Luxury Institute News

February 9, 2016

Using digital to connect luxury shoppers with luxury brands

Luxury Daily
By: James Green
February 9, 2016

Every industry has been disrupted by technology and pushed to evolve their marketing strategy. In some ways, luxury advertisers have embraced the digital revolution and found new methods of improving the customer and user experience. But a large number of luxury marketing spend is still happening offline, despite the brand opportunities that are now available online.

There seems to be a common understanding among luxury brands that high-priced items are not going to thrive online and that using an ecommerce platform may even devalue products. True or not, direct sales are not the only way to get value out of the digital world.

Net net
Most luxury brands have a very specific target audience, typically affluent individuals. Therefore, luxury brands have traditionally bought digital media within specific owners such as The New York Times, Bloomberg and The Wall Street Journal because they feel that it is the best way they can safely find their audience online.

But what about all the people signaling their intent to buy luxury items across the Greater Internet? How do brands effectively reach out them?

Research from Epsilon and The Luxury Institute shows that 98 percent of luxury shoppers use the Internet regularly.

In addition, more than 50 percent of the time they are online, they are researching products and comparing prices on their mobile devices.

Throughout the years, studies from Google and McKinsey have shown that people spend a good amount of time researching luxury or high cost goods online before making their purchase.

And most likely, the number of times people visit a store to browse and conduct research has diminished because of the availability of information online.

With all this data about people, including demographic and information about brand affinity, along with precise data related to what people are searching for or what items they have recently purchased, there is a tremendous opportunity to use digital to identify luxury shoppers, provide them with immersive experiences and forge stronger customer relationships.

Researching signals purchase intent
Data offers established brands the opportunity to get in front of in-market buyers, including new customers and previous buyers.

Consider the amount of research that takes place before making a luxury purchase, whether that is a new car, piece of jewelry, handbag or high-end vacation.

According to WBR Digital, 45 percent of luxury purchases are influenced by what consumers find online.

The benefit of digital is that you can depict who is actually looking for information about your product and use that trail of data to determine intent to purchase.

For the luxury category, these insights will help brands determine who is ready to make a purchase and allow you to predict which people to keep informed about brand updates, such as new products, sales and seasonal marketing promotions.

Intent-based targeting is a strong complement to more traditional brand-centric media buying and helps luxury brands zero in on the people who are more likely to buy their products. It is also a great way to help them move through the buying journey, either in-store or online.

Enticing luxury buyers with digital creative
Luxury shoppers are very much part of the digital nation. They are using laptops, tablets and smartphones to follow trends, connect with brands, research products and make purchases.

Digital creative is critical to the luxury shopper – it needs to drive awareness without jeopardizing brand integrity and exclusivity.

Digital platforms have transformed their environments into creative canvasses for luxury brands. We have seen this through beautifully produced digital videos, immersive creative experiences and native advertising taking place across mobile devices and platforms such as Instagram and Facebook.

There is enough creative stability in digital for luxury buyers to bring their brand to life and to do so amongst the people who are most likely to buy. The dynamic characteristics of digital also allow brands to feature more products and change up creative more easily than television or print ads.

Forging lasting relationships online
People do not have to visit a store for you to know when and how interact to with them.

Online interactions between consumers and brands inform content, marketing frequency and promotions at the individual level, which can help increase customer loyalty and brand awareness.

Loyalty can be accelerated through social, email and digital display advertising at any point within the customer’s lifetime, and data can help predict these optimal moments.

This means that you need to be constantly learning and adapting to what people want so that your brand remains relevant and generates the engagement and desired response. There is simply way too much insight and value rooted in the digital medium for brands not to invest in it.

DIGITAL MARKETING may appear to be about data and targeting, but it is more about customer interaction, immersive experiences and interactive communication.

The luxury experience is more likely to stay very much in-store focused in the next few years. But this might be able to change once luxury advertisers find a way to prolong the experience that they are providing in-store across digital channels.

Data, adaptability and device versatility makes digital a strong brand vehicle for the luxury category.


June 16, 2014

US Internet advertising revenues jump 19pc in Q1: report

By: Joe MacCarthy
Luxury Daily
June 13, 2014

Brands continue to up their digital advertising budgets, according to the Interactive Advertising Bureau.

Internet ad revenues reached $11.6 billion in the first quarter of 2014, compared to $9.6 billion from the year-ago period. While the sharp rise is not all that surprising, the increasingly effective nature of digital ads indicates that revenues will keep climbing at double digit intervals.

“Digital advertising is so much more targeted,” said Milton Pedraza, CEO of The Luxury Institute, New York. “You can now target people so much more finely than you could a few years ago.

“Relatively speaking, the cost is very competitive,” he said. “There’s a tremendous amount of online media that you can tap into.

“It’s just a revolution, a transformation, in advertising.”

Mr. Pedraza is not affiliated with the IAB, but agreed to comment as an industry expert.

The Interactive Advertising Burea was unable to comment. The IAB is comprised of more than 600 media and technology companies that account for selling 86 percent of online advertising in the United States.

