Many British luxury brands are struggling to adapt to a changing global climate while protecting their brand identity. But there’s hope. Here’s what you need to know about keeping up with the times, preserving your brand heritage and how to market a luxury brand overseas.
The global market for luxury brands is huge – and with predicted sales of €290 billion by 2020, it’s only going to get bigger. The future is particularly bright for European luxury, with forecasters predicting that sales will grow between 7 and 9 %.
This is good news for British luxury brands, who already make up 8% of total UK exports and have been growing by 10% year-on-year.
But where there is opportunity, there is inevitably challenge. Customer appetites change constantly and new digital channels come and go. In such a turbulent market, what can British companies do to keep up with the times and market their luxury brand successfully?
HERITAGE OR HAS BEEN?
Britain’s relationship with luxury is long and illustrious. Several of its oldest brands have existed for centuries – not least Burberry, which was founded in 1856.
But that doesn’t mean it’s stuck in the past. Some of the most innovative and creative brands of recent years have been British. Just look at the “hooligan of fashion”, Alexander McQueen.
Thanks to this heritage, British luxury is strongly associated with style, elegance, innovation and creativity. So it’s no surprise that many brands turn their “Made in Britain” creds into a core part of their identity. Or why three quarters of those questioned in a recent study said the label made them more likely to buy something.
But you shouldn’t apply it blindly to your brand’s marketing strategy. In the same survey, almost half of the respondents felt that British products were expensive. And one fifth saw “Made in Britain” as old-fashioned. Meanwhile, Americans are twice as likely to associate Britishness with stylishness than people in the UK.
So if your brand is all about style and you’re in a low-cost British market, you’ll need to think about the best way of positioning yourself.
According to the Kadence Luxury Index 2018, quality is the number one driver of luxury worldwide. History, distinctiveness, timelessness and the experiential nature of the brand are all secondary.
This is good news for Britishness. It’s closely associated with quality, which is why it does so well abroad. In fact, a report by Barclays found that 64% of shoppers in emerging markets are more inclined to buy British brands. They’re also willing to spend 7% more for these products. But it would be wrong to assume that there’s one global perception of Britishness.
In general, emerging markets like South Korea and Poland value the “Made in Britain” label because of its quality and prestige. However, in Russia, customers are more interested in the product itself than where it comes from. So wherever you are in the world, be prepared to dial your Britishness up or down as needed.
NEW MARKET FACES
Traditionally the West has dominated the luxury landscape, but this is changing.
Chinese consumers are big luxury spenders and currently represent around a third of the market. But they’re also starting to take pride in buying from new Asian fashion brands based in China, South Korea and Japan. These brands can manufacture locally, which means they can experiment with new styles and materials. As a result, they’re beginning to pose a threat to their more established Western peers – and not just in Asia. House of Fraser owner Sanpower recently announced they would begin pushing luxury Chinese products in their stores. Their example blazes a trail that other brands will surely follow.
Getting the attention of Asian shoppers will be key for any luxury brand’s long-term strategy. And collaborating with Chinese brands is a good way of doing this. Chopard, for example, created a Silk Road Collection together with Chinese couturier Guo Pei. The brand even launched on Chinese retailer JD.com to bring Chopard closer to its customers.
Chopard is not alone in going online. In fact, the rising influence of digital is perhaps the biggest wave of change to ever hit the luxury market. According to the Boston Consulting Group, digital channels influence 6 out of 10 luxury sales. And by 2020, e-commerce could make up 12% of the market.
Luckily, the UK has the highest penetration of online luxury sales in the world (11%). British brands are therefore well placed to be able to find out how to market a luxury brand in this new era.
However, digital presents challenges for luxury brands, not least when it comes to their identity. Whereas luxury prizes exclusivity and scarcity, the internet is the great equalizer. You’ll need to carefully balance your brand’s exclusivity while sharing enough information to appeal to an online crowd.
Brands also need to consider the best way of promoting themselves online. When it comes to e-commerce, marketplaces like JD.com and Amazon are becoming increasingly unavoidable. By 2021, McKinsey predicts Amazon will have 20% of the online apparel market. Facilitation sites like Net-a-Porter are another option for luxury retailers. They also have the advantage of providing useful digital insights into customers.
But using these sites risks losing control of your brand image to third-party sellers. To avoid this, an airtight marketplace strategy is crucial. Brands can already open their own stores on Amazon and other marketplaces, which you can customize to reflect your brand identity. Shaping your presence on these sites lin this way is a great way of taking control of your own destiny.
Of course, the best place to tell your story is on your website. And it is possible to link luxury, digital and Britishness with your brand – just look at Burberry. Their Trench Coat page celebrates British heritage (the coats are called The Chelsea, The Kensington and The Westminster) while reinventing it for a new age. The brand has remained open to varied perspectives on Britishness without diluting its own brand image.
IT’S ALL IN THE EXPERIENCE
Social media has shifted the way people think about shopping. 78% of millennials would now rather spend money on an experience than on a desirable product. The jury’s out on why this is. Is it to share experiences with others on social media, or simply be recognized and make others jealous? Is it to avoid suffering like millennials’ parents did during the 2008 crash, where they lost their material possessions? Or is it just that experiences make you happier than things?
Whatever the reason, it has an effect on social media engagement. For example, Game of Thrones star Maisie Williams received over 600,000 likes on Instagram for a picture of her meeting refugees in June 2018. But in April 2018, she only received 400,000 likes for a picture of her buying Cords. Similarly, influencer Estee LaLonde received 5,000 likes for a picture of perfume versus 20,000 likes for a picture of her out and about in London.
This trend is something that should actively inform the marketing strategy of any British luxury brand. You’re no longer just selling products – you’re selling your brand story, complete with the experiences and emotions that go along with it. Your social media accounts, website and marketplace stores should all reflect this.
So, what’s the secret to marketing a luxury brand with a British identity? Create a compelling brand story that customers can buy into. That way, you’ll create fans who will not only buy from you repeatedly, but who will champion your cause to their friends and social media circle. We explore how to do that in our next blog.