A majority of luxury executives see a deceleration for the fashion business this year, according to a November McKinsey report. Now a recent survey from Gartner reveals how this “slowdown” is igniting more investments by luxury brands into digital channels and e-commerce.
According to Gartner’s latest Luxury Digital IQ Index Reports for the U.S. and Europe — which covers fashion, jewelry and watches — nearly 40 percent of the chief marketing officers surveyed expect to throw more money at digital advertising and social media in the face of economic uncertainty.
That pendulum of uncertainty swings wide. While they believe a slowdown is in the works, they also see opportunity, thanks to a growing economy and strong consumer spending.
The solution? Double down on digital.
Brands that Gartner has been tracking spent 27 percent more on paid social media impressions year-over-year, and placed Google Shopping ads on 24 percent more product searches. E-commerce initiatives saw a boost as well, notably in areas like free delivery, returns shipping and media assets for product pages.
These companies also posted more on Instagram Stories, with frequency jumping 54 percent year-over-year. Casual content such as behind-the-scenes videos, they noted, beat brand campaign and runway videos.
For the researchers, the takeaway seems clear: “These investments reflect luxury brands’ increasing focus on direct retail sales and reducing dependency on struggling department stores,” Gartner wrote.
One-page mobile checkouts grew by 15 percent compared to the year before. But with conversion rates — i.e., the proportion of visitors who actually purchase — still “far behind desktop, brands are missing opportunities to optimize mobile sites for in-store conversion and underinvesting in omnichannel ad formats,” the report continued.
Given the findings, Gartner has a few words of advice: Focus less on formal content and more on “less-polished” and platform native content; post them more often in places like Instagram Stories and YouTube; and start looking into TikTok. In ads, emphasize what sets the brand apart from competitors.
And finally, make sure investments made online support offline. In other words, emphasize local shopping when investing in online shopping ads.
Gartner data shows that, during the last recession, executives regretted acting too slowly and investing too little. Today — as options, tools and platforms continually change, along with consumer expectations — they don’t want to make the same mistakes.
“Cartier and Tiffany & Co. can be seen continuously evolving their search executions, Gucci and Burberry are innovating on how products are released online and LVMH is shifting the social content strategy across its largest brands,” the report said.
“Louis Vuitton and Dior in particular have quickly diversified beyond the traditional luxury approach of polished ads and red-carpet events to digitally native content,” it continued. “Gen Z consumers present a huge opportunity for luxury brands, and those that can adapt to more informal, platform-specific strategies will be best aligned to win their favor, and further, can better set the stage ahead for growth and resilience.”