Luxury brands are becoming more and more immersed in the world of technology; it is becoming increasingly common for fashion, car and even jewellery houses to include digital experiences where the interaction between their customers and technology forges new relationships of loyalty and brand loyalty. In this blog, we want to tell you why and why they are doing it and also what they are gaining from it.
What is a luxury brand?
Let’s first define a little bit what a luxury brand is. These brands seek to project two main values, the first is exclusivity and the second is identity:
The exclusivity is created to give “status” to the brand, it is sought that not just anyone can acquire their items, so the prices are high compared to supplementary products on the market. In this way, the customer who obtains a luxury item feels in one way or another that he has a higher social status than someone who cannot acquire these goods, in other words, he feels that the brand “gives him value”.
Exclusivity is also reflected in the low production of the same product, generally, luxury brands do not mass produce but create strategies where they launch few copies to the market, creating the feeling of high demand and low supply, which makes the consumer feel that he/she can buy unique items.
Luxury brands generally do not try to compete against similar brands that are on the market, on the contrary, they have a constantly introspective work where they focus on improving themselves, being recognised and maintaining their luxury status. The identity of these brands is usually so well known that with just a small logo, for example, they give value to their products and for this logo alone consumers pay up to 100 times more for the same item.
Luxury brands and technology
Day by day with the constant interaction that we humans have with technology, new advances have emerged and with them also new ways of selling and promoting brands; from catalogues, we have migrated to e-commerce and from these to shopping on social networks.
This is why the most prestigious brands are adapting to these new dynamics and to the new and future generations of consumers, who live very differently than their grandparents did. Here are some of the main reasons why brands are using technology more and more:
Connecting with a new audience
One of the main reasons is to connect with a new audience, luxury brands have started to launch strategies to captivate not only Millennials who have quickly adapted to connectivity and on-demand entertainment but also the next generation called Generation Z (under 25) who take technology for granted since they were born. In the end, it is clear to them that even if they are not currently the generations with the greatest purchasing power, they are the ones who have the most influence in the digital market.
A good example is LOUIS VUITTON, the brand has started a collaboration with BTS, one of the biggest boy bands of the moment, precisely to reach the young fans of the band, and launched a new collection through a futuristic video on Youtube, one of the most visited platforms, with the members of the musical group modelling. The video reached two million views in just a few hours, a figure that would not have been achieved in hours with catalogues or photographs on social networks.
Enhancing the consumer experience
Another reason luxury brands are considering implementing technology is the consumer experience, which with the help of apps and QR code scanning allows visitors to their shops to have the best possible experience by blending reality with digital.
BURBERRY, for example, has been a pioneer in the implementation of technology. Altagamma and the National Chamber of Italian Fashion recognised the British brand for its Exceptional Digital Offerings throughout 2020. The brand has been recognised for its expansion into digital shops and social media (they were one of the first Instagram partners to test the shopping functionality), as well as its immersion in video games and shopping tools which ultimately enhances and facilitates the customer experience.
In terms of customer experience, BURBERRY has successfully implemented augmented reality in its app, allowing customers to see how the clothes they sell would look, worn by a person in their everyday environment, and also allows them to pay for them immediately through the app without queues or delays.
Augmented reality experience with clothing branding
Additionally, at the launch of its Olympia handbag the brand decided to bring to life the Greek goddess that gives its name to the piece; by scanning a QR consumers could observe the statue in 3D and capture images of it creating a luxury experience that is not common, at least at the moment, in other shops.
Burberry invites customers into the world of Olympia for an AR experience
AR Olympia experience for www.burberryplc.com
Becoming more sustainable and green
Responding to one of today’s issues, luxury brands are renewing themselves to provide solutions that align with the ideals of the new generations, to continue to build consumer loyalty and to have a clear and strong voice in the market. This is why, with the help of technology, they are improving processes and materials.
An example of green renovation is CHANEL, as it invested in a green chemistry startup that is experimenting with liquid silk to produce high-quality textiles avoiding the use of toxic and harmful products for the environment, as well as the use of animal skins. Thus CHANEL is exploring innovative materials, and mechanical and optical improvements in different fabrics of unique quality.
Another example is Stella McCartney who with other designers is working hand in hand with Google to use data analytics and machine learning on Google Cloud to give other brands a greater understanding of the supply chain they use to measure their environmental impact and reduce it.
What are they gaining?
According to a Forbes study Generation Z in 2018 was only responsible for 4% of luxury sales globally, however, by 2020, luxury sales in this niche market increased to 10% and in regions such as China increased to 15%, apparently due to the adoption of emerging technologies, digital marketing tools to create content (such as augmented reality, virtual reality and AI chatbots) and the adoption of collaborations to create digital versions of their products or collections (see Gucci’s virtual trainers that cost $12).
In summary, luxury brands are increasingly expanding to gain new loyal consumers, are improving the shopping experience whether online or in-person with the help of technology and are becoming greener and more sustainable which has led them to increase sales in the new generations and has led them to implement new, stronger and more updated strategies that target the digital and collaborative market.
