British luxury brands are struggling to adapt to changing global trends while also protecting brand identity. Here’s what British brands need to know about maximizing on the global opportunity while preserving brand heritage.
The global luxury market is huge. And with predicted sales nearing $400 billion by 2020, it’s only going to get bigger. The future is particularly bright for European luxury, with sales predicted to grow between 7-9%. This is good news for British luxury brands, which already make up 8% of total UK exports and have been growing by 10% year-on-year.
But luxury consumer appetites change constantly, and digital platform trends are ever-changing. In such an evolving market, British luxury brands need to keep up with global online behavior and think strategically to successfully market internationally.
HERITAGE OR HAS-BEEN?
Thanks to its long heritage, British luxury is often associated with style, elegance, innovation, and creativity, with many British brands making “Made in Britain” a core part of their identity. A recent study of British brand perception among UK and US consumers indicated the “Made in Britain” label made them more likely to buy.
However, different audiences have different perceptions. For instance, a majority of British respondents see British products as expensive, while some view “Made in Britain” as old-fashioned. On the other hand, American consumers are more likely to associate Britishness with style than UK consumers.
Regardless of the target market, it’s crucial for brands to carefully consider their audience when presenting localized content and think about the best way to position themselves in each locale.
According to the Kadence Luxury Index 2018, quality is the number-one indication of luxury status worldwide. History, distinctiveness, timelessness, and the experiential nature of the brand are all secondary considerations.
Britishness is closely associated with quality, which is why it does so well internationally. 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.
In general, emerging markets like South Korea and Poland value the “Made in Britain” label because of its perceived quality and prestige. However, Russian consumers are more interested in the product itself, not where it comes from. So wherever British luxury brands are marketing in the world, they should be prepared to dial Britishness up or down as needed.
NEW MARKET FACES
Chinese consumers are big luxury spenders and currently represent around one-third of the market. But they’re beginning to take pride in buying from new Asian fashion brands based in China, South Korea, and Japan, which pose a threat to established Western peers.
When targeting Asian shoppers, consider partnering with Chinese brands as part of the long-term strategy. Chopard, for example, created a Silk Road Collection together with Chinese couturier Guo Pei. The brand even launched on Chinese retailer JD.com to engage more closely with customers.
The rising influence of digital is perhaps the biggest change that affects the global luxury market. According to the Boston Consulting Group, digital channels influence 6 out of 10 luxury sales. And by 2020, eCommerce could make up 12% of the market.
The UK has the highest penetration of online luxury sales in the world (11%). British brands are therefore in a good position to market a luxury brand in this new era.
However, digital growth presents challenges for luxury brand identity. While luxury prides itself on exclusivity and scarcity, the internet has an audience that values shared information, which can make exclusivity difficult to preserve.
Brands also need to consider the best way to promote themselves online. When it comes to eCommerce, marketplaces like JD.com and Amazon allow sellers to open stores customized to their brands. This helps preserve brand identity, while also building a presence on widely accessed eCommerce platforms.
British brands can also tell their stories on their own websites, tying in luxury, digital, and British elements. For example, Burberry’s Trench Coat page celebrates British heritage (the coats are called the Chelsea, the Kensington, and the Westminster) while reinventing the range for a new age. The brand has leveraged its site as an invitation to participate in British style. But it’s also open to varied perspectives on Britishness, such as being expensive, high quality, and stylish, without diluting its luxury brand voice and image.
HOW TO MARKET A LUXURY BRAND 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. This certainly impacts 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 received only 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 in user preference for specific types of content should actively inform strategy on how to market a luxury brand. It’s not just about selling products – it’s about selling the brand story, complete with the experiences and emotions. Social media channels, websites, and stores should all reflect this.
So, what’s the secret to success for British brands in a changing luxury landscape? They need to create a compelling brand story that customers can relate to. They should also consider the experience consumers expect from the their brand in each locale. That way, British luxury can influence brand perception and create fans who will not only repeat purchase, but will champion brand positioning among friends and social media communities.