Marketing globally today means navigating an ever-changing landscape. Knowing your audience is crucial to a successful strategy. For luxury brands, this means discovering your target customers, the platforms they’re on – and how to reach them on social.
When you think of luxury, you most likely picture something defined by its exclusivity. Something that will enhance your status. Something you only possess thanks to your wealth.
Luxury brands have leveraged this idea to market their products and services. But how can marketing an exclusive luxury lifestyle square with the need for all brands to be accessible and visible online and on social media in the digital age?
In 2023, exclusivity is meeting inclusivity. And luxury brands need to keep up. Market research is a key component to ensure you’re meeting your customers where they are – and delivering what they expect.
During the Covid pandemic and the following global economic downturn, the luxury goods market took a hit. Without the in-store experience, luxury brands suffered financially; global sales were an estimated 70% lower in 2020 than they were in 2019.
Despite this, the luxury market is expected to grow globally by over 3% year-on-year from 2023 to 2028. Global luxury brands should see market research as a key tool before making an investment in expansion into new markets.
For example, spending in the Chinese and American markets has risen rapidly and millennials and Gen Z are the dominant age groups in terms of spending power. Knowing your audiences will mean your expansion and marketing strategies are sound – and that you’re staying relevant in an ever-shifting landscape.
Here’s how to make it work:
Younger demographics have started to dominate the luxury marketplace. According to research by Bain & Company, Millennials and Gen Z were the main driver of the luxury goods market growth in 2022 and are expected to represent 70% of the global luxury market by 2025.
Brands like Nike are deliberately targeting younger consumers whose spending habits seem to defy the economic landscape (thanks to more young people living with their parents for longer). And according to Piper Sandler research, brands such as lululemon, Nike, adidas and Converse are the top brands among teenagers.
When expanding into new markets, luxury brands should look at the perception of luxury among their target demographics. For example, in the UAE, while consumers embrace new trends and social commerce, traditions and cultural values still have an impact on buying decisions. Tapping into the cultural calendar and lifestyle is still important for luxury brands expanding globally.
Plus, recognizing what’s defined as ‘luxury’ across cultures is essential. In China, traditionally luxury brands like Dior, Chanel and Louis Vuitton are coveted, but in the USA a casual athleisure look is seen as just as luxurious if it’s from a quality, prestigious brand.
Brands should also look forward to the next generation of consumers. Gen Zers are no longer the new kids on the block. Generation Alpha (under 13s) are contributing to the growth of the luxury goods market too. They’re digitally empowered, growing up in a world where screens, video content and commerce are all available on demand.
What does this mean for global luxury brands? Depending on your international markets, your target audiences could be skewing younger. These generations want exclusive products, but value inclusivity too.
Understanding your target audiences will help determine who’s buying your product and how to reflect their values in your content.
The rise of social media and social commerce has created the need for a different approach to luxury marketing. Instagram and Pinterest were the perfect windows into the aspirational lifestyle. Luxury products and curated aesthetics are just a swipe and a tap away.
TikTok and Instagram are great platforms to reach Gen Z. For luxury brands, influencer partnerships help brands create relatable content that performs on these platforms while retaining a strong brand identity.
Knowing which platforms your audiences are using in your target markets is a good way to meet consumers where they are. And it’s not just about Instagram. Consider the local platforms that are popular in the different target markets.
L’Occitane grew their presence in South Korea through successful campaigns on KakaoTalk by utilising its KakaoTalk Gift function, allowing users to buy products for their friends. The brand reached the top of the beauty category on the gifting platform and increased their sales in South Korea.
Taking a trend-led approach to digital can also work in your favour. Bridging the gap between exclusive luxury and the trends everyone’s talking about is a great way to reach your target market.
Prada did this effectively with their 2021 ‘Feels Like Prada’ campaign. It played on the idea of physical touch, a clever move in the aftermath of the pandemic, as well as tapping into the viral ASMR trend at the time.
The campaign video focused on the feeling and sounds of the clothes and their OOH experiential campaigns included turning their SoHo flagship store into a beach, complete with sand dunes, rocks and sun umbrellas.
Knowing your audience will help determine the approach you need for success in international markets. This principle applies to your holistic marketing strategy, or more targeted campaigns on social media.
Digitally savvy Gen Zers expect a lot from their favourite brands. Personalization, authenticity and shared values are important to increase customer loyalty. 73% of global consumers are more loyal to brands they believe are authentic.
The global influencer market value has doubled from 2019 to 2023 and is now worth $21.1 billion. Influencer marketing is a popular tactic to engage a younger audience, but for luxury brands, finding the right influencer is crucial. According to eConsultancy research, 40% of luxury brands see mid-tier influencers (those with 40,000 to 100,000 followers) as the most effective for their campaigns.
So follower count doesn’t necessarily equal increased engagement. Instead, finding aligned, local influencers in the relevant markets to tap into their engaged following could drive sales as part of your overall international marketing strategy.
For example, Louise Follain (277k followers on Instagram), ambassador of the effortless French-girl style, partnered with luxury jewellery brand David Yurman.
And Gen Z poster girl Mia Regan (601k followers on Instagram) combines her creative collage edits with luxury fashion to promote brands like Coach and Victoria Beckham.
Photos from @louisefollain and @mimimoocher Instagram pages.
Knowing your international audiences – and who they follow on social media – will help you find and partner with the right influencers to promote your brand as part of a wider international marketing strategy.
Marketing luxury products may require different tactics from those for non-luxury goods, especially internationally. Knowing your audience before launching in a new market, or growing in an existing one, is essential.
When it comes to knowing your global audiences, finding their preferred platforms and forming a holistic strategy, a deep dive into local trends, competitors and the industry landscape is key. Once you’ve found your target demographics in each market, partnering with the right influencers will help engage customers with your luxury brand.