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Get ready for luxury peak season

The busiest three months of the year for luxury and premium brands are October to December. Particularly in the West, this is when customers are more willing to spend money on high-quality, luxurious items, whether for themselves or their loved ones. What were once local events like Singles’ Day in China and Black Friday in North America have, in the last 15 years, become globalised shopping blowouts which contribute significantly to retailers’ annual revenues.

Brands need to prepare to capitalise on these special days and throughout the quarter and beyond. In this article, we cover:

• Revenue-raising opportunities in Q4 and beyond
• Why some brands pause their marketing during peak times.
• Getting your brand and marketing team ready for Q4

Luxury peak season is more than just Black Friday

Having worked with luxury brands for over ten years now managing their pay-per-click campaigns, the importance of Q4 can be seen in some of our client’s figures last year:

• London fashion designer and retailer: 29% of annual revenues derived from Q4 PPC campaigns
• Luxury tea, coffee and cocoa blender: 61% of its UK PPC revenue in Q4
• Luxury perfume house: 48% of its UK PPC revenue in Q4

Understandably, brands prepare most for the following events:

• Singles’ Day (11th Nov): Singles’ Day is an increasingly global event where people treat themselves to luxury items. High-end brands tend to offer exclusive releases or limited-time offers to drive sales and achieve higher market share.
• ‘Fake Friday’ (17th Nov): A “warm-up” to Black Friday, retailers offer “sneak peaks” at the types of deals they’ll offer on the big day. Luxury brands have used ‘Fake Friday’ but eschewed the “cheap deals” approach, instead focusing on adding exclusivity to the deals they promote with invite-only events or early access for loyal customers.
• Black Friday (24th Nov): Starting in America and making its way to Europe in the early 2010s, Black Friday is now truly global. Many luxury brands discount on those days but not to the same degree as non-premium brands, offering customers extra value through bundling and providing complimentary services instead.
• Cyber Monday (27th Nov): The online version of Black Friday follows a few days later.

In our experience, while it’s a good idea to focus on these days, luxury brands need to do more and think of Q4 as a 3-month long event, rather than a period in which many “deal days” fall. 

From October onwards, we advise brands to start prospecting their audiences early. Doing so offers a way to place their brand top of mind as consumers begin to research the types of presents they want to buy for themselves and their loved ones.

From the start of October up until just after Single’s Day, luxury brands do well on Pinterest and TikTok and with gift guides and programmatic deals. We encourage clients to increase their generic spend at this time to increase their share-of-voice and to take advantage of lower CPMs.

November is Peak Month, and we’ve noticed from the campaigns we’ve carried out in previous years that luxury consumers aren’t waiting for Black Friday anymore to make a purchase. A good way to decide which products to promote on Black Friday is to monitor which products are in particular demand on ‘Fake Friday’ and during ‘peak week’ (the week that includes Black Friday) itself.

Where luxury brands differ from non-premium brands is that, while Black Friday is important, sales aren’t always much higher than during other periods in the peak period. As this is the case, we tend to advise clients to promote their products as gifting opportunities throughout the peak period rather than tying them to big shopping days.

Getting your online shopping proposition right to take full advantage of sales opportunities before the Xmas delivery cut-off (13th-22nd Dec) requires careful planning. Brands need to ensure that these dates are clearly communicated and have the stock necessary to meet demand. For brands with retail outlets or partners, inform customers of any in-store collection opportunities you offer to extend the cut-off window until Christmas Eve.

Although men and women shop in roughly equal numbers during this period, men generally spend more, a factor that we recommend influences your approach to demographic PPC and social advertising.

From the 26^th of December onwards, Boxing Day and New Year/Winter Sales also present an opportunity for brands to continue sales momentum into early Q1. Facebook itself terms this period as “Q5” because consumers spend more time on social media between Christmas and New Year, they have a higher buying intent and advertising costs are lower. 

Why some brands pause their marketing during peak times 

Despite the opportunities offered by the winter holiday shopping season, many luxury brands choose not to participate.

Key reasons behind this include:

• Discounting: Many brands fear this will damage their reputation and undermine the price points consumers are used to paying.
• Discontinued items: Offering products for sale at a discount that are due to be discontinued can create the perception of a brand losing its exclusivity and luxury status.
• Sustainability: Given the importance of ESG-related issues to younger luxury consumers, a desire not to be associated with fast fashion is understandable.
• Higher costs: CPM and CPC rates are higher during peak season.

Clients have expressed these concerns before and, when asked for our opinion, we share this with them.

We agree that discounting is a major concern, especially the risk of upsetting customers who have bought at a higher price in the days and weeks before a discount was applied. Rather than lower the price, we recommend focusing on how special a particular product will be as a gift to a loved one while keeping as close to standard pricing as possible. In essence, you’re making this a “thoughtful purchase” in contrast to the “thoughtless purchases” that often typify gift-buying in Q4.

Likewise, target enthusiasts and brand loyalists who may be willing to stretch their budgets to treat themselves at this time of year. Instead of discounting on price, bundle an item together with an extra product for a limited time. These short-duration campaigns ensure brands retain control over consumer perception too.

