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Luxury Daily CLASSIC GUIDE TO LUXURY MARKETING

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CONTENTS

EDITOR’S NOTE: Luxury marketing evolves to two-way communication By Mickey Alam Khan

Quick, functional experience integral for luxury ecommerceBy Rachel Lamb

Customization is key to in-store marketingBy Rachel Lamb

Mobile commerce platforms no longer optional for luxury brands By Kayla Hutzler

Personalization, channel integration key for digital marketingBy Rachel Lamb

Rich media not always better for mobile campaigns By Kayla Hutzler

Q&A: Digital will continue to lead the way for luxury marketing By Morpheus Media’s Shenan Reed

Luxury branded search presence keeps top-positioning controlBy Rachel Lamb

Email, mobile should drive multichannel marketing campaignsBy Kayla Hutzler

Q&A: Multichannel is no longer an option for luxury brandsBy Affluent Insights’ Chris Ramey

Mobile marketing engages consumers during pur-chasing processBy Kayla Hutzler

Content is key for mobile appsBy Kayla Hutzler

Television advertising still holds appeal for luxury brands By Kayla Hutzler

Radio is a mass-reach platform that can be highly targetedBy Kayla Hutzler

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Q&A: Agencies need to understand the nuances of the luxury customerBy iProspect’s Andrea Wilson

Cause, event marketing allows innovative, personal experiencesBy Rachel Lamb

Internet is the biggest legal challenge for luxury brandsBy Rachel Lamb

Trademark, legal back-up key to protecting luxury brand privacy By Rachel Lamb

Holistic multichannel approach is vital for driv-ing in-store salesBy Kayla Hutzler

Q&A: Communicate an over-simplified message to luxury consumersBy Ries & Ries’ Al Ries

Social media adds personal experience to aspi-rational consumersBy Rachel Lamb

Direct mail is more relevant now than in past decadesBy Kayla Hutzler

Mail catalogs effective when part of a multichannel approachBy Kayla Hutzler

Q&A: CRM is critical for affluent customer retentionBy Luxury Institute’s Milton Pedraza

Out-of-home ads enhanced, not depleted, by digital advancesBy Kayla Hutzler

Print allows the ability to control brand imageBy Rachel Lamb

Luxury brands need to be wary of ambigous research trendsBy Rachel Lamb

Q&A: Is the luxury shopper demographic shrinking? By Unity Marketing’s Pam Danziger

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elcome to Luxury Daily’s inaugural Classic Guide to Luxury Marketing, designed to be an indispensable re-source to marketers and brands interested in the ins

and outs of luxury marketing.

This edition is chock full of ideas on how luxury brands can execute campaigns across all mediums, including the Internet, mobile, print, television, outdoor, direct mail, in-store and radio.

The Classic Guide is meant to help luxury marketers understand how to navigate 21st-century marketing, with all its complexi-ties and privacy issues as well as database-building and brand-ing opportunities.

Print has long been the mainstay of luxury marketing, depend-able for its association with pertinent content and the gloss factor that showcases luxury brands to their best advantage.

But there is a perceptible shift in luxury marketing.

Newer tools in marketing such as social media and mobile mar-keting are giving luxury brands the option to not only talk to their audience but also hear back from them in real-time.

Indeed, social media is single-handedly changing the face of luxury marketing. So is the rapid adoption of ecommerce and mobile commerce, requiring marketers to have a 360-degree strategy for marketing to discerning consumers.

That said, nothing beats the in-store experience to appreciate the real value of luxury products and services. Indeed, smart marketing is the best traffic driver.

Expert insightPlease feel free to read every page of Luxury Daily’s Classic Guide to Luxury Marketing and to subscribe to the publication at http://www.luxurydaily.com/newsletter. Do send the guide’s link to colleagues, peers and clients.

Luxury Daily reporters Rachel Lamb and Kayla Hutzler worked hard on this edition, so thank you to them for the content. Also, thanks are due to Kayla for the art direction on the guide.

For their insights, many thanks to Morpheus Media’s Shenan Reed, Affluent Insights’ Chris Ramey, iProspect’s Andrea Wilson, Ries & Ries’ Al Ries, Luxury Institute’s Milton Pedraza and Unity Marketing’s Pam Danziger. Their support has been invaluable in making Luxury Daily the indispensable read on smart luxury marketing and retail as the world moves from yell-and-sell to tell-and-sell.

Mickey Alam Khan

401 Broadway, Suite 1408New York, NY 10013

Tel: 212-334-0128Fax: 212-334-6339

Email: [email protected] site: www.LuxuryDaily.com

For newsletter subscriptions:http://www.luxurydaily.com/

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Luxury Daily is the leading trade publication focusing on how luxury brands are conducting their marketing and commerce efforts across all media channels. The Napean-owned franchise comprises Luxury Daily, LuxuryDaily.com, the Luxury Daily newsletter, Luxury Daily Summit, Luxury Marketer of the Year, Luxury Retailer of the Year and the Luxury Daily Awards.

©2012 Napean LLC. All rights reserved. No part of this publication may be reproduced without permission.

Luxury Daily CLASSIC GUIDE TO LUXURY MARKETINGPAGE 3

Mickey Alam KhanEditor in [email protected]

Rachel LambAssociate [email protected]

Kayla HutzlerEditorial [email protected]

EDITOR’S NOTE

Jodie SolomonDirector, Ad [email protected]

Luxury marketing evolves to two-way communication

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Quick, functional experience integral for luxury ecommerce

uxury ecommerce sites must be easy-to-navigate and functional for the ready-minded consumer to avoid turning them off from the brand or causing them to

move to a competitor site.

Upscale brands are still using site-slowing features such as Flash and rich media that disrupt the flow of the shop-ping process. If a commerce-enabled site does not allow consumers to get in and out quickly, customers could dis-credit the brand.

“Customers shop a variety of ways,” said Tania Doub, retail strategy lead at Optaros, Boston.

“Although some prefer the in-store, high-touch expe-rience, others know exactly what they want and like to browse and shop online,” she said. “Customer experience and ease of checkout online is important to users.”

Internet clicksLuxury brands often use Flash and rich images to make their sites aesthetically pleasing and emphasize the luxury aspect.

Unfortunately, this usually means forfeiting functionality for beauty.

Luxury brands can and should have both. For luxury retail-ers that enable consumers to shop online, functionality is much more important.

Since it is important to both luxury consumers and brands that ecommerce sites show high-resolution images and possibly video, brands can incorporate this when showing products instead of using Flash on the homepage, which takes longer for the site to load.

To do this, brands can include zooming capability and mul-tiple image views when consumers bring up an individual product page.

“Luxury brands need to maintain their brand identity andimage, but they also need to make their sites shopable,” Ms. Doub said.

Additionally, many brands including retailers, jewelers and automakers are incorporating augmented reality into their

By Rachel Lamb

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Web sites, enabling consumers to try on expensive jewelry or garments and possibly buy them.

Party onAlthough having a branded ecommerce site is definitely an advantage, there are other opportunities for luxury brands looking to drive transactions online.

For instance, third-party retailers such as Amazon.com, Net-A-Porter, Gilt Groupe and many others are accredited for selling luxury goods online.

In addition, luxury department stores such as Barneys New York, Bloomingdale’s, and Neiman Marcus all have easy-to-navigate ecommerce sites that sell luxury items.

Just because a brand is using ecommerce does not mean that it has to be on its own branded site.

Luxury brands just need to ensure that the third-party re-tailer has the same values that the brand does to avoid confusing the consumer.

Additionally, it should make sure that the retailer’s ecom-merce site is fast, easy and still nice to look at.

“Luxury retailers can use the channel to really create a central community where they can showcase the real brand essence and leverage community and content to drive commerce,” Ms. Doub said.

Best-practice tips

• Global integration. Ensure a unified experience across the globe. Many luxury brands have differ-ent sites for each country and there is no central place for inventory management or to get a single customer view

• Content management. Being able to leverage content assets multichannel and globally is a big challenge for many luxury brands

• Be relevant. For example, many luxury brands do

not have their pricing currency set to U.S. dol-lars on their U.S. ecommerce site which makes the U.S. customer feel irrelevant


Customization is key to in-store marketing

n-store marketing remains the No. 1 marketing tech-nique that luxury brands use when drawing and keeping customers and customization is how brands can give

affluent consumers a special experience.

Elegant and beautiful product displays and helpful and courteous salespeople are the cornerstone of the luxury industry, where customer experience and service are the main ways to present luxury branded products. Many lux-ury products are bought in-store rather than online, so it is necessary for luxury marketers to have innovative and interesting in-store strategies.

“People do love to shop, and luxury brands should be set-ting the standard for the ultimate in-store shopping expe-rience,” said Paula Rosenblum, partner at Retail Systems Research, Miami. “I think what I call the ‘Walmart effect’ has extended all the way up the retail food chain – fewer employees, more self-service.

“That must end, it’s not fun,” she said. “The Web site or mobile site should not be the flagship for the brand – it still has to be the store.”

Interior designWhat sets apart luxury stores from their mid-level coun-terparts is the feeling that customers have when they walk in the door.

Impeccable customer service is a key behavior that afflu-ent consumers expect from a luxury retailer.

Since consumers are paying premium prices for luxury goods, they expect to receive special treatment and to be helped in the most swift and efficient possible way.

In addition, brands should take note of the latest technol-ogy that can enhance the in-store experience.

For instance, department store chain Nordstrom now uses iPod touches to checkout consumers and find inventory.

Furthermore, other brands are dabbling in dressing rooms that have virtual and augmented reality so that customers can see what garments look like before trying them on.

Affluent consumers are often the forerunners in new tech-


IBy Rachel Lamb

nology and want the latest gadgets and inventory.

This is doubly effective because it not only adds an in-teresting element to an ordinary in-store experience, but mixes an old-world in-store marketing strategy with a modern flair.

Party timeOne of the best ways to display a fascinating in-store strategy is for brands to hold special events for their most valuable customers.

This adds a personalized experience for an individual, which is extremely important to the luxury customer.

“It’s up to luxury brands to bring that kind of show to the people,” Ms. Rosenblum said. “Having private events in the store remains a strong strategy.”

Luxury brands can even make events personalized with handwritten invitations, customized gift bags and person-al shoppers or event planners.

In-store events are especially effective because getting bodies in retail locations increases the chance that cus-tomers will actually buy products, whether or not that is the purpose of the event.

“From now on, everything has to be personal,” Ms. Rosen-blum said. “Anyone a customer interacts with has to know whatever the customer chooses to let you know about them, and they should be able to bring to bear merchan-dise from many different designers for your review, based on your preferences.”

Best-practice tips

• New technology to draw consumers in-store

• Cross-channel integration of customer, inventory and purchase information

• Doing all of this efficiently


Mobile commerce platforms no longer optional for luxury brandsBy Kayla Hutzler


forms, as well as make purchases as effortless as possible.

“Simply put, think about how the brand image translates through a mobile experience,” said Steve Timpson, presi-dent of SiteMinis, Atlanta.

“Make sure that you understand that different form fac-tors may have different user behavior,” he said.

“Look at your demographic shopper and use that information to lay out how you, as a brand, want to implement mobile.”

Eye for detailWhen designing a mobile-commerce platform, luxury brands should include a few basic neces-sities such as a store locator, click-to-call, map-it functionality and easy-to-navigate interfaces.

In addition, a brand needs to be aware and fa-miliarize itself with all of the hardware and soft-ware in the mobile space such as Apple, Android, BlackBerry and Microsoft platforms.

“Even though some platforms appear to be more important than others, in reality, the whole eco-system is important,” Mr. Timpson said.

Also, a brand’s mobile site is an important part of the mobile commerce discussion.

The optimized site should be simple, but still maintain the brand’s quality and reputation.

A brand should not ignore its history or color scheme in the simplification, but factors such as buttons versus drop-down menus, less advertis-ing and specific targeting are important when creating a user-friendly mobile platform.