Spending spree
Consumers are increasingly dependent on their smartphones, which gives marketers countless opportunities to reach them throughout their daily routines.

Also, since brands continually engage with consumers through social media and other platforms, they can expect a high level of campaign recognition when targeting ads.

Many luxury brands are finding interesting ways to increase click-throughs and post-ad engagement.

For instance, Jaguar of North America leveraged its ongoing British Villains campaign with mobile advertisements on The New York Times, The Wall Street Journal and other publications.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute:

February 24, 2014

Oscars red carpet: a runway of sharp elbows and high fashion stakes

By Piya Sinha-Roy
February 23, 2014

When Jennifer Lawrence tripped on her way to accept her best actress Oscar last year, her blush pink princess-like Dior Haute Couture gown was captured in all its glory as the unscripted moment made ripples around the world.

That bonus air-time for a single dress at one of the world’s premier global events is priceless for the likes of Dior, one of the strongest fashion houses in the cutthroat marketplace that the Oscars red carpet is today.

Success on the red carpet can buy cachet that no advertising can – both for designers and stars – and profits for luxury brands for years to come. With stakes that high, the more established houses are raising their game and leaving little room for newcomers to make a splash, like they might have a decade ago.

Click the link to read the entire article which includes quotes from Milton Pedraza, CEO of Luxury Institute:

February 19, 2014

Jaguar takes over New York subway trains with Good to be Bad promotion

By Joe McCarthy
Luxury Daily
February 18, 2013

Jaguar Land Rover North America is targeting New York subway commuters with train takeover promotions for its Good to be Bad campaign.

The Good to be Bad campaign officially debuted during the Super Bowl Feb. 2, which makes it safe to assume that many of the commuters will recognize the slogan. Since one of the chief aims of the multichannel effort is to reposition the brand’s image, the venue will serve the purpose of attracting and holding the attention of significant numbers of consumers.

“As a general concept I would say that some of Jaguar’s target market goes on the subway, so I don’t think it’s illegitimate, but I do think that there are probably better places to spend your money,” said Milton Pedraza, CEO of The Luxury Institute, New York.

“Unless they just wanted to have us talk about the campaign, which we’re doing, then in that sense it becomes the antithesis of what someone might expect,” he said.

“When you get consumers to talk about the benefits of the brand, then you’re talking about relevant and reliable and positive awareness. When you just create a mild controversy, you’re going to get a mixed crowd.”

Mr. Pedraza is not affiliated with Jaguar, but agreed to comment as an industry expert.

Jaguar did not respond by press deadline.

Step inside
New York’s F Train travels from deep in Queens through Manhattan and down to Coney Island, Brooklyn. The F Train travels through the third busiest subway stop, Herald Square 34th Street, according to the Metropolitan Transportation Authority.

Another attractive aspect of the F train for marketers is that it spends much of its time above ground.

The E train also experienced a Jaguar makeover, and this train travels through Times Square, the busiest stop in the system.

Overall, New York has the seventh busiest subway system in the world with an annual ridership of 1.665 billion.

What this means is that colossal amounts of people will see Jaguar’s promotion and perfunctorily register the message, especially since, in comparison, the other train exteriors will be far less spiffy.

However, the percentage of commuters who will be moved to buy a Jaguar is likely insignificant.

The brand’s intention may be to change the public’s perception rather than stimulate sales.

The “Good to be Bad” campaign centers on the idea that “British Villains” dominate Hollywood.

Sir Ben Kingsley, Tom Hiddleton and Mark Strong were tapped to play villains that muse on what makes British actors so attractive for villainous role. The subtext of the television spot is that the only car suited for these figures is the new F-Type.

Jaguar will likely extend this campaign for several months.

We will be moving shortly
Although it is hard to measure the direct impact of out of home advertising on sales, the medium attracts attention if positioned effectively.

Other luxury brands regularly turn to heavily trafficked transportation venues for outdoor advertising.

For instance, Swiss watchmaker Breguet took over the departures concourse of Geneva International Airport with an exhibit featuring its high-tech watches, the Type XXII 3880 and the Classique Chronométrie 7727.

Breguet’s exhibit, which ran in January, focused on the brand’s technical innovation in watch design and manufacturing along with the brand’s history with aviation. This exhibit drew attention because of its size, and Breguet was able to increase brand awareness among travelers, who are a captive audience.

Also, LVMH Moët Hennessy Louis Vuitton eyed affluent travelers by placing brand advertisements on large digital screens at John F. Kennedy International Airport in New York.

The screens displayed images from a number of LVMH brands including Christian Dior, Donna Karan, Marc Jacobs, Bulgari, TAG Heuer, Hennessy, Parfums Givenchy and Louis Vuitton.

Since the general reaction to an outdoor ad is unpredictable, brands must ensure that they unequivocally reflect key values.

“Usually, what I like to do is to create a campaign that talks about the benefits of the campaign,” Mr. Pedraza said.