For about-to-be-discontinued items, consider turning this into a “last chance to buy” event for your most devoted customers, like members of your loyalty program. This approach preserves the experience of privilege and scarcity luxury brands require to justify pricing levels. You could also cross-promote the discounted items with your new releases to shift the focus toward your brand’s broader appeal.

On sustainability, luxury brands do well when they resort to one particular aspect of advertising they do far better than less premium brands – storytelling. Add a tag that shares the sustainable origins of each item in the bundle. Offer early access to a new, sustainably made product line in the promotion. Consider making a charitable donation to a relevant cause on every purchase. Highlight the reusable or compostable packaging, including a leaflet that sets out your commitment to eco-friendly practices.

Cost is another factor. Promoting your goods and services at this time of year costs more, so this may be the time to experiment and pitch new and existing clients through selling and upselling campaigns. Ways to do this might include:

• Google Demand Gen: Use Demand Gen to launch highly visual campaigns with a variety of different ad formats. The platform matches your existing customer data with similar potential buyers and allows a high degree of customisation to allow you to target your internal KPIs.
• YouTube: Showcase holiday-themed or limited-edition luxury products with video content to appeal to clients looking specifically for premium gifts.
• Publisher deals: Team with high-end lifestyle or fashion publishers to feature your luxury items in curated holiday gift guides or offer exclusive Q4 promotions through their portals.
• Creative partners: Partner with well-known or unique artists or designers to promote your products and any incentives to buy them where they naturally fit your brand.
• Pinterest: Develop Q4-specific boards that showcase how your luxury products can be the perfect gift for a loved one.
• TikTok: Join in on the holiday spirit by creating engaging videos featuring your luxury items as the ultimate holiday gifts, aiming at younger customers with high spending power.

Getting your brand and marketing team ready for Q4

When working with clients on their peak period campaigns, we take the following three steps:

1. At the beginning

Planning is of paramount importance, especially when a high-demand season is approaching. To manage your team, consider creating a comprehensive checklist that outlines all the tasks and deadlines and who’s responsible for them.

You should ensure that your website can handle increased traffic and that you have adapted the on-site promotions and loyalty programs correctly. Also, decide on a frequency for checking website and campaign performance. Depending on the size of your business, you may require multiple checks per day or 2-3 meetings a week to discuss performance and updates.

You also need to decide how much you’re willing to spend to get new customers. Compare this year’s budget to last year’s and take into account any changes in general market conditions and your business and revenue goals for the quarter and the year.

When setting a budget and choosing products to lead with, consider factors like levels of consumer spending, successes and failures from previous holiday campaigns (including collaborations with partners), changes in online customer behaviour, manual vs. automated bidding strategies and so on.

Answering these questions will help you decide on a starting strategy and budget as well as benchmarks against which you can measure your performance.

2. Monitor your website performance

Keep an eye on website performance over the course of the holiday period to make sure that your site displays correctly, downloads fast enough and that consumers have a smooth buying experience. If you use embedded payment systems like Klarna or Clearpay, make sure there is a robust connection between your platform and the provider gateway. 

You will almost certainly require ongoing monitoring at the weekend too, so consider setting up weekend support and assigning a ‘shift rota’ so that specific team members check on relevant aspects and report back in case any technical issues occur. 

3. Improve and adjust during the campaign

There are unexpected upshifts and downshifts in demand over the course of a busy period. High-demand seasons can be unpredictable, and you need to be prepared to modify your strategies on the fly. Prepare to broaden your audience targeting during high-demand periods to maximise sales if you spot an opportunity.

For example, if one of your ads is performing particularly well, consider reallocating funds from less successful campaigns to extend your reach and take advantage of the demand. 

Be careful that you don’t exceed your overall budget. Implement manual budget tracking and make adjustments as necessary. Your spending will fluctuate during the season so you may wish to break your budget down into weekly and even daily allocations that can help you stay in control. If you find that you’ve under-spent in one week, roll that unspent amount into the next week’s budget. 

Aim for agility in how you manage your budget so that you can jump on valuable opportunities you spot as your campaigns progress while keeping to your long-term plan.

Work with VERB on your luxury peak campaign

At the end of the peak period, take time to review how well you’ve done. Go through your performance metrics and examine which strategies worked well and which ones disappointed. Put together a wrap-up deck that contains an overall performance review and the most valuable insights you gained during the campaign.

Ask yourself the following questions:

• What can you learn from the trends you observe? 
• Did your competitors do something creative that caught your eye? 
• Did you time your campaigns rollout well or would it have been better to shift them to different dates?

The answers to these questions will inform your general campaigning as well as campaigning during other and later periods of high demand. Also, look for ways you improve how quickly and successfully your team reacts to changes in the data and other events to discover how you can get a better performance out of them.

We have been working with luxury brands for over 10 years and have helped heritage brands with household names manage peak season advertising as well as up-and-coming premium and aspirational demands.

To speak with us about creating and deploying a successful peak season strategy, please get in touch with us. We’d love to hear from you.