Most important for mobile commerce is making the check-out and purchasing process as easy and convenient as possible.

obile commerce will soon be an essential touch point for luxury brands since affluent consumers are beginning to expect a brand to be easily acces-

sible regardless of the shopper’s location.

Luxury brands need to ensure that their mobile sites are commerce-enabled for immediate gratification for the current on-the-go affluent consumer. To increase ROI on mobile efforts, a brand needs to be available on all plat-

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Luxury brands should aim to provide one-click payment and store credit information based on user-registration. “Mobile commerce allows a customer to buy immedi-ately, possibly in front of a competitor’s product,” Mr. Timpson said.

“Mobile is a great way to drive sales at the point of sale, although a car purchaser is less likely to buy from a phone,” he said.

Multi-marketingA mobile platform can drive sales in two ways: by sending consumers in-store and allowing them to purchase right from their mobile devices.

Therefore, it is important that a mobile effort be incorpo-rated into all marketing efforts.

Brands need to use mobile along with sig-nage, digital, in-store, SMS, social media and email channels.

Equally important is the ability to get con-sumers to opt-in and possibly register for a brand’s mobile efforts.

This can allow a brand to refine user informa-tion and develop better product-targeting SMS and email messaging.

In terms of social media, a mobile-commerce site should have sharing options so that users can easily post branded material to their Facebook or Twitter accounts, per SiteMi-nis’ Mr. Timpson.

Allowing the shopper to ask friends for advice or share their latest purchases with social networks expands the brand’s reach and further advertises the brand’s mobile commerce platform.

“Brands that adopt aggressive mobile strategies cre-ate multiple opportunities to bond with consum-ers in a more personal way than traditional marketing

affords,” Mr. Timpson said.

“Also, mobile creates a more immediate interaction with the brand,” he said.

“[When brands] couple that with the ability to add multi-media interactivity and social media, [it] gives brands a low-cost method to get eyes on the brand and products.”

Best-practice tips

• Making sure that there is a store locator

• Let consumers determine if they want to link through to the PC site from mobile

• Create a simple and consistent navigation header or process

Digital will continue to lead the way for luxury marketersA Q&A with Morpheus Media’s Shenan Reed


lthough luxury brands were cautious to get on board with digital marketing, most companies are finding that ecommerce, mobile and even social

media are some of the main ways to engage with affluent consumers and prove impressive revenue drivers.

Often viewed as slow-to-the-game or too hesitant as com-pared to mainstream brands, luxury marketers are slowly but surely fighting their way into the digital medium. In fact, luxury brands are now finding new and unique tactics to share their own voices that connect to consumers in a manner that has not been done before.

“Obviously, it is not a wise decision for any luxury brand not to have a digital presence, especially since 92 per-cent of luxury consumers regularly shop online and spend four times as much on online purchases than non-luxury households,” said Shenan Reed, chief media officer of Mor-pheus Media, a Createthe Group company in New York.

“While digital may lack the tactile attributes of other me-diums, I believe that digital luxury experiences are getting better and better – more upscale, engaging and entertain-ing – especially in comparison to their traditional media counterparts,” she said.

In this Q&A, Ms. Reed discusses the future of Web and mobile commerce, various digital channels and why social media may not be a silver bullet for luxury brands.

Do luxury brands get digital marketing?Yes, they do and they are gravitating to digital marketing now that they see the results it generates. Five or six years ago, many luxury brands were reluctant to embrace digital marketing, and for good reason.

Luxury marketers are under constant pressure to maintain their brand’s image and, therefore, had understandable concerns about how their brands would be portrayed in new, evolving worlds such as digital, mobile and social.

Moreover, they were used to having greater control over their brands in traditional mediums such as print and tele-

vision. This mindset has shifted considerably.

Luxury brands now re-alize how digital can dramatically deepen engagement with afflu-ent consumers and keep them closer than ever with brand devotees.

Digital lacks the touch-and-feel tactile experience that adds premium to a luxury brand’s value, and yet an absence from digital could be foolhardy. What do you think?Obviously, it is not a wise decision for any luxury brand not to have a digital presence, especially since 92 per-cent of luxury consumers regularly shop online and spend four times as much on online purchases than non-lux-ury households, according to a recent study that we did with Condé Nast.

At the same time, it is critical for a luxury brand to have the right digital presence – one that is tailor-made for them, their consumers and how they like to shop and dis-cover their products.

While digital may lack the tactile attributes of other medi-ums, I believe that the luxury experiences are getting bet-ter – more upscale, engaging and entertaining – especially in comparison to their traditional media counterparts.

For example, the new sites for David Yurman, De Beers and Nars take consumers on a magnificent journey while mak-ing it easier than ever for them to shop.

Additionally, advances in video and augmented reality continue to take digital luxury experiences to new heights.

Which digital channels seem to be performing best for luxury marketing?I am not sure we can call out any one single channel be-cause I think that a variety of channels working together

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in concert can deliver the most impressive results.

We have seamlessly integrated many of our brands and their commerce initiatives across all digital channels in-cluding display media, search, affiliate marking, mobile, in-store and social media, which often results in incredibly high conversion rates.

As a baseline, I always advise brands to look first at how users are finding them. Search is the gateway to the Inter-net and how you are found – or, in some cases, if you are found – says so much about your brand.

With Google’s universal search results page, a smart digital marketer has the opportunity to own or influence a great deal of that page and, therefore, a customer’s first digital experience with their brand.

Will ecommerce and mobile commerce gain a larger share of luxury retail over the next three years?Yes, absolutely.

Many luxury brands want to expand globally, particu-larly in Asia, where luxury goods spending will likely dramatically increase.

Within the next five years, China will become the world’s largest market for luxury goods, spending $14.6 billion on luxury consumption.

Luxury brands want to deeply connect with affluent con-sumers all over the world and new advances in ecommerce will allow them to quickly and easily launch new sites and digital marketing initiatives in new regions while still maintaining their brand integrity.

We believe mobile commerce will further transform the digital luxury experience. But before luxury brands em-brace mobile, they need a branded engagement strategy that addresses what they really want to accomplish.

Do they want to engage, entertain or both? Or are they looking to make a lifestyle experience for the brand and consumers? Exclusivity is a key driver of the luxury mobile ex-perience. Offering something to affluent consum-ers that very few people have access to, such as a pri-vate trunk show or other invitation-only events, can be very powerful.

Luxury brands can leverage foursquare’s gaming capabili-ties to lead affluent consumers to a private event or lever-age the iPad to allow them to watch streaming video of a live runway show.

These are all ways that they can reward their most influ-ential consumers in a way that speaks to the exclusiveness of the experience.

I think that luxury brands are beginning to understand that the mobile Web is different than the stationary Web and, as such, provides a unique way to better engage af-fluent consumers in a more relevant, time-sensitive and personalized manner.

I am excited to help these brands better understand and execute the four core pillars of an optimum mobile strat-egy: location awareness, immediacy, personalization and


When you think about it that way – focusing on the great-er interactive potential of social media as opposed to just an individual platform or campaign – you realize the in-credible opportunity it presents.

It is about innovation and creating unique experiences, which ultimately have always been the key elements of

luxury positioning. Luxu-ry brands are still learning how to leverage social me-dia, but the ones that have it figured out are reaping enormous rewards.

Many of our clients are acti-vating social media strategies. In our work with Bergdorf Goodman, we have not only launched their blog, Facebook, Twitter, Tumblr, Polyvore, Ins-tagram and other social chan-nels, we have found ways to engage and reward consum-ers that are 100 percent rel-evant to the brand.

They’ve truly embraced social media as a constantly inno-vating channel, providing new ways to bridge the gap be-tween online and offline.

“Fendi Frenzy” and “Faces of 5F” are just two amazing ex-amples of how a brand can create something unique in the social space and still be very brand appropriate.

Similarly, in our work with DKNY to launch DKNY PR-Girl, we worked to be cer-tain that we knew what this voice was going to be in the space, making sure it was correct for DKNY and its audience.

social connectivity.

Is social media overrated?No – it is just misunderstood.

In today’s digital space, all media is social in one way or another.

Personalization, channel integration key for digital advertisingBy Rachel Lamb


n the cluttered environment of digital advertising, the most important aspects to keep in mind are personal-ization, channel integration and scale.

Luxury brands have been reluctant to latch on to digital marketing, but are now adapting at a steady speed. How-ever, luxury brands should be more willing to take some risks and stand out from the pack to differentiate them-selves from competitors.

“This one is a little bit fluffy, but is still only truly being focused on and executed by a few really big guys at the top,” said Vic Drabicky, a New York-based luxury digital marketing consultant.

“With the amount of data and type of targeting we have with digital media, there is a big push for advertising to be more personalized on a per-user-type basis,” he said.

Personalization is keySome luxury brands are reluctant to take chances, but get-ting into marketing just for the sake of doing so and copy-ing tactics because it seems to work for other brands is a great way to get lost in the crowd.

Therefore, personalization is important.

“Whenever consumers see a banner ad, it should have a personalized copy, look-and-feel with images based on your previous interactions with the brand or previous browsing behavior,” Mr. Drabicky said.

“This crosses online and offline, affecting everything from catalogs to display to email and just about everything in between,” he said.

Brands should also pay attention to channel integration.

Smart marketers work hard at making transitions between the channels seamless and effortless.

By eliminating the wall between direct response and branding or the wall between search and display, market-ers get a more holistic view of the effect of their efforts.

This leads to smarter, more integrated approaches to mar-keting, per Mr. Drabicky.

Finally, marketers need to pay attention to scale. The rate at which luxury companies are investing in digital is increasing.

This means that since a brand’s competitors are spending more on digital spending – arguably one of the most lu-crative channels – marketers need to kick it up a notch to keep up with the trends.

Potential pitfallsLuxury brands are spending more time than ever on digital advertising, which is encouraging.

However, there are certainly a few places where luxury

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brands can improve.

Many luxury brands still use Flash on their Web sites, which is widely known as one of the least-valuable assets to any kind of site.

Flash takes away from functionality

and efficiency, making the experience annoying and frus-trating to consumers.

If a branded site takes a while to load or is hard to navi-gate, then consumers may head to a competitor’s site.

However, any presence on digital is usually beneficial to a brand, but the most important aspect to remember is to employ tactics that work specifically for a company.

“Far too often, people lose track of the marketing idea they

are trying to execute and get caught up in the details of one channel versus another or evaluate all their channels differently to support pre-conceived ideas of how things should work,” Mr. Drabicky said.

“Instead, be open to digital as another channel worth ex-ploring and don’t be afraid to look externally for exper-tise,” he said.

“When it is done well, digital marketing can do all the same great things your traditional marketing channels can do, and it can move your brand and your business forward.”

Best-practice tips

• Data is an advantage, not a limit

• Do not chase the buzz

• Scale success

Rich media not always better for mobile campaigns


uxury brands often strive to have the most immer-sive and visually-stunning advertisements, yet when it comes to mobile campaigns it is better to maintain

a simple approach.

Often, luxury brands convolute their mobile ad campaigns with rich media that takes too long to load or not work on all devices. To help keep mobile ads short and simple, ads should be integrated into a larger multichannel campaign that explains the full brand story or message.

“The key to a well-thought-out optimized mobile site is only to include the optimal number of relevant sections from your Web site,” said Richard Wetherill, advertising director at AdFonic, London.

“Too much information will make it data-heavy, crowded and [it will] lack focus,” he said.

Not so richLuxury brands should keep mobile ads relatively simple so that the ads are able to load on all phones.

Brands can make up for excluding rich media by using cre-ative and engaging content.

All mobile ads should also have click-through ability that links the user through to a mobile-optimized site.

A non-optimized site could aggravate affluent consumers and cause them to stop interacting with the brand.

However, the mobile site should contain only the informa-tion for which an on-the-go consumer would be looking.

The key elements would include information on latest col-lections, where to buy, contact numbers and further infor-mation on co-promotions or priority access offers to key events, per Mr. Wetherill.

