Will 2016 be the ‘Year of Digital Focus’ for Luxury Brands?

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Earlier this month, luxury brands group LVMH hired Ian Rogers of Apple to lead its digital strategy.  This news sent waves through Silicon Valley, showing that luxury brands are starting to take their digital proposition seriously.

Not only does this mean that the authority in online music is turning his back on the world’s most prestigious tech brand -he is also going against the current trend of luxury executives moving to digital businesses.  Rogers move has reversed the direction of talent flow, with LVMH’s appointment suggesting that this year, the luxury sector is finally getting serious about digital.  But what can a heritage luxury group expect from someone who is associated with music & entertainment?

For years, luxury brands have been aware of the potential dangers of bringing their product to market across digital channels.  Many luxury brands veer away from ‘chasing the dollar’, and instead offer unparalleled customer experiences – which are difficult to get right online.  

Luca Solca, Head of Luxury Goods at Exane BNP Paribas even voiced his concern with luxury brands lack of digital focus, “Saying that an overwhelming portion of growth will come from digital is a wild underestimate,” writing in a recent report.  “A more accurate statement is that the whole luxury industry is finally morphing into ‘something new’ – the same way as, for example, financial services and travel did a long time ago.”

This renewed digital focus makes sense, with the modern luxury consumer changing drastically from their days of lavishly lunching and boutique browsing.  They’re now time-poor, career driven professionals with a global mindset and lifestyle – and they’re completely comfortable with purchasing goods online.

However, Solca argues that solely measuring eCommerce performance underestimates digital as a marketing & brand tool.  “Separating digital and physical luxury will make no sense,” Solca states.  “Digital execution will define success or failure for luxury brands.”

The modern luxury consumer doesn’t distinguish between their online and offline behaviour, and they are the most digitally savvy consumers in the world.  They expect the same level of service and convenience that they get from digital-only players, from that of all legacy luxury brands.  With this in mind, LVMH’s new hire starts to make a lot of sense.  Group Managing Director, Antonio Belloni says that hiring Rogers marks an inflection point in the group’s embrace of digital.  He believes he needs Rogers’ ‘flair’ for innovation to help push the luxury group further.

“He is there to take us to the next level,” says Belloni.  “He has built a career with the best in the industry and he has shown a great deal of innovation in that industry.”  “Digital puts a burden on our service in-store to really raise the bar,” he says. “I love my online banking experience on Sunday morning more than the drag of going to the branch; stores need to become more like moments of magic, beautiful and extraordinary experiences.”

By Joe Davine