The Power Of Brand: From Luxury Brand As A Century Old Brand In The Process Of Digital Transformation

More than a decade ago, the luxury industry held back from "coming online" to do business“ Bruno Pavlovsky, fashion director of Chanel brand, even publicly called e-commerce "cold screen", believing that only in physical stores can luxury customers experience real high-level service.

Today, things are very different.

Most luxury brands have entered the e-commerce platform and opened online flagship stores; In order to promote the development of digital strategy, gucci cooperates with Tencent to stimulate the potential of Internet of things, artificial intelligence, data science, digital thinking and other fields; Dior not only has public account and gift card programs in wechat, but also places H5 advertisements in the circle of friends every holiday; LV in the small red book test water, live with goods; With the game as the carrier, LV, burberry and Gucci all entered the NFT.

What the public can see most directly is the digitization of marketing links. For example, in July this year, coach took shuoyin e-commerce as a channel of limited fashion products in mainland China, and also an online store of Coach & bape series. This year, SK-II and Jingdong jointly built an online virtual city SK-II City, bringing online immersion experience to consumers

Luxury brands are vigorously expanding in the digital frontier, as if they have forgotten how indifferent or even contradictory their attitude before. Why has luxury brand's attitude towards digitalization experienced such a huge change from conventional to positive? What kind of course has luxury brands gone through in this process? If only from the perspective of marketing, what is the power of luxury brands today?

From rejecting "online" to multi platform water testing

The pressure of growth is the main driving force for luxury brands to start marketing digital transformation.

Since 2014, the growth of luxury brands has become increasingly weak. According to the data of Zhiyan consulting, from 2010 to 2013, the growth rate of global personal luxury market scale exceeded 5%, but since 2014, the data began to decline gradually, until 2016, it was almost zero growth.

For such a serious survival problem, Deloitte's "global luxury power" annual report clearly gives the solution: the millennials have become the leading consumer group, and more than 58% of the millennials are accustomed to learning about luxury brand information through Internet channels. Therefore, if luxury brands want to regain their vitality and grasp the influence factors of purchasing habits and consumption behavior of millennials, everything must start from coming online.

The once conventional luxury brands are enlightened.

In 2015, Chanel * * entered the luxury e-commerce net-a-porter to sell high-end jewelry series. In 2016, it officially launched a global e-commerce channel. In 2018, gucci adjusted its organizational structure and added a digital business and innovation (digital business and innovation) department to focus on e-commerce, consumer insight and digital transformation business.

The digital transformation of luxury goods has started in a huge way. As an important driving market for growth, the digital marketing of luxury brands in China has presented a unique exploration process.

As early as 2012, coach, a luxury brand, had a month's water trial cooperation with tmall, and then closed the store in a hurry. In April 2014, burberry entered the tmall online mall, becoming the first luxury brand to open in China's mainstream e-commerce channels. However, due to poor sales data, burberry soon closed its tmall flagship store.

In the early stage, a little bit of carelessness will retract the pace of exploration. It is not difficult to see that luxury brands are actually "carrying the shelf" to test e-commerce for a short time.

Until 2016, luxury brands finally decided to enter the e-commerce platform and seek new growth space. This opportunity comes from the ever-changing consumer behavior in the Chinese market. According to Bain consulting data, the scale of luxury goods market in mainland China decreased by 2% year-on-year in 2015. One of the reasons behind this is the rise of cross-border e-commerce and overseas shopping websites.

In 2017, the curtain of luxury brands entering China's e-commerce channel officially opened. Tmall luxury products specially opened luxury Pavilion, which completely dispelled the luxury brands' concerns about brand image damage. In this way, tmall welcomed 17 luxury brands, including Burberry, mystery of sea blue, Maserati and Jiaolan. In 2018, cognac brand Hennessy also settled in Jingdong.

At the same time, at this stage, wechat applet is also going hand in hand with traditional e-commerce.

In 2017, Longchamp announced strategic cooperation with wechat, and Gucci officially launched wechat applet. However, different from Jingdong and tmall, the attitude of luxury brands towards small programs is mostly for brand display. Many luxury apps only include limited time experience store, new product release, event booking, game interaction and other functions. For example, burberry did not sell any single product after it launched the wechat app in 2017, but helped online customers flow to offline stores.