In addition to an optimized click-through site, simple but creative mobile ads should be complemented by activity that has been integrated correctly through a brand’s mar-

keting and media strategy.

Brands can integrate between in-store, print and televi-sion as well as through other mobile offerings.

“Right now we are seeing some strong moves from brands such as Rolex and Condé Nast who have both optimized mobile sites and apps,” Mr. Wetherill said.

ScanabilityAs technology increases and more consumers begin to use QR codes regularly, these can be used as a great way to increase and integrate mobile advertising.

By Kayla Hutzler

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“The best use I heard was that some designer labels are actually putting either QR codes or a simple silicon chip in clothes as a clever [digital] pull,” Mr. Wetherhill said.

“The silicon chip can even be scanned or picked up by the device through a shop window giving the consumer an opportunity to read up on further detail on the garment,” he said.

For now, Mr. Wetherill said marketers can take cues from luxury brands such as Hugo Boss and Armani that work to implement their mobile ads within larger, multichanel

advertising campaigns.

For example, apparel and accessories de-signer Hugo Boss used a multi-faceted mobile marketing campaign for its male fragrance that comprised mobile ban-ner ads, mobile display ads and mobile search engine marketing that all clicked-through to a mobile site.

In addition, Italian fash-ion house Armani saw high rates of success for its spring collection when it used banners and expandable canvas

ads in the iPhone network that linked to a mobile site.

The most worthwhile effort that luxury brands can run is to jump into the mobile advertising arena, see what works for them and learn from their mistakes.

“Be brave, commit to small steps but have a long-term strategy in mind,” Mr. Wetherill said.

“The early days of the mobile journey can offer invaluable insight whilst signposting your next steps,” he said.

Best-practice tips

• Keep things simple. For mobile ads, keep the message simple, clear and remember to deliver on the value being signposted in the respective banners

• Be targeted, but do not negate scale. Coverage is key, too

• Measure prior to going live to make sure that the partners know what success looks like

Luxury branded search presence keeps top-positioning controlBy Rachel Lamb


uxury brands that employ search and display market-ing have a greater chance of remaining top-of-mind as well as getting a leg-up on competitors and third

parties that may be selling illegal goods.

Using an effective search and display strategy will help luxury brands have more of a presence on the Web. Ad-ditionally, there is a good chance that it will boost brand credibility and make it easier for consumers to find and buy branded products and services on the Web.

“An effective search strategy for a luxury brand is one that provides share-of-voice and top position-ing on a variety of search queries, ranging from brand and product names to product categories,” said Michael Dub, partner at Raspberry Red, Lyndhurst, NJ.

“Qualifiers can be used to tar-get the luxury segment – such as ‘designer’ or ‘luxury’ – in both the keyword list and creative, and negatives can be used to dis-suade searchers for ‘affordable’ or cheap,’” he said.

“Starting with an understanding of your customers’ behavior on the search engines is key, and of-ten existing organic search data can help to inform individual keyword selection.”

First impressionsAny luxury brand can stand to in-crease its visibility and awareness on search engines.

Therefore, brands should use SEO to place their products and services at the forefront of consumers’ minds, both literally and figuratively.

Based on what people are looking for, brands can see powerful and impressive results from SEO in terms of site traffic and click-throughs.

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The chances that the luxury brand will be seen, rather than a competitor’s site, is a lot higher when brands use search and display.

“The presence of a luxury brand on search prevents re-tailers, competitors and knock-offs from obtaining top positioning and allows the brand owner full control of message and positioning, [which is] very important for a luxury brand,” Mr. Dub said.

“Having a search strategy can generate direct, tracked sales,” he said. “Also, the search ads themselves provide branding against key target markets.”

Best-practice tips

• Educated and specific keyword and landing-page selection

• Extensive testing of creative and message

• Using of all available tools to maximize SEM im-pact and minimize costs

In addition to making it easy for consumers to find luxury brands on the Web, a successful search engine optimiza-tion strategy can help prevent competitors from obtaining top positioning.

This allows the brand full control of message and position-ing, which is important for a luxury brand, per Mr. Dub.

To do so, many luxury brands put tags such as their name, Web site name and various products that they sell or for which they are especially known.

Tagging the competition In addition to using tags to keep their sites at the top of the queue, many brands pay for sponsored ads.

These ads can range from store listings and maps to de-partment store listings.

The sponsored ads appear at the top of the page and alongside the column on search engines.

Apart from the obvious in-your-face strategy, having ads at the top of the page may subliminally tell consumers that the brand wants their attention, which makes affluent consumers feel special.

This may also increase the chance that consumers will take the brand more seriously.

Email, mobile should drive multichannel marketing campaignsBy Kayla Hutzler


uxury brands need to focus on all touch points to reach consumers with one unified message that is constantly pushed across multiple platforms to in-

crease brand recall.

For luxury brands, in particular, email and mobile appli-cations are leading the way for interacting with wealthy consumers. Increasingly important for luxury brands is that each message be personalized as much as possible.

“Clients and prospects are using all kinds of platforms and communication tools these days,” said Lorenzo Benazzo, CEO of HyphenLab, New York.

“It is important for luxury brands to be able to reach their market simultaneously via email, social networks and mo-bile apps and SMS and MMS messaging,” he said.

Digital leads the wayBrands must look to reach consumers on every medium to interact with people and other brands.

The current luxury consumer is no longer interested in just print catalogs or the newest mobile apps. Now, consum-ers want to be able to flip through a printed catalog, scan or text a short code and be able to access and order the product online.

For this reason, luxury brands must adapt to all platforms, including print, email, direct mail, social media and mobile.

The core platforms of a multichannel approach should be email and mobile, according to Mr. Benazzo.

Email remains at the forefront, especially given its ability to personalize content to each recipient.

Mobile marketing, whether it is an optimized site or a branded app, is also key as shoppers are more frequently accessing the brand’s marketing content and products while on-the-go.

It is important for brands to make sure they personalize the experience to each consumer as much as possible.

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For instance, a mobile app or SMS messaging should take into account the consumer’s location to offer specific events or deals in the person’s area.

In addition, emails should be personalized with the con-sumer’s name as well as information she may be inter-ested in giving about previous purchases.

Three’s a charmA multichannel campaign should have three main focuses: sales, conversion and efficiency, according to Mr. Benazzo.

In terms of sales, increasing average tickets while also driving repeat purchases should be key objectives for all luxury brands.

In addition, the ability to turn online or boutique visitors into actual customers is as important as driving traffic.

Also, efficiency should always be measured and opti-mized to lower operational costs and positively impact the bottom line.

A centralized multichannel strategy and the right technol-ogy to help achieve efficiency, according to Mr. Benazzo.

Brands should use technology to automate and centralize communications as well as limit redundancy.

This technology should be used to centralize customer in-

formation and their communication preferences to ensure that brands are reaching consumers on their preferred platform be it Web, mobile or print.

“Luxury brands are constantly challenged to produce rich-er and more personalized content that is up to par with their image and price points,” Mr. Benazzo said.

“Clienteling – client-facing, personalized CRM – and the ability to tailor the message to each contact is an impor-tant part of that,” he said.

“A unique multichannel solution designed to simplify and centralize clienteling then becomes a crucial element for brands to market themselves.”

Best-practice tips • Limit redundancy: centralize customer infor-

mation and their communication preferences

• Think mobile: SMS, MMS, apps and mobile access to the Web site

• Continue to support one-on-one communica-tions but only with select segments that are worthy of the attention

Multichannel marketing is no longer an optionA Q&A with Affluent Insight’s Chris Ramey


ultichannel marketing is no longer an option for luxury brands since affluent consumers expect brands to be present on all the channels that they

use at all times.

Luxury brands need to remember that a multichan-nel approach reinforces a brand’s story and offers the opportunity to drive consumers to additional plat-forms. As technology increases, it is hard for brands to decide on which medium to focus, although a unified message is key no matter which channel they choose.

“Multichannel marketing is necessary because in a highly-fragmented environment, no one chan-nel can drive enough business or elevate an orga-nization,” said Chris Ramey, president of Affluent Insights, Miami.

“The best marketers are using the strengths of each me-dium,” he said.

Mr. Ramey discusses the multichannel shopper and how luxury brands can devise a unified multichannel campaign in this interview.

Is there such a thing as a multichannel affluent con-sumer or luxury shopper?Luxury shoppers are often multichannel, but brands should not assume a luxury shopper is necessarily an affluent consumer.

However, multichannel marketing is necessary because in a highly fragmented environment, no one channel can drive enough business or elevate an organization.

Every company, depending upon their targeted cli-ents, will generally find a channel that is best-suit-ed for them and then use other channels to support that platform.

Because all consumers are different, there is no right plat-form for all brands.

It is safe to say that historically for luxury brands, print has been the main platform and it will not go away.

However, the evolution of ad-ditional channels will change.

What defines a successful multichannel strategy for luxury brands?Continuity, effectiveness and ROI are the main signifiers of a campaign’s success.

The important pieces to obtaining success are to under-stand your customer, understand what resonates with your customer and understand the metrics and benefits of each category.

Marketing is not as simple as it used to be.

Should a particular retail channel lead over others?Each retail channel has strengths and weaknesses, just as each product category has unique strengths and weaknesses in how it is purchased and can be marketed.

The best marketers understand and leverage their particu-lar sweet spot.

Historically, luxury customers or affluent consumers made their purchases in-store, but the Internet is turn-ing that upside down and no one can ignore that any longer.

That is one of the reasons we call bricks-and-mortar stores “b r i ckasaurus , ”

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because no one can guarantee the relevance of bricks- and-mortar.

Where should marketing focus in a multichannel eco-system?An ecosystem is by definition dependent on interacting and competing forces.

Success comes from the proper balance for your particular category, so there is no one right way.

For instance, who is to say in the future the luxury sales-person will not go to the luxury shopper?

There are concierge doctors, after all.

We cannot predict what the future is, but I would hold off on any 10-year leases.

Will digital media, such as online and mobile, redefine the multichannel in luxury?Digital media is a channel which you may ignore or em-ploy. It is rare when a marketer – luxury or otherwise – has an unlimited budget.

Good marketers have choices, and they know how to say no and when to say yes.

There is, however, a corporate evolution at play.

For example, digital is no longer free, and publishing is alive and well.

The initial fast growth in digital media was the result of the perception that digital is free.

Companies often handed digital in-house and, therefore, it was budgeted differently.

As the market grows, everyone has to take a second look at where their dollars are being invested.

Successful managers take a broad view of the entire ecosystem and then strategize and invest appropriately without bias.

Innovation and knowing where consumers and luxury customers are is more important than ever before.

Mobile marketing engages consumers during purchasing processBy Kayla Hutzler


obile marketing is no longer disputed by luxury brands since it offers a direct way to interact with consumers at all different levels of engagement.

The mobile platform can inform and excite new consumers about a particular brand through QR codes and engaging mobile apps. In addition, mobile marketing is important to stay top-of-mind and drive sales with new consumers.

“Luxury brands should be using [mobile] as a marketing channel to immediately deliver more engaging, targeted brand experiences to consumers captivated, motivated or interested in [learning] more from brands,” said Jane McPherson, CMO of SpyderLynk, Denver.

“[This] provides the opportunity for a deeper connection to consumers by engaging targeted consumers in one-to-one marketing dialogues,” she said.

Mobile massesMobile marketing is quickly becoming the No. 1 concern for retail brands.

The ability to provide consumers with immediate informa-tion, regardless of which stage of the purchasing process a consumer is in at the time, is one of the biggest assets that mobile marketing brings to the table.

For example, mobile QR codes or SnapTags can intrigue new consumers through print or out-of-home advertise-ments to learn more about the brand through its mobile- optimized site.

In addition, mobile marketing can provide consumers who are in-store with an opportunity to learn more about a product through a bar code or SnapTag.

