Luxury retailers risk missing out on a large slice of their potential customer potential through failing to properly understand the digital behaviour and cues of their consumer base. Blunt segmentation of affluent and high net worth audiences based on wealth or location has never been good enough and yet it still pervades the majority of digital targeting.
Examining our own data, we know that mindset and values can be a much more interesting focus for niche audience understanding. This is what makes LCP Consulting’s research all the more intriguing - why aren’t retailers using the tools available to get to know their consumers more?
Failing to move with the times
Our experience with luxury brands is that they have been resistant to embracing the power of their own data due to a mistrust of the efficacy of digital advertising or poor understanding of how to effectively extract value from it.
But as media and marketing continue to evolve around digital technologies and as their target audiences spend more and more time in the digital world, luxury brands cannot keep missing out on the data-driven insights that can ultimately inspire action amongst increasingly complex consumer-bases.
Luxury digital audiences must not be forgotten
Data capture and analysis of purchase behaviour, shopping habits, and psychographics have a vital role in uncovering essential insights that will inform not only marketing strategies but important business decisions.
Take Kiki McDonough, a Sloane Square Jeweller. They were able to identify a high-value new target audience based on in-depth on-site data analysis: women more affluent and younger than their in-store counterparts, academically and professionally high-achieving, more culturally-engaged (e.g., art, fashion, drama), and purchasing via tablets.
One of the most salient insights across luxury brands is that luxury audiences are becoming happier and happier to make the final purchase through digital channels. Despite worries that high net worth individuals are harder to target online, and the continued importance of the in-store experience, we are increasingly seeing tangible results from highly targeted digital advertising campaigns.
Luxury audiences going mobile
According to statista UK smartphone penetration rate now stands at 81% for those up to 64 years of age.
It would, therefore, be ill-advised to assume affluent and high net worth consumers are not interacting, being inspired, researching, and purchasing outside the desktop or laptop environments.
This is still an untapped opportunity for luxury brands to connect with their audiences and any first-party data analysis must take this into account – mobile behaviour remains distinct from other digital interactions with advertising and brand websites and understanding where it fits into the purchase journey has to be carefully considered.
Making the most of your data
PwC’s Total Retail consumer survey tellingly recorded 59% of consumers wanting real-time personal offers or services designed especially for them. Tailor made experiences or opportunities have long been fundamental to consumers love of luxury brands – and long will it continue.
Without meeting a client or customer face to face, how do brands maintain this level of relevance and personalisation? The reality is that only through a broad range of tools, platforms and bespoke research can brands get closer to the conversations, needs and behaviours of customers and prospects that allow them to get anywhere close to the in-store experience.
To get it right and make the most of the data they have access to, brands need to ensure they’re looking at it in context alongside broader market insight, media consumption and trend analysis, as well as (ideally!) real conversations with real customers. This more holistic view can be fed into product evolution, creative development, and of course smarter, more effective marketing.