The Evolving Luxury Industry Embraces Social Media And Personalization

Social media, which was once shunned by luxury retailers for fear of cheapening their exclusive image, is now being recognized as a valuable tool both online and in-store. The most successful luxury retailers also are increasing their personalization efforts, ensuring that customers feel like their personal style is at the forefront of the experience no matter how they shop.

Today, luxury thrives on the internet: 52% of high-income consumers prefer to shop online, according to the Great Retail Birfurcation study from Deloitte. This is particularly noticeable among younger consumers, as high-income Millennials are 24% less likely to shop in-store than all non-Millennial shoppers.


The luxury industry is catching on to these trends, and while print media still dominates total marketing spend, digital platforms are rapidly gaining ground, according to research by Zenith. Companies selling luxury brands are expected to spend 33% of their advertising budgets online in 2018, up from 30% in 2017, though the average spend varies for each luxury segment:

  • Automobile brands will spend 39% of their ad budgets on digital;
  • Watches and jewelry brands will spend 28%;
  • Fragrances and beauty will spend 27%; and
  • Fashion and accessories will spend 13%.

Social media is an important part of digital outreach, particularly for younger companies such as The RealReal, a luxury consignment retailer. This rapidly-growing company has been expanding both its brick-and-mortar presence and its e-Commerce business, and its social strategy simultaneously draws in new shoppers and motivates current customers to return.

“We have a pretty healthy following on social,” said Rati Levesque, Chief Merchant of The RealReal, in an interview with Retail TouchPoints. “We target people via social whether they’re being introduced to our brand via social, or they’ve been to our website and they’re being reintroduced that way. It’s a really good supporting tool for us.”

Luxury designers making a splash in the industry, such as Ulla Johnson and Reformation, are taking advantage of social media as well. Up-and-coming companies can use social media to build an audience, which in turn lets them take on the role of retailer by leveraging direct-to-consumer models.

‘Instagram’ Moments Make Social Media Part Of The Brick-And-Mortar Experience

Luxury retailers aren’t just using social media to build their brands — they’re incorporating it in the in-store experience, according to Sterling Plenert, SVP and Sector Leader, Luxury Retail at Callison RTKL. Offering a series of photogenic opportunities in-store can draw in customers and provide “free” advertising for retailers.

“It is almost impossible to develop a store now without discussing the ‘Instagram’ moment,” said Plenert. “In fact, whole retail concepts are now being developed as nothing more than a series of ‘hashtag’ moments. Visual merchandising is, at the moment, more dominant than any other element in the store, including product. It is what drives traffic.”

However, a key issue with this approach is oversaturation. If every luxury retailer takes a similar approach to making their stores social media-worthy, no experience will stand out enough to make that location a destination. Merchants should look at what makes their products unique, and integrate those brand aspects into the store experience to ensure they’re offering something the competition can’t replicate.

A Personalized Approach To Product Design And Promotion

Traditionally, luxury retailers have focused on simple, minimalist designs, but today’s shoppers are looking for more unique, personalized items. Brands are responding with items featuring logos and specific styles, according to Levesque. Shoppers felt that different brands were starting to resemble each other, and now they want products that stand apart from the crowd and help them express their own unique style, he noted.

This trend is manifesting as increased personalization at the brick-and-mortar level. Retailers are utilizing data to offer shoppers a truly curated experience in-store, and providing them options to make sure whatever they purchase is truly theirs.

“Due to the leaps forward in technology, the products for sale are able to be customized and personalized as well, often while you watch,” said Plenert. “In-store fabrication facilities are becoming more common and allow everyone to be able to purchase a one-of-a-kind product from their favorite brands. This kind of individualized experience is what is making brick-and-mortar retail more exciting than it has ever been. The smart retailer has learned how to keep the environment fresh so that it’s new and engaging every visit.”

Personalization improves the shopper experience even when its effects are invisible to the customer. Some retailers are leveraging data on the backend to improve upon existing offerings:

  • De Beers is using blockchain to authenticate its diamonds for shoppers;
  • L’Oreal is using augmented reality (AR), artificial intelligence (AI) and facial recognition to go beyond simulating make-overs on a screen, adding skin health diagnostics to their capabilities; and
  • Burberry is empowering associates with data to deliver top-notch customer service by using iPads to give them access to shoppers’ previous purchase information during interactions, enabling meaningful conversations with customers.

Utilizing the potential of both social media and personalization can help luxury retailers offer the exclusive experience their shoppers demand. These tools already are an integral part of e-Commerce, and properly implementing them at brick-and-mortar stores can create a memorable experience that stands out from the competition.

“The best of the luxury brands are spending more on their brick-and-mortar stores to create luxurious palaces for shopping, environments that educate the consumer about the quality and history of the product and brand,” said Plenert. “Spaces that make the customer feel special and enhance the experience of making a purchase.”

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