Also, brands can use mobile features such as SMS and mo-bile applications to keep previous customers engaged with the brand and its new offerings.

Most affluent consumers are using smartphones or tablets on a daily basis.

This makes mobile apps, bar codes and SnapTags a good way for luxury market-ers to increase their brand reach and help them reduce marketing waste.

“Marketers can eas-ily build a brand-specific mobile mar-keting database of consumers who want to hear regularly from a brand,” Ms. McPherson said.

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“This mobile database marketing opportunity allows a marketer to maintain a relationship with target consum-ers,” she said.

Snapping up consumersBefore a mobile campaign can be put into action on the consumer side, a marketer needs to establish a business objective for the campaign.

Objectives can range from delighting consumers with ad-ditional content to driving a sale through a SnapTag, bar code or messaging campaign.

Luxury brands should also take into consideration the needs of the target consumer when devising their mobile strategy, according to Ms. McPherson.

Consumers’ needs can range from functional to emotional.

For example, consumers glancing through a brand’s cata-log may want more information on product features prior to making a buying decision.

In addition, consumers browsing a magazine might be best-engaged with a brand-experience campaign.

Overall, the main objective of any marketing campaign is to increase brand awareness.

Often times the best way to engage consumers through a mobile campaign is to include a call-to-action.

The call-to-action needs to be prominent so that an af-fluent consumer who often does not have much free time

sees the value of participating.

“[Mobile mar-keting] provides the opportunity to build a seg-mented database of consumers interested in an ongoing rela-tionship with a brand,” Ms. McPherson said.

“SnapTag campaigns [particularly] accelerate purchase cy-cles by enabling marketers to craft campaigns that impact a consumer’s entire path to purchase,” she said.

“[This includes] engaging, influencing, informing or in-centing based on the consumer opportunity and the mar-keting objective,” she said.

Best-practice tips

• Start with a business objective and a target market

• Craft a campaign that is of interest to the target consumer

• Create a sustainable relationship with customers

Content is key for mobile appsBy Kayla Hutzler


obile applications give luxury brands a chance to engage and interact with affluent consumers in ways that offers product information and harmo-

nizes the brand with the luxury lifestyle.

Mobile apps should not only include product information, but current technology allows brands to create interac-tive, multimedia content that engages consumers in a way the coincides with the affluent lifestyle. Luxury brands also need to consider the devices that their target consumers are using and optimize their presence on these devices.

“Interactive multimedia components allow consumers to connect with the brand on a whole new level,” said Laura Woolston, marketing manager at Mobclix, a Velti company in San Francisco.

“For many consumers, this is the only opportunity for them to feel part of the brand and get an inside look,” she said.

Content is kingEngaging content is a must for all luxury brands that choose to create a mobile app.

Particularly for affluent consumers, simply providing a mobile-optimized site with product information is not

enough to keep the consumer engaged with a luxury branded mobile app.

To stay ahead of third-party retailers that create a lifestyle around content such as Net-A-Porter, luxury brands need to provide engaging, interactive multimedia content on their mobile apps.

Mobile apps that host games, editorial and video content will increase the amount of time that a consumer spends with the brand per app visit.

Content will also increase the instances of luxury consum-ers visiting the app in between purchases.

This allows the luxury brand to stay top-of-mind in be-tween each luxury purchase, which for products such as luxury cars can be as long as three years.

“Video and multimedia components will definitely engage consumers more than static images,” Ms. Woolston said.“On average, an app will see at least a three times increase in engagement with video,” she said.

Device discoveryIn addition to creating an engaging app through content,

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luxury brands should also consider which devices their target consumers are using.

Most likely, the iPad offers the largest reach with the least amount of marketing waste for luxury brands, according to Ms. Woolston.

Moreover, affluent consumers are more likely to own an iPad than aspirational consumers. The iPad can also offer a better shopping experience than a smartphone because of the increase of canvas space.

“The brand needs to think of both the software and hard-ware capabilities when choosing what to develop for,” Ms. Woolston said.

Once a brand chooses the platform and creates engaging content, it needs to make sure that it is continually updat-ing the content and product offerings.

Constant updates will bring a brand’s current users back into the app and keep them engaged with the brand.

Updates are also a great way to push new content and

marketing campaigns.

“In the end, content is king and your app will only survive if it engages with users,” Ms. Woolston said.

“Also, it is critical that there is a solid marketing plan in place prior to launch,” she said. “The first two weeks of an app’s life is most critical and typically determines how successful it will be.”

Best-practice tips

• Invest in user experience. Bringing luxury into the app experience is key to correctly portraying a luxury brand

• With the number of smartphones increasing, developers should start planning on expanding reach and diversifying their platform portfolio

• Make sure to listen to users and update the app and content based on the feedback

Television advertising still holds appeal for luxury brandsBy Kayla Hutzler


Luxury brands cannot disregard traditional television advertising due to an increase in digital marketing, since they can use the new technology to increase

their appeal across the masses.

To get the most out of TV advertising campaigns, brands should focus on developing engaging creative concepts and displaying this in the appropriate context. Brands should also consider newer TV channels, such as Google TV, to cut back on the waste that accompanies mass- advertising approaches.

“TV, for the foreseeable future, will continue to be the dominant marketing player that it always has been,” said Greg Angland, senior vice president of Blitz Connects, Waltham, MA.

“Fragmentation plays a big role, but people are still watch-ing [TV] in very high numbers,” he said.

“First and foremost is to have creative that will engage with the target audience and will breakthrough and be in-teresting and be in the appropriate content areas.”

Channel surfingLuxury brands need to focus their TV ads on the appropri-ate channels as well as the appropriate programming.

Too often, brands run a commercial and miss their target audiences by not concentrating on buying the right day, time and channel slots to reach these people.

For example, a luxury hotel may want to run a commercial on a travel channel during the evenings or weekends when adults are most often home and watching TV.

In addition, brands should include the TV as one factor of a 360-degree holistic approach, per Mr. Angland.

This can include having a print ad in corresponding pub-lications, such as running the same campaign on the His-tory Channel and a historical magazine, or including on-screen mobile short codes or some other call-to-action.

To reduce waste, luxury brands need to focus on channels such as CNBC or Fox News, which are more likely to have a higher percentage of affluent, educated viewers.

In addition, cable channels can rapidly cut down on the amount of waste that advertisers normally encounter on network TV.

“So often you see content run in areas that is not as di-rected as it could be,” Mr. Angland said.

“With the ability to target more tightly using channels like cable television, you can really understand the profile [of the viewer] and deliver the right message in the right en-vironment,” he said.


Dividing the massesNew technology, such as GoogleTV, TiVo and iTV are of-fering ways for brands to cut down on the waste of mass TV advertising.

“These give brands additional addressability opportunities in terms of profile,” Mr. Angland said.

“TiVo and iTV overlay, allowing people to request more in-formation about products,” he said.

Google TV allows brands to use the Google search plat-form to overlay data collection information and build a national buy with a targeted profile.

The problem is that it is only in about 25 percent of house-holds, per Mr. Angland.

Still, this technology cannot be the ultimate end-all for luxury brand TV advertising.

Marketers need to think outside the box and present themselves in unexpected places that will surprise and therefore intrigue affluent consumers.

“Generally, luxury brands are looking for people who are willing to spend higher amounts of money, and to align the quality and the brand which is equally important,” Mr. Angland said.

For example, TV advertising in elevators allows brands to pick in which professional buildings they want to display their brands.

Additionally, luxury brands can also think about using Taxi TV ads to target affluent New York consumers.

“It’s hard because TV by its very nature is a mass medium,” Mr. Angland said.

“The percentage of the popula-tion that has the extra income to buy luxury goods is shrinking, so TV tends to be a strategy much further down the line in luxury brand’s market-ing,” he said.

“But, [in the end], it’s all about being as targeted and relevant as possible.”

Best-practice tips

• If the brand is going to use TV, it should spend the appropriate budget to produce a high quality spot to align the brand appropriately

• Take the ability to understand the target to the best of the brand’s knowledge and align this with programing, not only on networks, but also channels where the message will be relevant and contextual

• If there is a budget to do so, a holistic approach is a very smart way to do whatever the brand does on TV also in a print application

Radio is a mass-reach platform that can be highly targetedBy Kayla Hutzler


adio advertising is still a viable way for luxury brands to reach affluent consumers, particularly if they focus on radio programming.

While being a mass medium in nature, different radio pro-gramming and station formats allow luxury brands to tar-get their niche audience. Digital radio, such as Pandora, is another way for companies to reach affluent consumers in way that easily connects to a multichannel campaign.

“With luxury specifically, you have to be careful because consumers don’t want to be hard-sold, they want cred-ible information and a soft-sell,” said Greg Angland, senior vice president of Blitz Connects, Waltham, MA.

“The best strength [of radio] is the theatre of the mind and allowing people to visualize what you want them to do and using the imagery of the mind to draw people where you want them to go,” he said.

From the massesWith the wide range of stations and radio programming, it makes it easy for luxury brands to use the mass-nature of radio to target a relatively niche audience.

For example, all-news radio channels reach 257 million people whose personally-owned securities are valued at $150,000 or more.

In addition, classical music radio stations reach 203 million people whose homes are valued at more than $500,000.

These programs of-fer opportunities for luxury brands to reach their target consumers while they are out-and-about and possibly interacting with oth-er forms of advertis-ing such as news-papers or the Web

while they are listening.

Also, digital radio formats such as online radio or satel-lite radio offer another way for luxury brands to reach consumers in a highly-targeted environment. Online ra-dio stations such as Pandora can easily drive traffic to a branded Web site or social media page with click-through visual ads that are accompanied by a traditional radio ad format.

Additionally, many brands have ads on Pandora’s mobile application.

“With Pandora, if you have compelling piece of audio that will run during the music breaks you can get people to take action right then and there by having them click through for more information and go to a landing page,” Mr. Angland said.

Soft sell In terms of messaging, it is important for luxury brands to

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convince consumers to take the next step, whether that is downloading an app, visiting a Web site or joining the brand’s social media network.

Affluent consumers do not want to be told what to do through a hard-sell, and they are not normally interested in one-day sales or discount deals.

A radio ad has to have a soft-sell aspect to it, which gives consumers a URL or short code that allows them to get more information in a way that is convenient for them, according to Mr. Angland.

By allocating 10 percent of a brand’s budget to radio, a brand’s online search increases 52 percent, according to a 2010 study by the Radio Advertising Bureau in Britain. In addition, brands should keep a radio ad message to

the point.

“Radio messaging should be concise, compelling and as engaging as possible,” Mr. Angland said.

“Just because you can buy a 60-second spot doesn’t mean a brand should if they are going to fill the rest of it up with music,” he said.

Overall, the biggest feature that radio offers over other advertising methods is its frequency, which helps to further drive brand recall.

This can be particularly important in tough eco-nomic times when even luxury consumers spend longer amounts of time considering purchases and viewing them as lifestyle investments.

As affluent consumers are beginning to compare prices, look for a certain quality level and wait for bargains from trusted brands, radio represents an opportunity for advertisers to reflect their brand’s luxury qualities.

“Radio can certainly be effective on both levels and it still performs very well,” Mr. Angland said.

“To have it be part of a multichannel approach will most often yield better results, although ra-dio can drive retail on all levels,” he said.

Best-practice tips

• Optimize radio usage with sounds because the best strength of radio is the theatre of the mind and allowing people to visualize what the brand wants them to do

• Buy the stations that reach the target audience and buy them well before moving to others. Do not try to be on 10 stations instead of using three relevant ones

• Have a call-to-action or a measurement piece to see how the campaign is performing

Agencies need to understand the nuances of the luxury customerA Q&A with iProspect’s Andrea Wilson


any luxury brands pride themselves on their mar-keting prowess, but behind every luxury brand is a well-educated and knowledgeable advertising

agency that helped them get there.

