06 December 2013 | MOF Team
If you were asked to describe the average luxury consumers ten or fifteen years ago, there is a distinct possibility that that person would be a Western fifty-something with decades of wealth and traditional taste dictating their spending habits and high-end buying power. Fast forward to today, and that same luxury consumer is more likely to be based in Asia, and not a day over 35.
The changing face of both high-end consumers and the market as a whole has presented brands and businesses with the challenge of keeping up to date with demand, styles and tastes in this new global luxury arena.
Working consistently with boutique luxury business, Matter Of Form have learned to adapt their digital marketing approaches in this same manner, by targeting aspirational - and future - customers via more accessible platforms such as social media and paid advertising, whilst engaging with repeat and loyal high net worth buyers with strategies tailored to their emerging preferences, tastes and interests using bespoke content across digital campaigns and online arenas (such as webpages and discussion boards) created and run solely by high net worth individuals. This approach has allowed Matter Of Form to engage a broad and comprehensive audience using targeted and well positioned online strategy. A number of big-name, high-end brands have utilised these techniques with staggering success, which are explored within this report.
Within this luxury sphere, sales of watches, jewellery and mobile phones have sky-rocketed, with watches and jewellery making up twenty percent of all luxury goods sold in global markets. This increase can arguably be attributed to a shift from unattainably expensive accessories to a more 'affordable luxury' approach now favoured by brands all over the world to maintain their relationships with existing, valued customers, as well as introducing a whole new bracket of consumers to their products, increasing brand awareness and sales worldwide.
Whether you are purchasing a watch for $1 or $100,000, the two products exist to produce exactly the same service - telling the time. However, a luxury market exists in a sphere where the time must be surrounded by polished diamonds and silver in order demand to be read. Until the 1980's luxury brands were almost exclusively family owned and run, creating markets that were only accessible to those with heritage and notable wealth. However, in the 1990s, Louis Vuitton Moet Hennessy (LVMH) was one of the first empires to break from this norm, and luxury goods began to become financial assets and commodities instead of family heirlooms.
3.4 billion people around the world use a mobile phone, with huge numbers of those using theirs as their sole device for reading and checking the time, putting pressure on luxury watch manufacturers to create timepieces that stand out in order to continue to flourish in today's retail climate. Consumers in low-to-medium income brackets tend to pass on purchasing averagely priced, or easily affordable, watches as their mobile phones serve that purpose for them. Watches must be something worth purchasing and showing off in order to maintain their relevance in emerging and established luxury markets worldwide. Christoph Behling, Chief Designer of high-end watch manufacturer TAG Heuer, himself said that "for decades, a beautiful watch was the most personal product on a person's body - in the 21st century, that's become the phone."
Darling of the jewellery world Tiffany & Co., for example, launched its 'Engagement Ring Finder' app for iPhone in 2010, bringing its aspirational accessories brand to a wider and broader economic spectrum. By offering a slice Tiffany magic to users worldwide through a free mobile app, those who had previously only aspired to own one of the brand's iconic turquoise boxes were granted immediate and unabashed access to the jeweller's catalogue and collections. Research has shown that online websites account for a fundamental 40% when creating and nourishing customer relationships. By providing instant access to valuable information such as catalogues, pricing and sales locations on mobile devices and desktops, not only does stimulate customer curiosity, it also creates a significant link between the online and offline representation of products.
Tiffany are such a successful luxury brand worldwide as the company are active across all marketing platforms, including print, television, social media, mobile applications and digital media. In 2012, following their number one ranking the previous year, Tiffany emerged as the only brand on L2 Think Tank's new Digital IQ Index: Watches and Jewellery to be rated 'Genius.' The historic business has tackled the difficult task of allowing a high-end brand to become accessible, yet remain aspirational, by releasing content that not only delivers product information, but also marries beautiful design, thoughtful copy and emotive imagery across multi-channel platforms to engage and inspire all levels of consumers - from loyal buyers to window shoppers.
Launched in 1837 by Charles Lewis Tiffany and John B. Young, Tiffany established itself as a jewellery seller to the wealthy by marking individual prices on all products to deter against haggling, and only accepting cash payments, making purchasing difficult for those without notable disposable income. Tiffany & Co., over the past 150 years, has diversified into ranges of 'affordable luxury' jewellery to suit emerging high-end markets, as well as the changing financial climate globally and nationally in the US.
In 2008, Tiffany reverted back to the wealth-specific products that its initial success was based upon by collaborating with Japanese mobile phone company SoftBank to create a line of just ten devices, each retailing for more than £780,000, coated in 400 perfect Tiffany diamonds.
Another brand to sell seemingly unattainably expensive devices is British manufactured, Finnish founded Vertu, which offers high-end mobile phones designed and marketed specifically to be treated as fashion accessories above communications devices, due to their hefty pricetags. Based out of a factory in Hampshire, South-East England, and sold for a reported $200million by creators Nokia in 2012 to EQT VI, Vertu place its product emphasis on the craftsmanship, style and service of its devices rather than their functions as mobile phones - a controversial angle from a telecommunications company. Founded in 1998, over 370,000 Vertu phones have been sold since the company's inception, which is the number of handsets Apple typically sells in a day. Whilst that may sound like a failing business strategy, it must be noted that the cheapest Vertu model costs over £3500 more than an iPhone, and each model features a full sapphire screen and inlaid rubies to justify that price.
It is these extra luxurious touches and embellishments that leave Vertu phones more at home in the jewellery counter at Selfridges, instead of within the technology and telephone sections downstairs. Voted the world's best department store, the London designer flagship shop sells the British devices alongside its selection of luxury watches, cementing the Vertu as more of a fashion accessory than a mobile phone.
Chief Executive of Vertu Massimiliano Pogliani himself is quoted to have said "any luxury item is something that you don't really need" and the 'mobile luxury communication experience's he fronts fit within that category as if it were tailor made for the brand.
Outside of the mobile phone sphere, in other high-end retail areas it is generally agreed that the higher the price of a product, the higher the quality of the components, aesthetics and - where relevant - the technology of the piece will be. However, when it comes to phones, consumers largely prefer to purchase a £700 iPhone that can do 100 different things over a $20,000 Vertu device that can make calls and send text messages.
When purchasing luxury goods, consumers are not only paying for the physical product that will sit in their hands or on their wrists, they are paying for the dedicated man hours that went into the creation of that masterpiece. When buying mass-produced, far more affordable items, its is often the result of a factory production line requiring minimal - if any - quantifiable man hours , which is reflected in the price. Successfully leveraging this high-quality, low production numbers angle in digital media and marketing results in awareness created for both the goods, and their production techniques, furthering public and buyer interest in luxury products.
High-end goods are designed, created and marketed to make an impression on both their immediate and inspired audiences, whether that reaction is desire or confusion. In the case of Vertu, those who cannot ever comprehend affording to use one of the British devices tend to dismiss the products as a waste of money and effort, yet that brand has demanded their attention and affected their purchasing decisions, resulting in effective marketing and reach. Brands such as Vertu, Tiffany and TAG Heuer implement well-positioned digital marketing strategies - featuring luxury products to inspire, and famous faces to entice - which bridge the gap between the aspiration high-end jewellery and tech markets, and the every day consumer who may or may not have the means to purchase these products, bringing the luxury sphere to a far wider audience.