Luxury brands are living fantastic times because brands have had a limited amount of marketing channels before the rise of the Internet. Luxury brands pick their marketing channels and vehicles carefully, and this has limited marketing actions. The Internet has made it possible to create exciting websites, which makes it possible to represent your brand in a divine way. Nowadays it is almost possible to provide the same experience online, as in shops. Many luxury experts say that it is almost impossible to provide same experiences online because the real world has so many great elements. However, websites can be virtually very entertaining and stylish. Still, websites are not enough, and it is vital to be active on social media channels.
The world of the Internet is limited because the world has 7.1 billion citizens. When there are active online users about 3.4 billion. Under half of the world population is not present online. But the world is connecting all of the time, and global middle class is getting larger and larger year by year. A very good situation for the luxury industry because it is mainly driven by middle-class buyers. Even Russia's luxury market generated growth by five percent, even though its economy is in a very challenging situation. Russia's share of the whole global market is 1.4 percent (3,5 billion euros). The global market size for personal luxury goods is 249 billion euros when global online sales are 19 billion euros, hence, under 10 percent of the whole pie. This means that over 90 percent of luxury shopping happens in shops, department stores, and other places. As I mentioned in my previous blog post. That it is possible to sell very expensive items online but luxury shoppers tend to prefer brick-and-mortar-shopping. However, luxury brands have to provide both sales channels.
At the same time, we must remember that luxury shops are mainly located in capitals, other major cities and in large airports. There is room for growth by enhancing global online sales, and by opening new shops in growing cities, and in new markets. Therefore, the appetite of luxury brands is growing and everyone wants to reach to consumers (online). But how can they do that?
Number Of Internet Users Worldwide 2005-2016
The easiest way to reach for consumers globally is to be present on social media channels. Facebook has almost two billion active users, and it is the overwhelming market leader when we are eyeing the number of active users. WhatsApp and Facebook Messenger have one billion users. Instagram 600 million, Tumblr 550 million, Twitter 317 million, Skype 300 million, Viber 249 million, Pinterest 150 million and LinkedIn 106 million active online users. These are the social media channels, which we use mainly in the West, and also other parts of the world. However, the chart below has other social media channels, which I did not mention previously. These other social media services are mainly from Asia, especially from China.
Active Social Media Users In January 2017
Social media channels are excellent when brands want to reach for consumers. Channels are easy to use, and they support high-quality photographs and videos, hence, marketing content. Exciting brands can easily gain a vast number of followers in a short period of time. This means that brands can reach to fans effortlessly by being modern time tribe leaders.
This is the reason why luxury brands are increasing interest of the digital world. They can create their own channels, and they have full control over them. However, this does not mean that luxury brands are going reduce the number of marketing channels and vehicles. Digital channels have actually increased the number of channels and vehicles. Luxury brands will advertise in paper magazines, such as Vogue and GQ, also in the future. However, all major actors already online, and therefore, there are no excuses to be an outsider.
Published in Luxury Sales Academy.