Brands may choose to hire a few different agencies for specific needs or one company for a broad market-ing swoop. However, all luxury brands rely on the sea-soned opinions of experts who know the ins-and-outs of the industry.

“Luxury brands should expect three main things from their marketing service partners: providing best industry prac-tices, recommending new opportunities and understand-ing the needs of their luxury client,” said Andrea Wilson, Fort Worth, TX-based luxury practice lead at iProspect.

“All of this hinges on the ultimate requirement that the agency has educated opinions and shares them with their luxury client, even if those opinions differ,” she said.

Ms. Wilson discusses best practice and need-to-know in the relationship between luxury brands and their advertis-ing agencies in this Q&A.

Are online, performance-based ad agencies getting their fair share of luxury ad dollars?There are three main groups of luxury marketers as de-fined by their investment and focus on online advertising. The first and smallest group are the brands that commit fully to new and current customer growth and retention by investing appropriately in each of the major online strategies such as search, display and social.

Like their product, they push to be best-in-class and first-to-market by maintaining a broad online portfolio and pursuing new and appropriate opportunities that match their customers’ needs as they come available.

The second largest group are those that maintain a rela-tively conservative online portfolio by investing in only some of these main online strategies, or all at small levels.

The biggest miss in this group is not talking to the customer in each of the places they are on the Web or not completely focusing on the avail-able opportunity to its fullest potential.

The third and most com-mon group are those luxury brands that steer away from new forms of market-ing by continuing to only focus on traditional marketing outlets such as fashion magazines.

They usually have little to no presence in search engines and do not participate in display or social advertising.

Clearly, this group will struggle with brand awareness and new customer growth, especially as their customer’s time spent online evolves. In a perfect world, the majority of luxury brands should be in the first group, committing to fully participating in digital performance programs.

However, the majority of brands fall into a much more conservative last-to-market group that continues to focus nearly solely in traditional, non-digital forms of marketing.

This is a big loss in terms of new customer growth, current customer affinity, awareness and potential online revenue. How can luxury brands stand out in a fragmented ad, marketing and media market?Luxury brands can stand out by leading new and innova-tive advertising formats and technologies.

Being first-to-market and innovative is a fast way to gen-erate buzz, versus waiting until other brands participate before executing a digital strategy.

Luxury brand products are fresh and best-in-class, so lux-

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ury brands’ digital marketing campaigns should be as well.

Luxury brands should also look at campaigns holistically by ensuring that there is equally weighted representation in each major marketing outlet, both online and offline.

This will ensure the brand audience sees a consistent mes-sage, from banner ads, search copy and Facebook images, to magazine ads, TV commercials and billboards. What should luxury brands expect from their marketing service partners?Luxury brands should expect three main things from their marketing service partners: providing best industry practices, recommend-ing new opportunities and under-standing the needs of each specific luxury client.

All of this hinges on the ultimate requirement that the agency part-ner has educated opinions and shares them with their luxury cli-ent, even if those opinions differ.

There should be frequent and healthy discussions between an agency and the brand to ensure that the strategies are executed as strong as possible.

Agency partners should know the best practices of digital strategies and be able to communicate and execute those effectively.

They should also be tracking and reporting results, as well as com-municating lessons learned and recommendations for the future.

Partners should also be constantly bringing new opportunities and ideas to their luxury clients, shar-ing new technologies and well-thought out strategies to ensure

luxury brands’ digital marketing strategies constantly evolve and move forward.

Finally, agency partners need to have a strong understand-ing of their clients’ business.

From the brand voice that appears in all marketing to the typical approval process, agencies need to understand the the luxury customer and the brand’s unique needs.


This understanding will ultimately make the entire rela-tionship and results stronger and easier to maintain.

Could you offer three best-practice tips for effective luxury marketing in the digital space?Have a well-functioning Web site that focuses on product and brand education and ease of purchasing.

This means featuring a full product catalog – using full images and various views, as well as detailed information about the product as well as pricing.

Additionally, functions that make it easy to purchase, such as click to buy, saved personal purchasing information, iPad and mobile functionality and store location detail to buy offline.

Know where the luxury customers are when they are on-line and ask them what they want and expect from a brand.

This will help guide a brand’s digital strategies and also allow its customers to know the brand, respect its opinion and want to satisfy them.

Invest and focus on digital strategies that place a brand where its customers are and where they want the brand to be.

This will likely include search engines, content Web sites and social networks.

Luxury consumers are definitely on search engines, so fully fund luxury brand search programs.

Brands should cover 100 percent of demand on their trademarks and product terms and invest to some level in non-brand category terms to grow brand awareness and new customers.

Show the luxury of the brand in the image of display ads, either through direct buys with appropriate sites that its customers frequent, or through specific behavior.

For example, remessaging, remarketing or retargeting dis-play programs are a very strong way to share brands’ dis-play ads with visitors that have been to their Web sites but have not purchased.

Most premium networks allow brands to hand-select the sites they want to appear on and the results are high in revenue return and new customer growth.

If luxury customers are telling brands they want to see them on Facebook and Twitter and that is an appropriate outlet for the brand, put together a social strategy that the brand is comfortable with, and use the agency for its ideas as well. Is the future of luxury online, mobile and store?Not only is the future of luxury online, mobile and store, it is as much the future as it is the now.

It is all about ease.

Customers want to learn about and buy luxury products in the way most convenient to them.

That is almost always by going online first, through their mobile or tablet, then going in-store.

Luxury brands need to ensure that they are appropri-ately investing in search, display and social strategies to reach new customers and communicate with their current customer base.

Once those customers go to their Web site, luxury brands need to ensure their Web site shares extensive product in-formation and images, and makes it conveniently easy to find and buy products.

Cause, event marketing allows innovative, personal experiencesBy Rachel Lamb


rivate events and fundraisers have often been a key opportunity for luxury brands to connect with their most valued customers while proving their loyalty to

a charity or offering special deals.

Many experts are encouraging brands to collaborate with others so that they can further expand their customer base. Indeed, cause-related events present opportunities for brands to get innovative and creative, which will de-light the affluent consumer.

“Events are helpful to a luxury brand for a number of rea-sons,” said Greg Furman, CEO of the Luxury Marketing Council, New York.

“They are high-touch and allow for a level of intimacy that broader media such as direct mail or Web do not have,” he said.

“When I say high-touch, it means that it allows market-ers to meet prospective or actual clients directly, giving them the ability to showcase a venue, product or services in ways that set them apart from competitors.”

Series of eventsOne of the best reasons to collaborate with another brand in cause-related marketing is the opportunity for an in-creased client list.

Hypothetically, if a luxury automaker connected with an upscale hotel and restaurant and all three invited their best clients, then each brand would have access to those quite similar to their best customers.

Indeed, if the event allowed consumers to bring guests, there is a good chance that they would also be the kind of customer that luxury brands target.

“The consumers and their friends probably are within the same demographic and would enjoy or be able to spend money at the event,” Mr. Furman said. “Birds of a feather flock together.”

Not only will this increase the number of consumers that brands can connect with, but it also al-lows them to collect data and push sales and promotions on a special and customized basis.

Luxury brands that use event mar-keting to showcase their partner-ship with a particular non-contr-voersial charity are the savviest.

“If you auction things off and give proceeds to a charity, it just

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of their best customers so that those consumers truly feel special.

“Brands should try to do well by doing good,” Mr. Furman said. “It is increasingly important for brands to show that they are good citizens and they are motivated to give back and are involved as good corporate citizens.”

Best-practice tips

• Look for kindred spirit brands to partner with to share cost and partnership

• Intimacy of events is now the way to go. People want that sense of being part of a smaller inti-mate group

• The customer is hungry to know what is the best of the best, but they do not want to be talked down to. Allow them to enjoy the experience and talk about what a special experience the brand provided them

sweetens the mix,” Mr. Furman said. “The charity wins, the brand wins for getting more clients and the consumers feel good about themselves.

“It’s win-win-win,” he said.

Customization is keyBrands need to remember to customize these events.

Discounting is not important nor impressive to affluent consumers, since money is not a problem.

However, these types of consumers definitely respond to customization.

If consumers are going to pay high prices for goods and services, then luxury brands need to do their best to in-crease CRM and prove that they know their customers.

Therefore, inviting customers to an event is a great oppor-tunity to show them how valuable they are to the brand.

This is especially convenient if brands invite only 100

Internet is the biggest legal challenge for luxury brandsBy Rachel Lamb


lthough the Web presents many opportunities for luxury marketers looking to engage with consum-ers, it can also be one of the most dangerous tools

against them.

Privacy, copyright and counterfeit issues are only in-creased by the openess of the Internet. Luxury brands need to make sure that they are careful to protect their brand’s reputation and image while making the most of the Web.

“The Internet is perhaps the biggest battle for any luxury brand today,” said Martin J. Feinberg, partner at Olshan Grundman Frome Rosenzweig & Wolosky LLP, New York.

“With the Internet’s ever-growing presence, all luxury brands need to develop and implement international en-forcement strategies to protect their valuable intellectual property rights,” he said.

Protecting assetsEven more important than monetary value, the biggest as-set to a luxury brand is its name and reputation.

This is why it is so crucial for a brand to defend itself on the Web.

One of the main assets that needs to be protected is a brand’s domain name, per Mr. Feinberg.

Most luxury brands have an online presence, but the few that do not may need to get on there in case unauthorized retailers try to sell luxury branded products.

That said, the sale of counterfeit goods online is also a huge market.

“These battles need to be fought on several different fronts, including domain name and copyright infringements, as well as the sale of counterfeit products,” Mr. Feinberg said.

“The need for such strategies has been further reinforced by ICANN’s [Internet Corporate for Assigned Names and

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Numbers] announce-ment regarding the expansion of generic top-level domains be-yond the current dot-com, dot-net and dot-org and the worldwide proliferation of coun-terfeit goods being sold via the Internet,” he said.

Take it in-houseBrands cannot take the dangers of the Inter-net lightly and should implement security to protect themselves.

Brands should defi-nitely assemble a team of professionals with enforcement experience, per Mr. Feinberg.

The companies should have both in-house counsel and paralegals as well as outside counsel such as investiga-tors and Internet search companies to support the luxury brand’s efforts.

The large luxury conglomerates such as LVMH Moët Hen-nessy Louis Vuitton, Richemont and PPR have extensive in-house anti-counterfeiting and privacy teams.

Furthermore, other luxury brands such as Tory Burch, Burberry, Louis Vuitton and Cartier have recently won bat-tles against unaccredited third-party Internet sites that were illegally selling branded products.

The most effective means of policing the Internet is to take as many precautions as possible, Mr. Feinberg said.

“Based upon the budget allocated by the brand, this team can then identify the Internet issues and develop an effec-tive and cost-efficient strategy,” Mr. Feinberg said.

Best-practice tips

• Identify the scope of the problems

• Determine a budget to address the problems

• Most importantly, maintain a realistic view as to what can and cannot be accomplished with the allocated budget

Trademark, legal back-up key to protecting luxury brand privacyBy Rachel Lamb


nfortunately, the most common enemy plaguing the luxury industry is counterfeit activity or trademark infringement and the most useful protection is ex-

tensive legal back-up and trademark protection.

Whether it is an unaccredited third party or an alleged trademark infringement by a competitor, there have been many instances recently that have luxury brands putting their fists up. Since there is not an actual way to com-pletely stop counterfeit products, many experts find that legal support yields the best results.

“We generally find that the brands with the most suc-cess in dealing with the problem of counterfeiting take a holistic approach to the issue,” said Travis Johnson, vice president of legislative affairs and policy at the Interna-tional Anti-Counterfeiting Coalition, Washington. “You re-ally have to consider brand protection from end-to-end in your supply chain.

“Beginning at the point of manufacture – particularly if the products or components thereof are manufactured overseas, or by contractors – brands need to keep close tabs on their materials and how they’re being used, as well as how any excess, waste or overruns are being disposed of or recycled,” he said.

