With advancing digital technology, luxury marketing in the Middle East is changing, which is, consequently, changing the way luxury brands engage with consumers. Take, for instance, how luxury brands, such as TAG Heuer, Louis Vuitton and Rolex, are going beyond digital.
While many luxury brands are rushing to embrace digital for fear of missing out, the Internet has, seemingly, created as many challenges for luxury brands as opportunities.
While the Internet has made it easier for luxury brands to reach existing – and attract new – customers, it has also exposed them to a wider online world; one where there is varying degrees of control.
But while digital tools and technologies are revolutionizing the ways luxury brands market themselves, the elephant in the room is that brands, especially in the Middle East region, do not truly understand what does going digital really mean.
One of the key challenges facing luxury brands has been how to effectively communicate their identities through multiple channels to provide seamless brand experiences and connect with their customers, emotionally, without compromising on brand safety.
“With the remarkable growth of the online channel, the role of physical stores will need to change,” maintains the “Luxury Goods Worldwide Market Study, Fall–Winter 2017” report by Bain & Company.
“Stores haven’t lost their purpose, but brands need to reinvent them to better engage with customers, in a way that transcends channels. Stores will have to pivot from a transactional role to become venues for a broader range of customer interactions,” it adds.
The main growth engine of the luxury market is a generational shift, with 85% of luxury growth in 2017 fueled by Generations Y and Z, Bain & Company report says.
In the Middle East, luxury brand positioning has become all the more difficult due to the regional tough geopolitical and economic environment and this is aptly reflected in the softening luxury market.
For the first time in a decade, luxury brands, which were flying high as the wealthy thrived, are finding themselves in a pretty rough spot, as sales in the region witnessed a significant softening over the past couple of years.
So how should luxury brands effectively market and reach their customers today? How should they reinforce their brand images and establish relationships with customers, while at the same time effectively bring their brand identity to the masses?
From online to experience
A white paper ‘Luxury in the GCC: Age of Digitalisation?’ by Chalhoub Group, one of the leading players in the Middle East luxury retail observes, “the GCC luxury players have to devise and implement long-term, comprehensive and genuine digital strategies in order to remain relevant.”
Luxury brands and marketers today need to look for new ways of not just reaching out to their consumers, but also keep their ‘niche’ brand positioning intact.
This need is pushing luxury brands to redefine what they deliver to customers, and how they deliver it. This is where brand activation and content amplification are increasingly assuming significance.
Today, customers don’t just want to feel the product; they want to feel inspired and be part of the brand experience.
The questions, therefore, that is confronting every luxury brand is: how can you provide a new experience to the high-heeled consumer without losing out on the ‘exclusivity’ value? How can brands bring experiential luxury before consumers that will leave them wanting more?
And while digital is certainly one answer, it’s not the only answer.
While digital is growing in importance, it also necessitates integrating digital and offline marketing campaigns to bring the experiential element and optimize customer reach.
Content beyond product
There are many examples of how luxury brands are going beyond digital and are not only identifying themselves with their consumers’ persona, but also targeting their content that directly appeals to their customers’ emotions.
Take, for instance, the ‘City Guides’ apps launched by Louis Vuitton, that provide useful information on hotels, restaurants, cultural districts and night life for many global cities.
Introduced q couple of years before, the app, which also brings travelers an interactive experience, was included on the Apple App Store’s “Best of 2016” list. The app can send digital post cards too, or share addresses by email, text message and social network posts.
The apps offer more than 15,000 addresses in 29 countries. While some of the city guides are free, for the rest, one is likely to pay about $10.
Rolex is another example. A brand that claims to cater to the aggressive and adventurous consumer has drafted its marketing strategy reflecting these virtues.
As a symbol of luxury and prestige, for more than 100 years, Rolex has kept on transforming the experience of a timeless masterpiece from one generation to another, while still highlight heritage and history.
A related emerging trend of this 360-degree marketing strategy is that more and more luxury brands are engaging with some of the world’s leading brands and media companies to give consumers an overarching experience.
In 2016, in the US, Ford went beyond a typical sponsorship relationship and became an official National Football League sponsor with its truck line.
The idea behind teaming-up with NFL, according to Ford, was this “it was drawn by the toughness of the NFL, which it believes are underscored by its trucks.”