Coming to the e-commerce platform is the first step taken by luxury brands. On this basis, the pace of brands is gradually accelerated. It is obviously faster to accept small programs focusing on brand exposure than to accept e-commerce. According to the statistics of fashion headlines, in 2018, nearly 50 luxury brands opened small programs, and 10 luxury brands set up special limited time experience stores on the Chinese Valentine's day.

With the preliminary layout, the tentacles of luxury brands naturally began to further extend to the social platform which contains rich content and gathered a large number of young users.

At first, luxury brands try to find the expression of young users' favorite in the mainstream social platform by introducing the brand culture gene and concept with a tentative attitude.

A typical case is that in 2018, Dior asked Li Wenxuan, an online celebrity, to shoot a "shop video" to promote saddle bags. Although this video is commented by netizens as "a little bit of Taobao's popular style" because of the big gap between the traditional style and the brand, it clearly reflects the determination of luxury brands to change and communicate in the way young people like.

With the rapid rise of "flow harvester" short video, the shaking tone with entertainment and star elements has become the focus. In July 2018, chanel and Montblanc ads were launched successively in the good impression blog of Twitter account; Dior also took the lead in the official promotion of tremolo, and angelababy also released the promotion video of Dior handbag on the shaking tone platform to attract the brand; At the end of the year, LV launched the first open screen and information flow advertisement in Shuo Yin.

In addition to traffic as the primary consideration, more content platforms with "female grass planting" and "shopping sharing" are also in the scope of luxury brands' attention. For example, small red book users are mainly female, young, strong consumption ability and high consumption intention, which is a unique customer value that other platforms are hard to have. Therefore, LV, Gucci and Dior have all entered xiaohongshu in recent years.

From the traditional e-commerce platform to wechat ecological and social content platform, from the perspective of luxury brands, each channel can play a different role.

For example, in small red books with both graphics and video, luxury brands tend to play brands; However, in the case of higher traffic volume, luxury brands hope that they can bring more traffic to the stores on the e-commerce platform, so as to promote transformation. Of course, the practice of performing their own duties can also enable luxury brands to make good use of the content matrix with high quality and efficiency. Under the combination of multiple communication channels, brands can interact with multiple scenes, penetrate users' minds with various dimensions, and enlarge the marketing effect as much as possible.

Of course, there is still a gap between "being able to do it" and "actually doing it". Shuo Yin and xiaohongshu have obvious marketing advantages, but the bold entry of luxury goods has not produced a particularly strong response. From the perspective of shaking tone, most of the videos released by Dior were product videos and spokesperson advertisements. After 13 short videos were released, only 33000 fans were obtained; Most of the 108 Notes published by LV in xiaohongshu are brand advertisements with only 130000 fans. Behind this, it may also be because luxury brands have not really used the interaction and social play of little red book and tremolo.

Live broadcast, private domain, new retail

Before 2020, luxury brands began to change under the pressure of growth, and the black swan incident of the epidemic directly became the "speeder" of its digital transformation road.

Online channel has become an important export of luxury brands, luxury brands follow up the pace of digital marketing is also further accelerated.

The most intuitive manifestation of the acceleration of speed is the "acceptance" of live broadcast by luxury brands. In 2020, Bottega Veneta will launch 230 handbags in Li Jiaqi's live broadcasting room, which will be sold out as soon as they are put on the shelves. LV and Tiffany have also started live broadcasting and carrying goods in xiaohongshu. Luxury cosmetics with relatively low customer price have become frequent customers of Li Jiaqi's live room.

According to the Research Report of China Merchants Securities, the total Gmv of direct broadcast e-commerce will exceed 300 billion yuan in 2019, which is expected to impact trillion yuan in the future. While attracting platforms such as xiaohongshu, shuoyin and Kuaishou, it has also been appreciated by luxury brands. In addition, immersive, real-time, strong interaction of live media, also let the offline sales of luxury brands hindered to find a new way of "emergency".

Because luxury brands are forced to suspend their offline shows every year, cloud live broadcasting will become a widely used way of playing for luxury brands in 2020. In February, the Italian national fashion chamber of Commerce joined hands with Tencent video and Tencent fashion to create a new "cloud show" mode. Brands such as Gucci, Fendi, Giorgio Armani and other brands have accumulated more than 30 shows. The videos of Tencent have been continuously broadcast live. LV, Hermes, chanel and other brands also moved the stage of Milan fashion week to Tencent video.