Piracy protectionUnaccredited third-party vendors are common in the Chi-natown district of New York’s Manhattan and the beaches of Europe.

Luxury watchmak-ers, jewelers and handbags are the brands that suffer the most. In fact, Louis Vuitton, Cha-nel and Rolex are the most knocked-off designer brands in the world.

While those are easy to spot, some vendors are sneak-ier about their ille-gal handling of fake luxury products.

Many Web sites are now in the business of selling luxury products that are either fake or the unauthorized by the luxury companies.

“Agreements with third-party contractors or vendors should include explicit provisions regarding acceptable and unacceptable practices, as well as clear authority for the brand owner to conduct oversight, inspection and au-diting of the goods,” Mr. Johnson said.

“Maintaining strict practices with regard to labels, tags and incorporating a variety of overt and covert indicators of authenticity is also useful for brands trying to stay a step ahead of counterfeiters,” he said.

The next step is convincing consumers that luxury prod-ucts are worth the prices that they are expected to pay.

Reminding consumers of a brand’s heritage, as well as the unbeatable value, craftsmanship and pride that comes with a luxury product, will help them to steer clear of counterfeit products.

Although brands usually do not have a difficult time sway-ing the truly affluent, it is the younger, aspirational con-sumers that need to be watched.

More than the monetary value, a poorly-made product passing off as a luxury good could damage the brand’s reputation and dissuade future customers from buying.

“One of the most important things a brand can do – and a

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consideration that is sometimes overlooked – is to engage their customers, to educate them not only about the harm caused to the company by the trafficking of counterfeit goods, but also the broader harms caused by that illegal activity,” Mr. Johnson said.

Trademark infringementNonetheless, a luxury brand’s biggest competitor is not third-party sources – it is other luxury brands.

Quite a few pairs, such as Polo Ralph Lauren Corp. versus the United States Polo Association or Christian Louboutin versus Yves Saint Laurent, have proved that luxury brands need to protect themselves from competitors as well as third parties trying to make a quick buck off of tourists.

To do this, many brands have sought trademarks on cer-tain logos, colors and emblems.

For instance, Ralph Lauren won a battle against the Polo Association because the logo on its fragrance looked too similar to the luxury brand’s trademarked polo pony.

Additionally, Christian Louboutin is slowly gaining ground in the lawsuit against Yves Saint Laurent because the for-mer claimed a trademark on red-soled shoes.

Logos and colors become synonymous with certain luxury brands, especially when the public connects them.

In this case, the only way to protect from trademark in-fringement is to do so legally.

“It probably goes without saying that brands need to reg-ister their trademarks wherever they’re selling their goods, and preferably in any market into which they intend to expand their operations,” Mr. Johnson said.

“Where the opportunity is available, they should also re-cord their intellectual property rights with the local cus-toms agencies,” he said. “Taking the time to provide train-ing to customs and other law enforcement officials, to assist in identifying counterfeit product, helps in the inter-diction of counterfeit goods before they reach the market, and also helps to put a face on the brand.

“It lets law enforcement know that this is an issue your company cares about, and that your company is commit-ted to providing any assistance that might be needed.”

Best-practice tips

• Make agreements with third-party retailers to sell products that include explicit provisions regard-ing acceptable practices, as well as clear authority for the brand owner to conduct oversight, inspec-tion, and auditing of the goods

• Register trademarks wherever they are selling goods and any market in which they plan to ex-pand operations

• Brands should record their intellectual property rights with local customs agencies to ensure that officials have a direct point of contact

Holistic multichannel approach is vital for driving in-store salesBy Kayla Hutzler


ultichannel marketing is increasingly

effective in driv-ing sales and influ-encing purchasing decisions for retail luxury brands.

Luxury shoppers are not using one chan-nel to discover new products. Affluent consumers are now increasingly seeing a brand in a magazine, researching it online and going in-store to make the final purchase.

“All brands today need to think multichannel, including luxury brands,” said Kim Edlin, vice president of market management for retail at Epsilon Targeting, New York.

“To be successful, marketers should focus on communicat-ing meaningful and targeted messages across channels to their audience of high-potential buyers,” she said.

“Effective multichannel campaigns start with targeting buyer needs.”

360 degreesMultichannel marketing is no longer an option for luxury brands, whose target consumers are opting-in to a vari-ety of different platforms each day such as mobile, print magazines, surfing online, watching television or listening to the radio.

A successful marketing approach presents consumers with a holistic approach and boasts a unified message across all channels.

Brands have the highest chance to increase sales when they approach consumers on all communication levels and allow them to find a brand on whichever medium they choose.

“[Overall], luxury marketers should aim to build awareness and influence purchase decisions,” Ms. Edlin said.

The most effective marketing also takes into account consumer data.

Researching and analyzing the way a brand’s target con-sumers spend their money, such as mostly online or mostly in-store, will help a brand decide on the leading channels in their marketing strategies.

“The entire multichannel campaign should be planned and executed to deliver a cadence of communication that con-tinually advances brand consideration and leverages what you know about the individual, culminating with the final purchase decision,” Ms. Edlin said.

Traditionally, print and direct contact through mail, follow-up phone calls and email were the most effective ways for luxury brands to reach their target consumers and encour-age in-store sales.

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However, digital is becoming increasingly important as more affluent consumers are using their smartphones and tablets to research products while they are on-the-go.

Geo-targetingOne way to drive consumers in-store and increase sales through mobile is to use geolocation applications.

“Digital has created new opportunities to reach the con-sumer where and when they are engaged with your brand,” Ms. Edlin said.

Brands are beginning to drive consumers to their bricks-and-mortar stores by texting consumers with real-time information on deals and events in their local stores.

In addition, geolocation mobile apps allow a consumer to seamlessly research a product and find out if it is available in their local stores.

“Engaging with consumers when they’re in the neighbor-hood to stop by the retail store is becoming a reality,” Ms. Edlin said.

If a luxury brand chooses to implement mobile advertising as a lead part of their multichannel campaign, it needs to ensure every aspect of the campaign is up-to-par with the luxury brand’s status and quality.

For example, a luxury brand should have a quick-loading, mobile-optimized site that consumers can click-through to from the banner ad.

“As with all channels, communicating a clear, concise and compelling mes-sage is essential,” Ms. Edlin said.

As long as a brands present a unified message and align every campaign with their core values an, they are likely to increase sales with a multichannel approach.

“According to our recent multichannel trend report, mul-tichannel repeat buyers alone spend nearly twice as much as buyers who come in through a single channel, such as purely online,” Ms. Edlin said.

“Each channel presents unique opportunities and chal-lenges,” she said. “But the best approach is an integrat-ed program across the channels in which consumers are engaged.”

Best-practice tips

• Ensure messaging is consistent in all channels

• Ensure multichannel campaigns are coordinated in terms of timing. with email, direct and display. to optimize the contact strategy

• Drive potential buyers to the store, bricks-and-mortar and online, and ensure sales associates or customer service representatives are poised and prepared to influence the final

purchase decision


Communicate an over-simplified message to luxury consumers

IA Q&A with Ries & Ries’ Al Ries

n an era of brand exten-sions and trial

runs on different products, some luxury brands are having trouble finding their true voice. In some cas-es, it is not what brands say, but how they say it.

Luxury marketers, more than ever, are realizing the true power of their brand and what they mean to consumers.

However, the most important thing is the message that gets across in the right voice and medium to avoid confusing customers.

“Ironically, the more marketing messages that circulate, the more important it becomes to have a simple, easily-understood message,” said Al Ries, chairman of marketing strategy consultancy Ries & Ries, Roswell, GA.

“The answer to an over-communicated society is the over-simplified message,” he said.

In this interview, Mr. Ries discusses focus, getting the company message across and the power of branding.

Do most luxury brands have focus?Brands can’t be a well-known luxury brand without a fo-cus. So, yes, most successful luxury brands have a focus.

However, they are not necessarily expressed verbally.

For example, Mercedes-Benz is widely perceived as a prestige vehicle, but the brand never mentions this fact in its advertising.

Most luxury brands have achieved their focuses through publicity, not advertising – look at the publicity brands such as Chanel have received over the years.

How key is positioning in an age when consumers are bombarded with hundreds of thousands of daily marketing messages?Ironically, the more marketing messages that circulate, the more important it becomes to have a simple, easily-understood message.


The answer to an over-communicated society is the over-simplified message.

The brand is everything for a luxury manufacturer, retailer or service provider. Is that notion understood?In working with luxury manufacturers in many different categories, we find they all understand the power of the luxury brand.

Even consumers in today’s economy will willingly pay more for a brand they want than a comparable product with a little-known brand.

There is something reassuring about buying a well-known brand, especially for a luxury product.

You might say that luxury products need brands more than ordinary household products.

What are some of the biggest mistakes that luxury brands are currently making that could hurt their sales in this economy?Selling products at big discounts.

Many high-end retailers are making this mistake and they

are teaching consumers to wait for a sale before they buy.

It’s not a luxury product, but some of the strongest brands today are marketed by Apple.

Apple never runs a sale on its products. There are never ads that say, “Buy one iPad, get one free.”

As a result, this brand is incredibly strong and Apple is the second most-valuable company in the world.

Are brand extensions a good or bad sign for the fu-ture of luxury?Brand extensions might increase sales and profits, but generally they detract from the value of the brand.

Some brands, however, are so strong that the effect of line extensions are hardly noticed. Ralph Lauren, for example, might be one of these brands.

Most luxury brands, however, are going to be better off if they avoid line extensions.

Rolex, for example, is focused on watches and has become the largest-selling luxury watch brand in the world.

Social media adds personal experience to aspirational consumersBy Rachel Lamb


uxury brands that use social media platforms such as Facebook, Twitter, Tumblr, foursquare and blogs are in a unique position to add a personal element when

engaging with fans.

Most brands are using the sites to push promotions, exclu-sive offers and contests. However, the especially savvy are tapping social media as a vehicle to showcase new cam-paign photos and videos.

“Social media gives luxury brands a chance to interact, on a somewhat personal level, with brand enthusiasts who take the time to raise their hand and say, ‘I’m a fan of this brand, I want a relationship with this brand,’” said Ron Schott, senior strategist at Spring Creek Group, Seattle.

“In those cases, it’s a direct delivery method that gives them a chance to target users they know already have an affinity for the brand and who share content with their networks,” he said.

Getting personalQuite a few brands are using social media to deliver a more personalized message to consumers.

For example, many designers choose to show their person-ality on social sites to connect to “fans” or “followers” on their pages.

Marc Jacobs and Robert Duffy from Marc Jacobs, Frida Gi-annini from Gucci, Diane von Furstenberg from Diane von Furstenberg, Stefano Gabbana and Domenico Dolce from Dolce & Gabbana and Christopher Bailey from Burberry have all made guest appearances on their brands’ social media pages.

While some designers such as Burberry’s Mr. Bailey just wish consumers happy holidays or tell them about a new campaign, others such as Mr. Jacobs post personal family and vacation pictures.

Other brands personally reach out to consumers.

Many upscale department stores including Berg-dorf Goodman, Harrods, Bloomingdale’s, Nordstrom, Barneys New York and Nei-man Marcus poll consum-ers on new products or ask them about their weekend plans.

“Interacting with fans in a way that gives them some-thing they don’t get in ev-eryday media is always im-portant,” Mr. Schott said.

“When you look at suc-cessful luxury campaigns, they’re always working with a sense of exclusiv-ity, whether it is actual or

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manufactured,” he said.

“Videos, photos and access to special deals make fans feel like they have information that is beyond the normal pop-ulation – that’s what luxury in social is all about.”

How much is too much?Although being social is the point of social networks, there are definitely some limits for luxury brands.

Brands that rely too heavily on social media could risk damaging their luxury status, since sites such as Facebook and Twitter appeal to all consumers and luxury brands need only to target a niche audience.

“[This] all depends on the content,” Mr. Schott said.

