Building Your Retail Brand Through Social Media

Photo Courtesy of DreamsTime

In order to promote your brand and boost sales, aggressive marketing campaigns are a necessity. When you take a look at some of the biggest and most successful companies in the world, their branding strategies are clearly defined. Take L’Oreal, one of the main leaders in the cosmetics and beauty industry. Their slogan "because you’re worth it" generates excellent brand awareness and is highly reputable internationally. Subsequently, this leads to increased sales and in turn, increased profits.

However, these huge companies also have large advertising budgets. What if you are a smaller company? Maybe even a start up and you want to implement the best brand building strategy. What can you do? The life saving strategy is called "social media", which is not only cost effective but is extremely worthwhile. Social media networks are free and easy to use. Social media coupled with your other advertising, online and offline, can really make a difference to help boost your brand. It has become an integral part of retail businesses marketing plans. Twittering has overtaken blogging as it’s faster, shorter and more concise. Emails are slightly more personal whereas Twitter lets you connect through one simple line and removes the difficulty of reaching out to people who you may not even know their email address. 1/3 of Twitter users talk brands. A recent research study by ROI Research found 33% of Twitter users share opinions about companies or products while 32% make recommendations and 30% ask for opinions[1].

Social media not only encourages customer interaction but allows you, the business owner, to stay in touch with current customer’s and helps maintain and retain relationships. You can also receive feedback instantaneously and answer customers questions immediately. All the while, building brand awareness and customer loyalty.

Twitter usage grew from a few million user’s in 2009 to over 20 million in 2010. In 2011, Twitter adoption is expected to grow to 32 million and 36 million in 2012[1]. Social media has enabled companies to actively engage with their everyday customers. The new age WOM “word-of-mouth” has provided customers with instant gratification, as they are now receiving answers and recommendations in a very short space of time.

Four important points for building your social media strategy:

• Know your audience - one social media Network will work for some, but not for others. You need to find what works best for you and your target market.

• Define a clear strategy about what you want to achieve as well as effectively allocating time and resources.

• Try different forms of social media to find out what works best for your specific audience. Trial and error is the solution to success.

• Measure. Measure. Measure. It is extremely important to measure the impact of your strategy.

[1] www.emarketer.com




Posted by Trish McGinty, Dublin Retail Team

How Does Luxury Translate Online?

Photo courtesy of PhotoXpress.com

If every woman could buy a Chanel dress online in a few simple clicks, would that Chanel dress still be as desirable? Some might say that the limited number of women able to afford the dress secures its exclusivity; others that the sudden ease of access to the product negates its uniqueness. If you can walk into Burberry on New Bond Street and purchase a bag, is barring that same action online a necessary protective measure against the dilution of that brand’s exclusivity, or just plain inconvenient for the regular Burberry shopper who would like to be able to purchase through any and all available channels?

Luxury retailers remain undecided. At one end of the scale, Burberry now sells a wide range of its products directly online throughout Europe and the US.

More cautiously, Louis Vuitton, Gucci and Christian Dior have opened limited online boutiques in France and Germany, and brands like D&G, Calvin Klein and Donna Karan sell a variety of goods - mainly accessories and nightwear - through catalogue and high street retailers like John Lewis, Littlewoods Shop Direct Group and ASOS.com.

In contrast, Chanel sells nothing at all on its site and is one of a cartel of luxury retailers who argue that customer service online cannot compare to that found in a boutique, and shopping over the Web negatively affects brand perception.

What is clear to see is a growing market for luxury apparel online. A 2008 report from Google and US research firm Unity Marketing which surveyed 1,000 people with a net worth of $1 million or more-and a yearly income of $175,000 or more- noted that designer clothing was respondents' favorite online purchase, followed by jewelry and accessories. In terms of their total expenditure on luxury, the Internet ultra-affluents spend three times more overall on luxury goods than the retail shopping ultra-affluents ($61,325 as compared with $20,411)[1].

The US leads the field in this respect and has done so for the last two or three years. However, in the UK too, shoppers seem to be happy spending more. The current online luxury market is estimated to be worth at 3.6 billion-euro ($4.9 billion), which Bain & Co. estimates grew by 20 percent in 2009 [2].A recent Online Trends 2010 Research Report sponsored by Kelkoo, found that the average price per item was also growing, with the proportion of shoppers prepared to spend £1,000 or more for a single product online increased in the UK from 12% in 2008 to 25% in 2009 [3]. One theory is that the very wealthy, who were not hugely affected by the recession were cautious all the same from 2008-09 in line with market fears, are now starting to spend again with more confidence.

