Walpole Insight | Decoding the New Luxury Consumer by Facebook’s Lisa Yates

Ahead of Walpole’s 2020 British Luxury Summit, Lisa Yeates, Luxury Client Partner at Strategic Sponsor Facebook, introduces their newest luxury insights – created in partnership with Ipsos MORI – focused on the luxury consumers’ path to purchase and, of course, their usage of social media – and what this means for the sector.

The luxury sector has seen significant growth over the last few years; Walpole’s recent economic impact study reported that specifically in the UK the sector has grown 49% over the last four years and is now worth £48 billion to the British economy.

This growth brings with it new audiences: Millennials and Gen Z who are forecasted by both BAIN & BCG to be a significant proportion of the luxury goods market by 2025. These are new audiences to define and understand; consumers with different values, expectations and behaviours, all of which impacts the way in which businesses should talk to them.

With the continued growth of digital there are multiple touchpoints to consider on the path to purchase, whether that be online or instore, creating a need for brands to consider how they communicate to the omnichannel shopper.

All of these exciting trends create opportunities for luxury brands to adapt and evolve communications with their consumers; here at Facebook we are often asked to share data and insights into who the luxury audience are, and also into the behaviours we are seeing from these audiences across the Facebook family of apps.”

Facebook commissioned Ipsos MORI to understand how luxury shoppers around the globe are consuming media, shopping and spending time on Facebook platforms. More than 4,600 luxury consumers were interviewed in France, Italy, the United Kingdom, Hong Kong, Japan and the United States. Luxury shoppers were defined as people in the top 10% in their age income bracket who have purchased a luxury product in the last 12 months.

This research showed the luxury shopping game has changed. Whether a person is looking for the latest handbag or researching a vintage watch, mobile has become the new boutique storefront where luxury shoppers discover, research and make decisions. And we now have proof that digital touch points like Facebook and Instagram play a valuable role in luxury purchases.

We know that luxury shoppers are well and truly going digital, our findings showed that globally 93% of luxury consumers surveyed use social media, and 92% are using a Facebook product.

Where people spend their time plays a big part in shaping their shopping experience even for luxury goods. Whilst we know the in-store experience is incredibly important to the luxury market, with 80% of purchases still being made in person, BCG state in the 2019 True Luxury Global Consumer Insight report that over half of purchase journeys start digitally, whether that be researching online and later purchasing in-store or online only journeys.

Ipsos MORI looked at key stages in luxury purchases: discovery, research and post purchase and found that the Facebook family of apps play an important role with 42% of purchase journeys involving at least one Facebook product; for the next generation this increases to 65% of journeys.

To better understand how digital touchpoints drove in-store sales, Michael Kors collaborated with Facebook, as well as Facebook Marketing Partner SocialCode, to develop a full-funnel campaign. Using a combination of link ads and carousel ads, the fashion brand drove traffic to its physical stores, and then integrated their in-store sales data to measure the impact its ads had there.

Michael Kors were able to seamlessly build campaigns designed to reach customers based on the value, timing and frequency of purchases. By using the facebook offline conversion tool to integrate in store sales data they were able to determine how many people interacted with ads before making a purchase at a Michael Kors location. With 31% increase in attributed sales and a 25% increase in attributed revenue offline conversions has allowed Michael Kors to better understand how its Facebook ads deliver in-store sales in its retail locations.

Facebook platforms are places to be inspired, whether its new fashion brands, celebrities or the latest luxury trends, and in a recent Accenture study we saw that over 50% of luxury fashion buyers in Europe draw inspiration from Facebook products.”

When luxury shoppers are further down the funnel we also see a sizeable number using our platforms to discover and research a product. A user could have been served an ad, browsed a luxury brand’s page or Instagram account, or researched more information about an item they are considering. Among all luxury consumers we surveyed globally, more than a third said Facebook products were involved in research and discovery with this behaviour being more common for the next generation and high spenders.

A case study from Ralph Lauren (pictured above) shows how they inspired a new audience using Facebook and Instagram.

Ralph Lauren wanted to take advantage of its 50th anniversary celebrations to raise brand awareness around its new collections and drive sales of specific product lines. It sought to acquire and retain two key groups: millennials and Gen Z (post-millennials), and Gen X.

Ralph Lauren crafted a social-first marketing approach that was designed to move customers from awareness to purchase on Instagram and Facebook. Working with ZenithOptimedia France, it created a powerful combination of video, collection and carousel ads in feed, as well as Stories.

The videos and images used in Stories followed Facebook’s and Instagram’s best practices and were custom-made to fill the entire screen. The brand was introduced immediately and clearly, and multiple scenes were used to keep people’s attention. The 50th anniversary celebration was made clear with bold, large letters. Ralph Lauren drove campaign awareness and brand preference by creating complementary assets across feed and Stories.

The campaign ran from September–November 2018 in six key markets: Italy, Spain, Germany, the UK, France and Sweden. It achieved significant results, including:

18% increase in online sales among acquired millennial audience

17-point lift in ad recall among acquired millennial audience

7.1X return on ad spend online with dynamic ads

41% increase in product page views among Gen Z (post-millennial) acquisition audience

Social platforms are also important for luxury consumers post purchase. After luxury shoppers make their purchase they are looking for opportunities to discuss their purchase with their community. This could be anything from sharing a photo with their friends in What’s App or posting about their shopping experience on their feed or in a group. 29% of luxury consumers who use a Facebook platform discussed their purchase on one of the platforms, again this is considerably higher at 47% for the next generation and high spenders.

What it means for marketers

Understanding people is key to creating experiences they will love. Our recent Ipsos MORI research provided us with key learnings for businesses to connect with the Luxury community on our platforms.

All Facebook Platforms are important for luxury consumers, consider optimisation across platforms to find the consumer where they are spending their time.

Turn intent into sales whether it’s online or instore, meet the shopper where they are and remove all friction from the path to purchase. Incorporate offline data to provide you with more understanding about your in-store shopper.

Facebook platforms are important throughout the whole purchase journey

Share the most relevant content to the user wherever they are in the purchase journey, the Facebook algorithm uses data to identify where someone is in the user journey and will serve them the relevant content

Consider ways to build a relationship all the way through to purchase and beyond.

Lisa Yeates is Client Partner, Luxury at Facebook. For more information, please contact Ciara Palmer cpalmer@fb.com.

Sources:

“Global Report: Understanding Luxury Consumers” by Ipsos MORI (Facebook-commissioned study of 4,606 respondents ages 18+ in US, UK, FR, IT, HK and JP), Jun 2019

Walpole Economic Impact Study: https://www.thewalpole.co.uk/research_n_insights/walpole-economic-impact-study-2019/

Bain Luxury Study: https://www.bain.com/insights/luxury-goods-worldwide-market-study-fall-winter-2018/

BCG-Altagamma True-Luxury Global Consumer Insight Survey Dec 18/Jan 19 (12K+ respondents in 10 countries) http://media-publications.bcg.com/france/True-Luxury%20Global%20Consumer%20Insight%202019%20-%20Plenary%20-%20vMedia.pdf