“People have a chance to take part in the networks, but not necessarily have the chance to buy a luxury prod-uct or ever contribute monetarily to a luxury brand,” he said.

After all, social networks should aim to connect with as-pirational, younger consumers since luxury brands realize that their target customers are older and are not usually on social media.

Therefore, this channel is better used as an acquisition tool, and to collect data on consumers for when they are able to spend money on branded products in the future.

“What social media does offer, however, is an easy way to take a snapshot of a fanbase and analyze those fans,” Mr. Schott said.

“If a luxury brand sees expansion of affinity for their brand in a new, emerging audience they can shift focus and cater to that audience, which might not have been focused on before, but now has a chance to purchase their products,” he said.

Best-practice tips

• Know the audience. If brands do not know how they act on social media, all the content in the world is not going to reach their marketing objectives

• Have a strategy and see it through to measure, refine and redirect, if needed

• “Likes,” community sizes, retweets and video views are all good, but only if brands know what they mean and how they are turning those

actions into dollars

Direct mail is more relevant now then in past decadesBy Kayla Hutzler


s digital continues to dominate the marketing world, opportunities are arising for luxury brands to amp-up their direct print mail marketing.

There is currently less spam print mail being sent to con-sumers’ houses with the increasing concern over being environmentally-conscience combined with domination of email as a touch point. This means that consumers are more likely to open a branded piece of direct mail than they have been for the past few years.

“Marketers know that good customers still like to engage with the brand at multiple touch points,” said Neil O’Keefe, senior director of CRM at The Home Depot, Atlanta.

“Who doesn’t like to get a letter from a friend or a card at holiday time?” he said.

“If your customers are highly engaged with your brand, they’ll appreciate this communication as well and will be-

come even greater advocates of your brand.”

You’ve got mailThe most engaging direct mail items are catalogs, accord-ing to Mr. O’Keefe.

This is because Web sites often fail to communicate the luxury or exclusiveness of a high-end offering that can be done through beautiful, printed catalog imagery.

However, a postcard, letter or store-traffic driver is still a great way to stay top-of-mind with consumers.

A brand’s main goal for any type of direct marketing should first and foremost be to build a relationship with the target consumer.

Mail volume, in general, has dropped significantly. This provides the best opportunity in years for luxury brands to be able to stand out with their message.

Building a relationship is highly based on personalization

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that makes the consumer feel impor-tant and special.

This can be done through addressing the card to the right names, provid-ing relevant offers based on past pur-chases and spending behavior or sim-ply providing relevant location-based products and information.

Regardless of the format, be it a catalog or pamphlet, all direct mail marketing should be part of a multichannel approach.

“[Print should] be integrated and per-sonalized using QR codes and URLs that allow for a true cohesive market-ing approach,” Mr. O’Keefe said.

No free lunchPersonally-addressed mail is not going to be a large enough gesture for luxury brands to sell products.

Brands must also aim to create high-ly-creative direct mailings that will engage and entice affluent consumers.

Luxury consumers expect all brand touch points to por-tray the same high-quality standards associated with the brand itself.

After all, any type of printed marketing is a reflection of the brand’s craftsmanship.

Therefore, the direct mail piece must also align with the brand’s reputation and relate to its target audience.

If a brand sends out a boring piece of mail that does not speak directly to the recipient and lacks relevancy, then the brand may quickly lose a lot of money.

Cost is often the biggest challenge faced by luxury brands looking to engage consumers via direct mail. However, Mr. O’Keefe feels that if done correctly, direct mail is worth the higher price of materials.

“Most direct marketers still spend more on print than on any other form of marketing, and with good reason,” Mr. O’Keefe said.

“Print still generates the highest response rates,” he said. “And, compared to non-direct marketing, it still has a higher ROI.”

Best-practice tips

• Make the mailing relevant. Do not mail a promo-tion from a luxury brand to someone without the desire or resources to purchase

• On the printed piece, give consumers choices of QR codes, phone numbers, store locations, Web address and social media

• Make sure the database is current and honor cus-tomers’ communication preferences. Do not use old data and do not mail someone who does not wish to receive mail from the brand

Mail catalogs effective when part of a multichannel approachBy Kayla Hutzler


ail catalogs are still a great, physical touch point to interact with affluent consumers as well as drive Web traffic and sales.

On average, mail catalogs spend 90 days in a consumer’s home, making them a reliable way to increase brand recall and engage shoppers. Creative content and strong call-to-action will make a brand’s mail catalogs successful.

“A catalog is a printed salesperson for your company,” said John Schulte, president of the National Mail Order Asso-ciation, Minneapolis.

“It reaches out and introduces, reinforces and builds a w a r e n e s s , while creat-ing desire, and driving sales,” he said.

“The great thing about market-ing with cata-logs and other mail formats is that there are really so many creative options to draw from

for their strategic creation.”

Goal lineTo optimize a mail catalog, a brand first needs to decide what the major goal of the catalog is, per Mr. Schulte.

A brand needs to decide what its main goals are for the catalog and how it will measure the catalog’s success.

The three most-popular goals of mail catalogs are bottom-line profit, traffic generation to a brand’s Web site, store or third-party outlet and reinforcing a brand’s image, according to Mr. Schulte.

After a brand decides on these major factors, then it can start laying out the strategy that will optimize the ROI for a catalog.

No matter what a brand’s end goal, all catalogs need to have a strong call-to-action.

“After your catalog awakens the desire in a customer to buy your product, you need to tell your customer what you want them to do, and why they should do it right now,” Mr. Schulte said.

For example, if a brand wants people to visit its Web site, it needs to give consumers a reason to do so, such as offer-ing a discount if they order this week or that day.

The same tactics can be used to drive in-store traffic.

“People enjoy getting their catalogs, especially the baby boomers that grew up with them and have money to spend,” Mr. Schulte said.

Printing pressDirect mail cata-logs should also be part of a larger, 360 campaign.

To start, a brand’s Web site should certainly have a prominent but-ton for request-ing a catalog, as well as an incen-

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tive for consumers to sign up such as exclusive items or free shipping.

Having a consumer sign up for a catalog also allows a brand to capture more information about its audience, in-cluding location and phone number.

In addition, every print ad should also have a well-placed mention of the brand’s catalog along with a toll-free number for ordering it.

“If I’m sitting at the doctor’s office reading a magazine and I see your ad, I don’t have a computer with me, and I’m likely to be too polite to tear out the ad,” Mr. Schulte said.

“But if I have my cell phone, I can get my catalog ordered right then,” he said.

Overall, a catalog should create an emotional experience in a consumer’s mind that creates desire.

When designing the creative, a brand should aim to have people imagine themselves using the products in the same situations as the products are featured in the catalog.

Many times, the easiest way for a brand to ensure this is to hire a copywriter and graphic artist who know its product category well.

“The basic thing to remember is that a catalog is a printed advertising vehicle, but it’s also an extension of your store and your store’s image,” Mr. Schulte said.

“It tells your story and influences readers,” he said. “It’s a method of shopping that some people still prefer.”

Best-practice tips

• Keep the customer list up-to-date and free from duplicates

• If prospecting with a catalog, mail to hot-line names first. If they do not work, the rest of the list probably will not either

• Have a copywriter and graphic artist who know the product category

ustomer re-l a t i o n s h i p management

is a growing con-cern among luxury brands since afflu-ent consumers ex-pect a high degree of personalization and quality in re-turn for the stiff prices that they are expected to pay for luxury goods.

As technology progresses, brands have the ability to col-lect large amounts of data, giving them a better chance than ever to increase CRM. Unfortunately, many brands will collect the data and not implement any changes to their CRM program, resulting in low customer retention.

“Top-tier brands in luxury have recognized that building customer relationships is essential, and that only peo-ple can do that,” said Milton Pedraza, CEO of the Luxury Institute, New York.

“Yes, a brand needs to have fabulous products, but it also must have people that can build relationships through in-store experiences and follow-ups,” he said.

“This will increase customer retention dramatically.”

In this Q&A, Mr. Pedraza discusses the importance of CRM and how it should be enforced to optimize customer retention.

What is the state of luxury CRM?Luxury CRM is beginning to really take off in the luxury industry and this is because a lot of companies have re-alized that data is critical.

In the top-tier brands, seven out of nine clients who bought in the last year will not buy in the next 12 months.

Contrastingly, mass retailer Zappos has a 75 percent re-tention rate. That is a huge, dramatic opportunity.

Brands need to understand that even though they are growing in other parts of the world such as the BRIC [Bra-zil, Russia, India and China] markets, they need to get a greater share of wallet with people in Japan, Europe and the United States.

The problem is that brands are creating CRM teams and building systems, but they are bad at data collection and even worse at creating a CRM culture where people do this daily, automatically.


CRM is critical for affluent customer retention

CA Q&A with Luxury Institute’s Milton Pedraza


Why is CRM critical in this age of tablets and smartphones?CRM is critical because brands want to deliver a seamless and extraordinary multichannel client experience.

Multichannel approaches are important because there is proof that people who buy in the store and buy online, or even buy in the outlet stores give you a much higher spend compared to people who buy only online or only in the store.

Overall, multichannel consumers buy a lot more.

Which industry categories excel at CRM?The top-tier ready-to-wear and the handbags and leather goods luxury brands have made the most progress in the past two years.

This is because they have so many more choices and a much greater opportunity to get consumers to buy multiple products.

For example, a brand selling washers and dryers does not control the retail channel in the way that handbag design-ers can by having their own retail store.

When a brand controls its own stores, it can get data as well as control the employees and therefore the entire consumer experience. Whereas in other categories such as beauty and personal care, brands often do not control a department store’s salespeople.

However, if you are Louis Vuitton or Gucci, a lot of their products, be it handbags or cosmetics, are sold in their own retail stores.

Additionally, the more categories a brand has, the more it can cross-sell products.

Can you offer three best practice for luxury CRM?First, a brand needs to establish truly customer-centric targets for the front lines instead of just revenue targets.

For example, customer retention target per store and per salesperson. And make sure compensation and recogni-tion programs are tied to the targets.

Second, brands need to establish a set of service values and service standards which they will use to create a com-pass to engage their customers daily.

Also, make sure the sales team participates in their cre-ation so you get buy-in.

Third, measure everything related to customers such as data collection, retention and referrals.

Then publish the results throughout the organization to make sure every employee knows where the brand stands collectively and individually in living its values and standards daily.

What is the biggest challenge for luxury brands im-plementing a CRM program?The biggest challenge is establishing a customer-centric culture rather than a CRM project directly from the top.

To establish a customer-centric culture, brands need to start with values and they need to know which values will engage their customers.

Then, a brand can create a CRM strategy based on what is most important about the client relationship, and what is important to the company.

Next, a brand should move on to implementing industry standards such as in-store design, follow-up procedures and clienteling.

Out-of-home ads enhanced, not depleted, by digital advancesBy Kayla Hutzler


ut-of-home advertising offers a platform for brands to reach consumers when they are on-the-go and can be used to drive consumers to Web sites and

social media.

Billboards, street furniture and public transit can reach consumers when they are on-the-go during their every-day lives, giving it a leg-up over more traditional adver-tising platforms such as television or print that generally reach consumers at home. Now, through QR codes and calls-to-action, it is also ideal for driving consumers to Web sites or social media platforms.

“Out-of-home advertising reaches active consumers on the path to purchase, when people are away from home and most likely to make purchase decisions,” said Stephen Freitas, chief marketing officer of the Outdoor Advertising Association of America, Washington.

“Unlike in-home media channels that typically reach con-sumers when they are in a passive state, out-of-home connects with people on-the-go,” he said.

“Since out-of-home comprises many different advertising formats, the messages can be demographically targeted

to influence consumers at the right time and with the right message.”

Active advertising Out-of-home advertising has the potential to reach con-sumers when they are on their way to make a purchase, or drive them to do so while they are out of their homes and have easy access to stores.

Billboards, bus stops or benches, public transportation and other types of out-of-home ads reinforce the brand’s message on a daily basis as people generally take the same route to work or school.

