A. Guttmann
Research Lead covering media
Luxury advertising and marketing
After slowing down during the COVID-19 pandemic, the luxury market has recovered and recorded an all-time high market value in 2022. Likewise, spending on marketing and advertising among luxury brands has resumed the growing trend and peaked that year. For instance, the French high-end goods conglomerate LVMH Group, primarily known for its fashion house Louis Vuitton and a market leader in the luxury industry, increased its investment in advertising and promotion by over 30 percent in 2022. Similarly, the global fashion luxury group Capri Holdings, which owns iconic high-end brands such as Versace, Michael Kors, and Jimmy Choo, spent over 320 million U.S. dollars in marketing and advertising in 2022 – its highest amount of ad spend since 2016.
Unsurprisingly, luxury advertisers dedicate a substantial part of their media budget to social networks. In the third quarter of 2021, leading fashion luxury brands invested roughly 400 million U.S. dollars in social media marketing only in the United States, with Instagram taking over 80 percent of the total. However, being active on social media is just part of the game. Luxury brands might adjust their marketing strategies to spot the right platform and format according to the consumers they want to reach, especially when willing to talk to younger audiences.
When it comes to TikTok, however, influencer campaigns appear as the most appealing strategy to build a connection with younger shoppers. During a global survey carried out in 2021, four out of 10 fashion and luxury marketing professionals stated they had implemented creator campaigns on TikTok in the 12 months leading up to the survey. For most of them, the strategy proved effective in reaching younger audiences and raising awareness about a brand. On the consumer side of things, ratings and reviews from influencers drove five out of 10 Gen Z luxury shoppers to purchase items online in October 2021, according to a survey conducted across five countries, including the United States.
Social media: a valuable marketing channel for luxury brands
Around six out of 10 affluent consumers aged 18 to 39 years worldwide followed a luxury brand on social media as of 2022. High-end labels like Chanel, Gucci, and Dior have millions of followers on Instagram, Facebook, Twitter, and YouTube. The platforms have become valuable channels for interacting with luxury shoppers. Social media is used to keep up to date about favorite brands, recommend these same labels to family and friends, and buy luxury goods. For instance, one out of five female luxury buyers mentioned making purchases via social media in the first quarter of 2022.Unsurprisingly, luxury advertisers dedicate a substantial part of their media budget to social networks. In the third quarter of 2021, leading fashion luxury brands invested roughly 400 million U.S. dollars in social media marketing only in the United States, with Instagram taking over 80 percent of the total. However, being active on social media is just part of the game. Luxury brands might adjust their marketing strategies to spot the right platform and format according to the consumers they want to reach, especially when willing to talk to younger audiences.
How luxury brands can grow awareness among younger shoppers
By 2025, Millennials and Gen Z consumers might account for 45 percent of sales in the luxury market. While high-end brands and marketers have focused on Instagram to reach affluent Millennial shoppers, they now adopt TikTok as a tool to win younger audiences. In an emblematic case, Gucci successfully embraced a parody on TikTok in 2020: Under the #GucciModelChallenge hashtag, users – mainly teenagers – posted videos wearing numerous layers of random clothes to build a Gucci-style outfit. Instead of ignoring the user-generated trend, the brand reposted some of the most stylish looks and enjoyed seeing its name on a hashtag that amassed millions of views.When it comes to TikTok, however, influencer campaigns appear as the most appealing strategy to build a connection with younger shoppers. During a global survey carried out in 2021, four out of 10 fashion and luxury marketing professionals stated they had implemented creator campaigns on TikTok in the 12 months leading up to the survey. For most of them, the strategy proved effective in reaching younger audiences and raising awareness about a brand. On the consumer side of things, ratings and reviews from influencers drove five out of 10 Gen Z luxury shoppers to purchase items online in October 2021, according to a survey conducted across five countries, including the United States.
