The lockdown closures and international travel restrictions brought about by the pandemic have a massive impact on the revenues of personal luxury in 2020. According to Euromonitor Passport (2021), the 2020 sales of women’s and men’s luxury timepieces have declined by almost 34% amounting to CAD294 million.
Luxury timepieces are typically bought in-store as customers wish to experience them before committing to buy high-value watches such as the Rolex. However, the economic and health crisis could have immense consequences on consumer purchasing habits and trends.
“With the subsequent lockdowns and limited store operations, luxury brands may rethink their game in the luxury field to keep standing still.”
Defining the short and long-term goals
The growth of luxury timepieces in 2020 was hindered by the significant decrease in high-spending tourists from the US and China. The global slowdown and limited face-to-face meetings have also slowed down corporate gifting. However, it is expected that luxury watch brands that have an online presence will recover faster as Canadians continue to embrace e-commerce for a safe, convenient, and broad selection shopping experience.
- Increase website foot traffic by an incremental of 50%
This can be supported by the following:
- 60% increase from the previous year’s unique website visitors per month
- 60% click-through rate on paid advertisement per month
- Increase incremental profit by 30%
This can be supported by the following:
- 30% increase on previous years’ revenue per month
- 30% decrease on previous years’ cost per conversion per month
- 30% conversion rates per month
Identifying the right market
Identifying the right market can help the brands maximize their marketing ROI. Knowing to whom and when to market the product can result in higher returns as it involves targeted marketing, rather than indiscriminate marketing. For example, here are three consumer markets the luxury timepiece brand could target.
|High-spending tourists||Corporation purchasers||Luxury collectors|
According to Cohn (2015), there are two approaches to identify your target market:
- Sharpen focus
- Efficiently narrow your gaze by considering factors such as age, purchasing power, geographical location, and marital status.
- Use a funnel approach to select the market from a multiple staged funnel. As you move through these filters, you will eventually conclude an appropriate target market for your product.
- Emphasize the value proposition by aligning your product with the demographic group’s values.
- Obtain data
- Identify promising demographic groups through metrics and data which may come from a variety of sources.
- Check the competitors’ demographic groups and their purchasing habits through surveys and observation.
Once you have pinpointed on a target market, evaluate the decision there is a substantial number of people who will fit the criteria. Avoid breaking it down too far, as it should find a balance on finding a perfect niche.
Attracting the attention of the market
Defining the target market is the hard part. Once it is found, it is much easier to know what media you should use to reach them. According to Statista (2020), only 10% of luxury goods sales are transacted online; however, the pandemic has changed the consumer’s habits as they become more comfortable shopping even for luxury goods. There is a need to implement personalized and data-driven digital advertising campaigns to reach audiences and stay a step ahead of the competition (Ducey, S., 2021). Below are some digital marketing strategies to target potential buyers.
- Creative Strategy and Planning
There will be a challenge to identify the emotions that will resonate from each consumer, so a data-driven creative strategy will ensure that we drive our audience with appropriate messaging and visuals.
- Email Marketing
The email marketing strategy has to reflect their in-person brochure or magazine. The content should be as helpful as an in-store sales associate who can offer and highlight certain products that could spark interest of their consumers. It should also elicit a feeling of exclusivity and personalization by avoiding generic email blasts.
- Paid Social
As 60% of expenditures are contributed by the Millennials and Gen Z who spent over 2.5 hours browsing social media every day. There is a massive opportunity to reach them on social media either inorganic or paid advertisements. These segments are looking for brands that have interactive and shoppable content.
- Influencer Marketing
A recent survey carried out by Twitter indicates that 40% of respondents had actually purchased something based on seeing it used by a social media influencer. It is an effective tactic for brands to find a perfect influencer who can resonate with similar branding and value.
- Paid Search & SEO
Only 7% of shoppers use a manufacturer or retailer’s name to search for a product; hence, it is essential that shoppers continuously associate your brand with the generic keywords they are more familiar with.
Implementing a luxury strategy plan
Although the luxury timepiece can be recognized as a brand, there are some marketing tactics to further grow and market your brand (Finn A., 2021).
- Exclude negative keywords like “cheap” and “free”
The classic “addition by subtraction” strategy for marketing your luxury brand ensures it never bids on users’ keywords who have no interest in the product. The account-level negative keywords just add to AdWords efforts, the goal is to eliminate unqualified traffic.
- Make Bing a Priority for Advertising
Nearly a third of Bing’s audience has a household income of $100,000 or more. This means 160 million unique searches and 5 billion monthly searches. It does allow the brand to reach 59 million people who are not tapped on Google.
- Elevate Your Ad Copy
Utilize the expanded text ads by elevating ad copy. Add a second headline and URL pathways in the description so as to better relay the brand’s unique sales proposition. This can make a difference between a prospect’s click and just letting the prospect watch and scroll by.
- Utilize Income Targeting
Another venue to efficiently spend on the ads which end up in front of the right people is to do income-based geo-targeting. According to Google, the income-based location is based on publicly available data from the US Internal Revenue Service, this is a helpful tool for advertisers to target ads depending on their average household income.
- Nurture Paid Traffic with a Personal Touch
Know the difference between remarketing and dynamic marketing. The latter shows prospects who visited your site exactly what they looked at; it follows them around, convincing prospects bit by bit to make that purchase.
Cohn, C. (2015, February 6). Steps to identify your target market. Forbes. https://www.forbes.com/sites/chuckcohn/2015/02/06/steps-to-identify-your-target-market/?sh=473038cb229d
Ducey, S., (2021, May 11). Luxury digital marketing strategies: 5 ways to reach buyers online.https://www.statista.com/statistics/1092062/e-commerce-share-of-personal-luxury-good-sales-worldwide/#:~:text=In%202017%2C%20nine%20percent%20of,reach%2025%20percent%20by%202025.
Euromonitor Passport (2021, January). Luxury Timepieces in Canada. https://www-portal-euromonitor-com.centennial.idm.oclc.org/portal/analysis/tab
Finn, A. (2021, April 14). 5 luxury marketing strategies that drive high-end sales. WordStream. https://www.wordstream.com/blog/ws/2017/02/15/luxury-marketing-strategies
Statista (2020, November 27). Online penetration of global personal luxury good sales 2017 – 2025. https://www.statista.com/statistics/1092062/e-commerce-share-of-personal-luxury-good-sales-worldwide/#:~:text=In%202017%2C%20nine%20percent%20of,reach%2025%20percent%20by%202025
A digital marketing analyst intern from the International Institute of Digital Marketing TM