In addition, out-of-home ads can be used to reinforce tra-ditional campaign messages that consumers saw on TV or in print.

This is because people are often more likely to react to the out-of-home ad since they are in an active state of mind, as opposed to the passive state that most consumers are in when they watch TV, according to Mr. Freitas.

In addition, out-of-home complements radio since they both reach mobile consumers.

“Radio provides sound, while out-of-home offers pic-tures,” Mr. Freitas said.

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Brands can also target their key audiences through unique and well-thought-out ad placement.

For example, Audemars Piguet took over the New York he-lipad port, one of the most sought-after helicopter landing zones, for the summer to promote its brand to the city’s elite who jet to the Hamptons during summer weekends.

Dating digital The digital world does not take away from the effective-ness of out-of-home advertising.

In fact, in many cases, technology such as QR codes or short codes can be incorporated into billboards or bus station ads as a call-to-action that engages and drives to mobile or Web platforms.

However, if a brand wishes to implement QR codes, it must remember that the ad must be in place that consumers can easily reach.

QR codes are most effective when positioned on pedes-trian advertising structures so that consumers can stop and capture a QR code during their day-to-day activities, according to Mr. Freitas.

Luxury brands should also incorporate social media drivers into their out-of-home strategies.

“Out-of-home is an ideal catalyst for driving consumers to

a branded social media platform,” Mr. Freitas said. “Use the power of the medium to build awareness for social media.”

Overall, the most important thing for brands to keep in mind is that, as with all advertising channels, creativity and relativity to the brand’s image and core values is vital.

Consumers may not spend more than a few glances with an out-of-home ad, so it is important that they associate it with a particular brand right away.

“Include out-of-home as part of a broader media strategy,” Mr. Freitas said. “And think outside of the box.

“The out-of-home medium offers a wealth of creative opportunities,” he said.

Best-practice tips

• Out of home messages should be simple and capture the essence of a brand in a manner that is compelling

• Think about out-of-home holistically by con-structing media plans that incorporate a diverse assortment of formats

• Think outside the box. The out-of-home medium offers a wealth of creative opportunities

Print allows the ability to control brand imageBy Rachel Lamb


lthough luxury marketers are i n c r e a s i n g l y

using digital means to advertise, print still re-mains the best oppor-tunity for brands to showcase their image.

Along with the un-matched imagery, placement in a high-end magazine that caters to affluent consumers is a huge opportunity for lux-ury brands to reach their niche audience. Furthermore, many luxury consumers are still heavy print users.

“While digital is cer-tainly growing, since affluent consumers are often older, cer-tain segments consis-tently index lower on digital than the gen-eral population,” said John Barker, CEO of DZP/Barker, New York.

“The primary benefits of luxury marketing are, first and foremost, awareness, the ability to control the creative im-age and portray the brand in a proper light,” he said.

Pretty in printMost luxury brands decide to advertise in magazines to fulfill their print quota.

For instance, upscale couture, accessories, fragrance and makeup brands choose to run print ads in high-end maga-zines such as Vogue, Vanity Fair, W and Town & Country

where there is a high female readership.

On the other hand, luxury automakers, watchmakers and men’s fragrance typically favor magazines such as Van-ity Fair, Details, Monocle and Wired that generally have higher men’s readerships.

These images are colored and typically glossy, making them particularly attractive to consumers because they exude luxury.

Brands can also choose to take out multiple pages in a magazine to portray different products, an entire line or an experience.

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For instance, luxury hotel chains sometimes take out tri-fold spreads in magazines that feature people on a beach, dining in the hotel restaurant or at the property’s spa.

Meanwhile, retailers show a storefront and apparel and accessories from a collection.

Many luxury brands also take up real estate in newspapers and other publications.

Risky publicationsHowever, similar to all marketing tactics, location is crucial with print advertisements.

Just as positioning in a high-end magazine can add value to a luxury brand, placement in a middle-market publica-tion could be detrimental to a brand’s luxury status.

This is why many magazines and newspapers have par-ticular standards about which luxury brands they place in which locations.

For instance, many luxury brands tend to covet front-of-

book or back-page ads in magazines since those are typi-cally the most-viewed.

Similarly, luxury brands take up the entire second page of newspapers such as The New York Times, Los Angeles Times, The Wall Street Journal and the Financial Times be-cause it is one of the pages that likely gets the most views.

“Conversely, many feel that luxury marketing can actually serve to make products less exclusive,” Mr. Barker said.

Best-practice tips

• Have a strong point of view and something about the ad that differentiates the brand

• The days of simply showing pretty product shots and logo are passé

• Advertising needs to be more creative than ever to capture the eye of the sophisticated consumer

Luxury brands need be wary of ambiguous research trendsBy Rachel Lamb


any luxury companies look at research claiming to have something to do with the affluent market, but marketers should be aware of which studies

to pay attention to and which to take with a grain of salt.

Typically, large, well-known research firms truly know the ins-and-outs of the luxury market and therefore have a greater chance of knowing the real trends and crucial in-formation. However, companies that are afraid of contro-versy or that are just trying to generate publicity may not have the research to be giving truthful information.

“Luxury marketers should always try to learn as much as possible about the methodology that is used to conduct research and then make an assessment of whether the methodology is valid and likely to produce accurate and objective results,” said Ron Kurtz, president of the Ameri-can Affluence Research Center, Atlanta.

“However, one should also be careful of research conduct-ed by a business that needs to avoid controversy to be successful,” he said.

Researching re-searchThere are probably two main trends in research method-ology, according to Mr. Kurtz.

The first is the on-line research pan-els of individuals who have agreed to participate in frequent and often lengthy surveys.

“While this is the least-expensive and fastest way to con-duct surveys, one must question whether the participants are truly representative of the affluent and luxury market,” Mr. Kurtz said.

A second trend is the increasing rate of survey research to support a preconceived or self-serving position of philoso-

phy or to generate posi-tive media publicity.

This is a misuse of re-search that gives the activity a bad image among people who could benefit by having good research data, Mr. Kurtz said.

Before the stock market decline in July and Au-gust, it appeared that the luxury market was making somewhat of a recovery in sales.

This is because a large percentage of the truly affluent – that is, not

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just aspirational – were beginning to buy again.

Nonetheless, the stock market plays havoc with the spend-ing habits of the affluent.

Although affluent consumers can spend despite a stock market slump, most do not want to because they are ner-vous or because of consumer guilt.

“The sales improvement was essentially derived from the wealthiest 1 percent of consumers – with a minimum $6 million net worth – as the so-called ‘mass’ or ‘aspirational’ affluent were still unable to spend as they did prior to the recession,” Mr. Kurtz said.

In the numbersResearch powerhouses have recently been pushing out interesting and suprising data on the luxury market and affluent consumers.

For instance, according to J.D. Power and Associates, hotel chains Ritz-Carlton and the Four Seasons top the charts in overall customer satisfaction.

Furthermore, the number of affluent consumer house-holds in China will increase by 52 million homes in the

next decade, according to a study from the Boston Consulting Group.

Analysts from American Express and Yahoo that work with McKinsey are claiming that engaging consumers today re-quires redefining the marketing organization.

Although it is typically a safer option to acknowledge the bigger research factories, the main way that brands can do their own research is to just listen to their consumers via government-sponsored studies.

“Studies by government entities such as the Internal Rev-enue Service and Federal Reserve Board can certainly be taken seriously,” Mr. Kurtz said.

“Marketers should be skeptical of sponsored research where the sponsor may be trying to simply generate posi-tive publicity or to build support for their market position or brand,” he said.


Is the luxury shopper demographic shrinking?

TA Q&A with Unity Marketing’s Pam Danziger

he unstable economy has caused some

affluent consum-ers to spend less, but it has also caused an entire group of consum-ers to stop spend-ing on luxury goods and services all together.

The baby boomer generation, who prior to the recession accounted for a majority of luxury spending, have ei-ther curbed or stopped spending all together. In addition, younger, Generation X affluents who were buying prod-ucts on credit in line with their perceived wealth are no longer charging so freely, creating a large gap in the luxury consumer demographic.

“I think it’s a very cloudy, confusing picture of these con-sumers,” said Pam Danziger, president of Unity Marketing, Stephens, PA.

“Prior to the recession, baby boomers used to indulge, but now, with the recession and maturity, they have withdrawn because it is not as relevant to their life stage,” she said.

“It’s all driven by demographics and marketers can’t to do anything about the demographics.”

Ms. Danziger discusses the current luxury shopper, how she has evolved over the past decade and how luxury brands can market themselves to a new, more reserved affluent shopper.

What does the current luxury shopper look like?There are mainly two age groups for luxury consumers: the 44-years-and-younger group and the older affluent consumers, a lot of whom are baby boomers.

These baby boomers are a more mature, affluent consumer

group, and since the recession they have sharply curtailed spending or are out of the luxury market altogether.

This presents a challenge because baby boomers are with-drawing and leaving a gap that Gen X just does not have the numbers to fill.

So now, the luxury market needs to wait for the millennials to have the money to spend on luxury goods.

However, people do not start making the big bucks until they are about 35 years old, so marketers have to wait for millennials to become influential in the luxury market-place, which will not be until about 2019-2020.

Has the luxury market evolved or has the shopper evolved in the past few years?The evolution is a very interesting topic. Prior to the reces-sion in 2007, we really had a time when affluents, who are luxury consumers, were spending their perceived wealth.

Their housing values were going up and their 401k’s were going up, so they felt wealthy and tended to spend above their income level.

When the recession hit and the stock market went down, home values bottomed out and these affluent consumers had to go back to living on their real income, not their perceived wealth.

The average income at the top 20 is roughly $170,000– that will give people a comfortable lifestyle but it does not leave consumers with a whole lot left over for Birkin bags or regular trips to Barneys.

In addition, the age range of affluent consumers is 45 to 50 years old, so they are sending their kids to college [and therefore] they are also facing the complications of rising college tuitions.

With luxury, nobody needs any of it and that is important for brands to recognize. Luxury brands need to work to get the money.


How do you make the case for luxury goods and services in a world beset with high unemployment and financial meltdown?Well, that is one of the main challenges – putting the luxe back in luxury. This involves figuring out what is the luxe, and what are the promises that luxury brands make to their customers?

Once brands map out the answer to that question, to what consumers are expecting of them, they need to make sure they fulfill these unspoken promises.

For true luxury consumers, it is not about the status, image or the bling of luxury goods.

What luxe people are looking for is the quality.

For example, if I buy a Fendi bag, I know that I have bought a classic item that I will use for the rest of my life. That is a big difference than spending the same money on today’s “it bag.”

For luxury brands, it is really about understanding that the real value of luxury is quality, performance and apprecia-tion of workmanship and materials.

Luxury is about serving the needs of and connecting with

those consumers that value what your brand offers.

What seems to work best to con-vince shoppers to spend or invest in a luxury experience?I think you’ve hit on the right word – the idea is that they are looking at purchas-es as an investment.

That is one the biggest changes I have seen. For affluent consumers, it is no longer about simply spending their money, it is about investing that money in their overall lifestyle.

Even affluent consumers are making calculated investment decisions on how, where and why they are going to spend their money.

Understanding this process and helping consumers in their decision-making process is going to be key for luxury brands. To do this, brands need to focus on the salesperson.

For example, a lot of luxury brands are opening their own captivating luxury boutiques and it has been a boom.

In theory, this is because consumers get a better picture of the brand story and learn more about what makes a particular product so great, as opposed to the service they would find at a department store.

Is the pie of luxury shoppers growing?I would say no, definitely not, and that is what the luxury draught is all about.

In the United States, we have a density of people in the affluent center who are older.

The baby boomers who have the money are getting more mature and their priorities have shifted, so they are no longer focusing on brand names and images.

Add that to the simple loss in numbers between the baby boomers and Gen X, and marketers are left with a shrink-ing pool of available consumers.

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