Net-a-Porter is a luxury apparel online success story. Unique in its class in the UK, it has gained the confidence of both its customers and the brands that feed into its ever growing range. More than 2.5 million women view its pages each month, and the company has taken more than 1 million orders with sales of 120 million pounds in the year ending January 31 [4]. The recent acquisition of a 67 percent stake in the company by Cie. Financier Richemant SA, the world’s largest jeweler, valued the 10-year-old company at £350 million ($533 million). Aside from its attractive business proposition (great range, easy site navigation, extensive shipping parameters and free returns), Net-a-Porter also nurtures its customer base through creative interactions via newsletters, Facebook, Twitter and You Tube.

Whether all the big fashion houses are ready to start selling all their products to an online market or not, there is a concerted move towards interacting with online customers. With more and more shoppers subscribing to the ROPO (Research Online Purchase Offline) phenomenon, no retailer can afford to ignore the opportunity to engage with their customers on the Web. Key results from a recent study with Auchan in France showed that ROPO is responsible for 13% of offline sales and each euro invested in paid search delivers more than €20 offline in-store [5].

The 2008 Google and Unity Marketing webinar noted that nearly 80% of “affluent luxury consumers” belong to a social network [6] (a number that is likely to have risen by 2010), so it is no surprise that the likes of Burberry has its own Facebook page with over 900,000 followers and Gucci, Louis Vuitton, Chloe and more have newsletter sign up pages to inform fans of the brand of their latest news and trends. Chanel even broadcasts a podcast and has a downloadable iPhone app, to keep in touch with its customers about breaking trends and direct them to store.

For those already serving their customers directly online, or considering doing so, various steps can be taken to ensure their advertising on Google targets the right users:

• Concentrate on your brand name and combine it with all the products you sell. Remember that some of your customers will be browsing while some will already have a good idea of what they are looking, so include keywords from the very vague (e.g. “Burberry mac”) to the highly specific (“Burberry raglan swing trench”).

• Experiment with generic terms: a bit of a hot potato, with some high-end retailers refusing to accept the value of mainstream traffic terms, and others insisting on their importance in a wider picture which sees them assisting sales. Test them for yourself.

• Include Designer Generic terms. If the value of straight generics (“dress shopping”, “leather handbag”, etc.) isn’t convincing, don’t forget to include the queries which are generic yet luxury-minded: “designer bag”, “designer brand dresses”, “shop designer clothes”, etc.

• Consider targeting catwalk, fashion week or ad commercial searches with text or display ads or both. Keywords like “London fashion week”, “new Gucci tv ad”, “Chanel runway”, “Gucci s/s show 2010” are rising searches on both the Search Network and on You Tube.

• Include negatives to prevent your ad showing when people search for your brand in a less desirable way (e.g. “wholesale”, “free”, “second hand”, “used”, “eBay”, etc.

• Don’t forget, you can also drive traffic to your site by including campaigns for non-brand searches that still relate to your brand, e.g. “Rolex downloads”, “Chloe news”, “Louboutin email sign up”. Direct these users to the correct part of the website with your landing page.

• Be clear in your ads that you are the official site and/or include the ™ sign by your brand name, to let your customers know they are visiting the authentic site. Although others may bid on your brand, only you may use this symbol.

• Use the Google Keyword Tool to identify additional or new ideas for keywords based upon internal Google data. The tool indicates how competitive terms are as well as search volumes for those keywords, giving a good idea of the likely keyword opportunities and costs involved. It can also identify new ways to target your customers. For example, if there are increasing searches for “Valentino a/w 09 catwalk” maybe you should think about uploading videos of this show onto YouTube, your website or both and using Google’s search and content networks to direct your customers to them.

• Combine your search campaign with GCN and YouTube targeting. Compelling banners and videos are a great way to engage with your luxury audience and can be used to reinforce core brand values. Upload catwalk shows complete with soundtracks, and use Google’s Promoted Video ads to direct your customers to these.

