Late last month HSBC Bank released a case study on the condition of Luxury Brands – lucky for you I read all 106 pages so you don’t have to. Now you can spend more time planning your Coachella experience or sitting at your desk wishing you were going.
“Rise of the Yummy”, written by Erwan Rambourg, Antoine Belge, and Cathy Chao – outlines how Luxury Brands are changing their marketing strategy based on the recent Menaissance of the Yummy. Before we dive deeper into the study, you’re probably asking yourself, “What even is a Yummy?” Yummy is short for Young Urban Male. Remember that overused term from twenty years ago, “metro-sexual”? Yep, that’s the image you should have in your head of a yummy. Everyone remembers the guys who cared more about fashion than the “traditional guy”. They were well groomed, wore nice clothes, and probably smelled like Abercrombie and Fitch Cologne.
Before Yummies arrived the last thirty years, luxury brands followed a strict recipe for success. Advertise to wealthy women because they were the ones buying the most goods. Luxury Brands aren’t changing this tactic because they just feel like it, they’re iterating their strategy in large part due to the age-old adage, “Adapt or die”. The HSBC report outlines two main reasons why Luxury brands are optimistic Yummies will carry them to the promise land filled with Burberry scarves, Tom Ford sunglasses, and Kanye West’s personal line of leather pants.
Premium consumers are getting younger: According to the study this is driven by “Psychological and social trends whereby consumers prefer to display social status earlier on while older, better-off consumers may have less to prove and will tend to buy for themselves rather than to impress others.” Another study produced by Bocconi claims “The majority of luxury consumers in three to five years’ time will be aged between 25 and 30.”
Spending habits: The health of the economies in Asia and the US (thanks Obama?) are putting more money into the pockets of consumers. As their pockets get bigger there is also an increasing trend to stay single longer. Yummies are not saving up for their children’s college funds – they’re spending their paycheck on a $2,795 Parka.
So, it seems like all roads lead to glory for luxury brands, right? Not exactly. HSBC knows not everyone in the luxury space is nimble. In a time when digital marketing is continuing to grow, brands must invest more in social media. HSBC points to Burberry (BRBY) as a great example for the less digitally advanced companies. Burberry has pushed the envelope for luxury brands because they actually value their customer’s voice. Here are a few stats on their social media presence:
- 16,730,000 Facebook followers
- 3.1 million Instagram followers
- 7.2 million pieces of user generated content on Instagram
Burberry is enjoying all the benefits from their ability to separate themselves via social media – just look at their numbers from Q4 where they were the fastest growing luxury brand and experienced a 12% increase in year over year retail sales. It’s obvious this strategy is working. Brands need to continue to invest in activating their customer’s voice, and sharing their customers’ look in order to remain competitive.
Glossy, produced photos are no longer competitive. Consumers want to see how other consumers stylize their look, choose their accessories, and what the culture is behind the “look” they are evaluating. Because of this, forward-thinking brands are investing in Visual Commerce. They are finding their customers social posts and bringing it to their eCommerce experience to drive more engagement, authenticity, and of course, sales. The power of Visual Commerce is palpable. In the blink of an eye, an eCommerce experience without customer photos and videos will seem antiquated and out of touch.
So why wait, learn how you can start taking advantage of Visual Commerce by Requesting a Demo here.