Maybe it's a bit of a setback. Luxury brands understand that it's easy for luxury brands to miss the bonus period of the platform and fall into a passive situation when they used to be the latecomers of shaking tone, station B and even traditional e-commerce. Therefore, different from the relatively rigid and exploratory attitude towards various channels in the past, luxury brands are willing to become the pioneers of emerging channels. For example, since the beginning of 2020, brands such as Prada, Dior and Burberry can't wait to settle in wechat video numbers that have just opened the internal test, becoming the first batch of content producers.

This attitude is undoubtedly progressive for luxury goods. At the same time, the connection between wechat ecology and the concept of "private domain" clearly reflects the pattern that luxury brands are totally focusing on traditional e-commerce platforms when they are trying to jump out of the line, and enhance their refined operation capabilities by strengthening their private domain capabilities.

The reason behind this is not hard to understand. In the case that the growth of Internet users has almost stagnated, intensive work on the platform with private domain is to attract more users to enter the private domain and become loyal fans of the brand, so that the brand can further and continuously tap the value of existing users.

At this time, the focus of digital marketing is also reflected in the user-centered operation ability.

For example, since 2021, LV and baogeli have settled in Jingdong applet; In wechat, where the capabilities of small programs have been relatively mature, Givenchy and Bulgari continue to explore the community-based operation methods within the small program. In Givenchy applet, users can upload their own product experience and interact with users in the community; In the Burberry applet, users can mark their ideal offline punch in place by liking the collection.

The advantages of multi-channel private domain are self-evident. In addition to the old saying of collaborative cooperation, in today's increasingly strict data privacy, it is more difficult for each contact point and platform to connect data. Luxury brands need to penetrate multiple platforms, and generate more targeted marketing strategies according to the tonality of different platforms and user portraits of different platforms, This is also a necessary skill for luxury goods to survive and grow in the age of stock and data privacy.

In addition, although the main position of digital marketing transformation is online, luxury brands are naturally associated with the keyword "new retail" in the online and offline channels of Unicom.

In fact, luxury brands have opened the door to new retail when they come to the online e-commerce platform. But luxury has its own uniqueness: offline physical stores are the essence of the brand's "luxury and high-end" tonality, and also the key to obtain consumer identity and sense of substitution. Therefore, the transformation of digital makes luxury brands reflect a lot offline, and how to better connect online and offline is also the focus.

The operation of offline physical stores involves many projects and links, such as store design, sales staff configuration, customer relationship maintenance, digital upgrade of tools, etc. But on the whole, we should take consumers as the core, and let different functional teams cooperate with each other to achieve cost reduction and efficiency increase through the use of data and technical means.

Therefore, at the marketing level, it is mainly to upgrade the consumer experience with innovative technologies and forms. According to the incomplete statistics of iridium cloud business, in just three months of 2021, 55 luxury flash stores will be opened in high-end shopping centers such as Beijing SKP and Shanghai IFC shopping mall. In particular, these offline flash stores are not simple commodity display, but a combination of cross-border cooperation, festival marketing and other means.

For example, Hermes built the world's first flash gym herm è sfit, Fendi launched a limited time coffee shop, etc., including fitness and catering business. In order to commemorate the 100th anniversary of the birth of perfume No.

More and more abundant offline scenes enable luxury brands to create different consumer experiences and create more perfect space for brand image and brand concept.

While continuously strengthening the offline scene, luxury also tries to connect the online and offline channels to develop a more comprehensive marketing value. For example, luxury brands will actively connect online channels to promote offline flash stores, and exquisite offline scenes also have a high "mapping rate", attracting users to actively spread online. In this way, luxury brands can learn from each other's strengths, integrate the marketing advantages of different channels, and provide brand marketing with a broader way to play. At the same time, optimize the online customer acquisition cost of high enterprises, and further optimize the brand and effect.

Luxury brands used to be the underachievers of digitalization. However, compared with many other industries and brands, the digital transformation of luxury brands has been much earlier and more comprehensive after integrating into digital channels according to brand tonality. Luxury brand is also a typical one hundred year old brand. Digital transformation is the transformation process of its own innovation, but it can also inspire more brands who do not know how to start with younger and digital.