A recent survey by Edelman showed that the most affluent consumers do not rely on P2P or WOM advice to guide their purchase decisions. As a result, by and large the most wealthy consumers online tend not to friend or follow brands on socnets. For the wealthiest classes brand loyalty is seemingly not communicated via digital affiliation and identification—which, in this digital age, leaves luxury marketers in a bit of a bind. Without user trends to track, it is difficult for social media initiatives to gain measurable brand engagement (and thus demonstrate ROI), when some of the familiar SM metrics (friends/followers/sharing) are ineffective. This matters especially to upscale brands whose market is obviously composed of the most affluent among us.
However there is a wrinkle here that may turn out to be an exception to Edelmen’s findings: although they might not always belong to the most affluent class, Gen Y is a key emerging target market for luxury labels. If online advertising surveys track only the most wealthy consumer households, they may miss recording a significant portion of GenY, a demo noted to be exceptionally scrupulous and value-conscious with purchasing decisions.
As reported in The New York Times and analyzed on the Millennial Marketing blog, twentysomethings are highly engaged with luxury brands, and this cohort is adept at social computing—something that Armani and LVMH are well aware of—two examples of luxury labels with iPhone apps, Facebook pages, branded YouTube channels, and the like.
And in fact many a luxury fashion brand, and the fashion industry as a whole has begun to embrace digital technology, as is evidenced by LG Fashion Week events, and by The New York Times‘ observation: “As the fourth and final round of the international collections opens in Paris on Wednesday, the buzz is more around live-streaming shows and 3-D technology than about seasonal trends.” Live streaming this event programming is part of a Web 1.0 broadcasting mentality that, while it serves many purposes in making the shows accessible to multiple audiences, is not well suited to digital native consumers (who want their media on-demand).
However as news about the collections is increasingly communicated in shareable bits via web 2.0 channels, we can expect to see a cultural shift toward social shopping and luxury brands courtesy of millennials—as the GenY and GenZ cohorts increase their spending power and exercise their love of labels and luxe.
Thank you to Marino Brilli for sharing the link to the eMarketer article
