Who decides what we buy online? Well, we do of course. But other people have an influence too. Friends, family, significant others, and celebs (from A-list to Z-list) can all play their part in our final e-buying decisions, as well as how we shop in physical stores.
Which is why influencer marketing is so important and is going to become even more relevant to the luxury and premium brand sectors over the next decade, global influencer marketing platform Traackr and digital marketing agency The Myndset say. They reckon influencer marketing can be a way for smaller brands to compete with the major players.
The reason is that if brands get it right, influencer marketing can be both cost effective and generally effective, reaching the parts other marketing channels can’t reach and at lower cost than those other channels.
Myndset president Minter Dial said: “Luxury market CMOs must re-evaluate and realign budgetary spend around achieving true impact. The measurable benefits of advanced influencer marketing practice are enabling niche luxury clients to compete on a level playing field with major players…[As a result] all luxury brands can achieve compelling ROI and demonstrably increase sales, brand resonance and achieve superior insights into their valued customers.”
So how do Traackr and Myndset reach this conclusion? A recent study by McKinsey and Altagamma Foundation estimates the percentage of luxury sales made online should rise from their current 6% of total luxury sales to 18% in 2025, reaching €70bn.
And influencers are key when consumers shop online. Luxury may have been late to realise this (a decade ago many luxury brands thought online was a bit downmarket and not for them). But as they realise that the future is all about the younger millennial shopper and that this shopper is fully connected, then they’re racing to come up with effective influencer marketing strategies.
Luxury brands have traditionally relied heavily on expensive marketing methods such as glossy print and flashy TV campaigns, as well as creating expensive online brand experiences and spending heavily on creating beautiful stores. But achieving the personalisation, true engagement with and impact on their customers has remained difficult to achieve.
Traackr thinks they’ve been missing a trick lately with “trust [being] largely driven by peers and authoritative content” with only 3% of individuals driving 90% of conversations and impact online.
Luxury and premium brands are, of course, taking notice of this. Traackr cites an Econsultancy report on fashion and beauty. Apparently, 59% of company decision-makers are planning to boost their budgets for this area this year and Myndset research reveals 67% of luxury brands and 60% of premium brands considering digital “important to very important” in understanding their customers.
That’s because digital has been such a huge disruptor for their business. While 11% of non-premium and non-luxury companies say digital is a disruptor, 42% of luxury brands and 28% of premium brands say so.
If you want to know more, the white paper can be downloaded here.