[1] "The Luxury Report 2008: Who Buys Luxury, What They Buy and Why They Buy", Unity Marketing
[2] http://www.businessweek.com/news/2010-04-01/richemont-buys-net-a-porter-online-fashion-retailer-correct-.htm
[3] Kelkoo Press Release Center: http://www.kelkoo.co.uk/co_17268-kelkoo-press-release-european- eretail-to-buck-trend-in-2010.html
[4] “Net-a-Porter founder poised to bag £50m” by Elizabeth Riby and Hannah Kuchler, FT.com
[5] Google /Auchan Study 2009
[6] Google Ultra-Luxury Consumer Study 2008

Posted by Emily Whitchurch, UK Retail Team

Luxury Loses its Lustre and Bling Ain't the Thing...Except Online

Questions of whether the gilded luxury bubble has burst are plaguing retailers. Verdict recently issues a dire report about the state of global luxury retailing, which it predicts is facing the toughest market conditions in two decades. [1] Changing consumer behaviour, currency exchange issues and bankers having the bonuses taken from under their noses are all factors contributing to the tough times faced by luxury brands. The silver lining (hey, at least it's a precious metal) is that e-commerce is poised to become a major sales channel for for high-end goods.

In the past, luxury retailers focused almost exclusively on the very wealthy. In the current economic climate, where even rap stars are selling their dazzling grillz for the liquidation value at sellyourgoldteeth.com [2], retailers cannot rely on the ultra-rich to keep their businesses afloat. It was speculated that the closure of two Barney's stores had less to do with the wealthy curbing their spending than with the middle-class, whose aspirational and splurge purchases--which were perhaps influenced by watching Sex and the City's Carrie Bradshaw console herself with Barney's merchandise--have contributed to the store's success in recent years, but now is in decline due to recession woes and job fears. [3]

In the past few years, UK department stores have seen a sharp contraction in sales, damaging the luxury market even further. [1] However, many believe that this is not the end to extravagance as we now know it; shoppers still want their luxury goods, but on the down-low. "It's a lot more chic to be saying, 'I'm cutting back,'" said Alexis Maybank, a co-founder of an online luxury shopping site, Gilt, in a recent Los Angeles Times article. "You see a lot of people seeking privacy in their shopping, but they're still shopping. You see people moving to online sites." [4]

And while many consumers are ready to buy, most luxury retailers aren't willing to sell. The majority of of UK luxury retailers do not offer transactional sites and instead use the web exclusively for branding and informational purposes. But while luxury brands struggle with how to maintain the air of exclusivity and customer experience that can be found in their retail stores, consumers have shown they they are not afraid to make high-end purchases online, financial crisis be damned.

It appears that the road less travelled by luxury brands--online retailing and e-commerce--may be paved with gold, as sites that are offering luxury goods online are thriving. You may not be able to buy Oscar de la Renta goods directly in the UK online, but you can buy them, and those of numerous other designers, on Net-a-Porter.com. Net-a-Porter recently reported a 48% increase in sales and a 230% increase in profits, citing exclusive collaborations with designers such as Alexander McQueen and RM by Roland Mouret as key drivers to their success. [5]

Amazon.co.uk is also hip to the luxury market. On the site, their marketplace sellers list more than a hundred pieces of jewellery priced between £100,000 and £223,000 on the site, and Amazon directly sells jewellery at price points that range above £7500. Other sites, like SheerLuxe.com, are combining quality content with the luxury shopping experience on their site that is as much like an online fashion magazine as a shopping portal.

Ultimately, although luxury purchases may slow in stores, the possibilities for luxury retailing online are as dazzling as the jewellery they sell. In a survey released this month, 43% of UK shoppers said they planned to spend more time online searching for cheaper versions of items from high street stores. [6] And Polo Ralph Lauren recently saw a 19% increase in online sales, notwithstanding comparable-store sales declining 5.2%. [7] So despite the doom and gloom forecasts, the online opportunities for the luxury market are crystal clear.

[1] "Gobal Luxury Retailing 2009" Verdict Research, June 2009
[2] "Culture of Bling Clangs to Earth as the Recession Melts Rappers' Ice" Miguel Bustillo, Wall Street Journal, May 26, 2009
[3] "Barneys becomes latest recession victim" Bruce Watson, Daily Finance, May 6th 2009
[4] "Spending on luxury in tight times" Carla Hall, Los Angeles Times, May 10, 2009
[5] "Net-A-Porter reports profits up 230%" Internet Retailing, June 12, 2009
[6] "UK E-Commerce: Fighting the Downturn" Karin von Abrams, eMarketer, August 2009
[7] "Luxury goods maker Polo Ralph Lauren scores with a 19% rise in web sales" Internet Retailer, June 4, 2009

Posted by Lina Goldberg, UK Retail Team