According to media reports, as part of the sponsorship, the partnership was about Ford creating a fleet of F-Series Super Duty pickups for game tailgate parties, making the pickups available on game days to ferry potential customers, and holding a contest to give away tickets to the Super Bowl.
Case in point 1: TAG Heuer
Another well-executed example, specifically related to the Middle East, of how luxury brands are keeping emotion at the centre of their story and creating content that goes beyond the product, is the recent collaboration between TAG Heuer and arab luxury world (alw), the conference on the business of luxury in the Middle East, GMR’s sister media, that was held in Dubai in May.
TAG Heuer partnered with alw’s Global Start-up Bootcamp, which saw young entrepreneurs successfully driving digital transformation.
A one-of-its-kind event in the region, the Bootcamp provided a sustainable business development platform for start-up founders, VC firms and corporate conglomerates in luxury, retail, fashion, art and lifestyle, and technology sectors.
“We partnered with ‘Global Startup Bootcamp’ (part of the alw 2018), as it coincides well with TAG Heuer’s core philosophy of being a pioneer in innovation and in everything that we do,” says Anne-Claire Richomme Bergoffen, Marketing & Communication Manager, TAG Heuer Middle East.
“TAG Heuer, the Swiss avant-garde watchmaker stands for innovation and disruption from its product design to its communication in each of its pillars: sport, lifestyle and heritage. Don’t Crack Under Pressure, the company’s mantra, fits its collaboration with the Global Start-up Bootcamp perfectly, supporting risk-taking projects with a mind-set of openness and respect for consumers,” she told GMR, AMEInfo’s sister publication.
This is not the first time that TAG Heuer associated itself with an event that matches with its core philosophy.
The luxury watch brand has long been partnering with regional and international events, such as major football leagues and motor racing that strike the right chord with the young generation.
Apart from connecting with the youth and younger generations, TAG Heuer has kept relationships with its loyal customers as well that have been connected to the brand for many years.
For instance, the brand recently brought to the Middle East initiatives such as Museum in Motion, an exhibition of heritage timepieces celebrating the 55th anniversary of TAG Heuer Carrera collection.
“Those types of initiatives allow us to meet and connect with regional TAG Heuer collectors and fans of the brand,” Anne-Claire Richomme Bergoffen, Marketing & Communication Manager, TAG Heuer Middle East.
“Two years ago when we developed and executed campaigns, we used to focus more on the traditional media. Now, we are making more and more use of digital to target the new generation. Another way we have developed to connect with the modern consumer is to invest a lot into events,” she says, adding, “Apart from this, we have done pop-up activations in the malls in the UAE and the region.” (see detailed interview at https://www.ameinfo.com/media-and-marketing/marketing/tag-heuer-its-time-to-connect/)
Case in point 2: Bulgari
Another instance of how luxury brands are using multi-channel technology as a tool to connect with customers and deliver experience is the recent collaboration between Bulgari and the fashion and beauty media Haya, a sister publication of GMR.
The 360-degree campaign focused on delivering an ‘experience’ to anyone wanting to experience Bulgari’s product – across digital and social channels. The idea was to deliver an experience that was relatable and yet aspirational. Enter Lebanese TV host Wissam Breidy and Tunisian model Rym Saidi.Breidy and Saidi came in expecting a photo shoot. What they got was a preview of their own wedding, which was scheduled to take place just a few days later.
Case in point 3: Tiffany & Chanel
Another instance of how luxury brands are emphasizing on integrating of the online and offline world and creating an experience was the video shoots executed by Buro 24/7 (leading publication on fashion, culture, beauty, media, lifestyle, and events) and sponsored by Tiffany.
The video showcased the latest Tiffany collections. Marie Claire and Haya publications did a similar partnership with Tiffany, making fashion videos, showcasing latest products from Chanel and Bulgari.
Summing up, with the remarkable growth of the online channel, the role of luxury brands is changing. Brands need to reinvent them to better engage with customers, while at the same time have to use multi, not only digital, channel to create and deliver the unique experience to customers.
SEE DETAILED INTERVIEW OF Anne-Claire Richomme Bergoffen, Marketing & Communication Manager, TAG Heuer Middle East here