Digital and technology on catwalks have been overused. It was kind of throwing technology at clothes for technology’s sake. It’s interesting to see that innovation is coming from the systems’ change. It’s coming from brands exploring how they can transform their manufacturing process, allowing the process to deliver the customer experience in a smoother and cohesioned way. So,  innovation is coming from inside brand’s supply chain process. They also want to share how they are empowering local businesses through production.”

Artificial Intelligence is obviously something to be excited about it. Brands are responding into that by embracing this technology. This will definitely affect the retail experience.

This new digital trend will massively improve consumers’ experience if we address it in the right direction. For instance, with the apps’ boom, some of them were awesome but were never updated, so they missed an opportunity when the consumer evolved. This is exactly is where brands should be investing, looking at what consumers want to buy, how they want to do it and through which channel. They need to think about how to make the customer’s journey as smooth as possible in both a digital and physical sense.

Fast fashion, online retailers, everything is moving as quickly as it possibly can. Some brands might be compromising their brand to adapt to it, however, the value of brand identity is something that cannot be overlooked.