Luxury brands still shy about digital marketing despite growth
14/11/2011
“This compares to a growth rate of 9.8% observed in 2010, and is being driven by strong spending on luxury goods across all global markets,” explained Ruta Perveneckaite, retail analyst at Verdict, on releasing the report.
Europe has remained the largest region for luxury goods consumption and is set to retain this position until 2015, accorging to verdict, despite its relative share continuously declining due to rapid growth in the emerging markets of Asia Pacific.
During 2010, Asia Pacific excluding Japan overtook the Americas for the first time as the second largest luxury goods market after Europe, and the region is now on course to account for 26.8% of the market in 2011. While Asia Pacific growth is particularly driven by China, which is poised to become the largest single global luxury market, new demand from other countries in the region, including South Korea, Taiwan, and to a lesser extent India, is also responsible for the strong performance.
While luxury goods players are investing heavily in these growth markets, there are other opportunities emerging for which they appear less well prepared, such as luxury e-commerce and digital marketing.
“Initially, luxury houses were sceptical about launching transactional websites, but now the great majority of luxury players have at least a limited online offer,” said Ms Perveneckaite. “However, there remains much confusion in the luxury goods sector surrounding how to guarantee a premium service online and there is a distinct reluctance to engage customers through digital marketing and mobile platforms.
“Too often luxury houses adopt practices which are common to the high street, missing the opportunity to use the new channel to further differentiate themselves as luxury retailers and, most importantly, strengthen their brand image and justify premium pricing. The launch of an attractive website and secure payment processes does not equate to a luxury experience; it requires excellent customer support, top-quality presentation of goods, and more delivery options to satisfy its time-pressured clientele.”
Other main findings of the report included the prediction that spending on branded luxury goods is forecast to increase by nearly 65% between 2010 and 2015, and the contention that accessories are the key product category in the luxury sector and will be the fastest growing category to 2013.
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