Modern Retail

How luxury brands can rethink their customer engagement strategies

Customer engagement strategies

After a tumultuous eighteen months, luxury retailers were able to re-open their brick-and-mortar stores which for some was a relief. But the fact is that the pandemic was a massive catalyst for change in the luxury sector, and far from moving back to traditional models, many brands have made a more digital-first, customer-centric approach central to their operations. 

As part of this evolution, the luxury sector is now addressing key questions about its customer engagement. ‘How can I acquire new customers’ is a big question, as are ‘how do I motivate them and drive people to interact and transact?’ and ‘what channels should I utilise to maximize engagement and sales, drive customer acquisition, boost retention, build brand loyalty and brand awareness?’ Many brands will use a plethora of different channels and strategies. 

To help those luxury retailers and brands to clarify their thinking, we have outlined a few channels to consider and how to make the most of them:

Paid Search

Many brands are continuing to advertise products in their product shopping feeds on Google, Bing, Facebook and Instagram. These link through to a home page or category listing page. Often it doesn’t feature the product that has been clicked on. It is worth linking advertisements to a listing page that includes the product or directing the customer to the product detail page itself, with key cross-selling functions.

Paid Social Feeds 

As with paid search or any form of advertising, brands need to direct the potential customer to the most engaging destination webpage. This content must be designed to convert the customer. If it doesn’t, test again, learn and optimise. If a customer is taken to any generic listing page, this is a poor shopping experience.

SMS 

More brands are utilising SMS marketing and notifications to reengage their customer, especially since emails can get lost. Mobile APIs and notifications are becoming more engaging and popular to stay in touch with customers.

Display Advertising

Reconsider what content is used for advertisements and whether the information is up to date. How will the customer feel when they see or interact with the content of the advertisement? Is it engaging? Luxury brands can again test, learn and optimise display ads to engage with potential customers. Targeting lookalike customers and learning from this data can also prove invaluable.

Email Strategies

A request from the CEO for that extra email campaign and digital blitz to a customer database in order to drive sales is a dated approach. It is too often done with little understanding on the impact it has on customer relations. If a business has something worth sending, send it, if not then don’t do it. There is a right time and a right place. Sending emails out to a segmented and targeted audience to drive sales at a precise point in time with discounts, if needed, or to elicit behaviour at the right time can work. But not when a customer has purchased the item a few days before at full price or when they have returned the item, saying they didn’t like it. Be smart and be relevant.

PLAS (Product Listing Ads), DPAS (Dynamic Product Ads) and Product Shopping Feeds

Right now, it is surprising just how many retailers still waste money advertising out of stock products, with no product feed management. Brands need to maximise their efforts to make their marketing budgets work better. This involves updating product feeds with relevant and updated information. Product feeds always need optimising, which includes titles, descriptions and attributes. Remove products from the feed if they have low margins and optimise the products shown when a customer searches your listings.

Marketplaces and Shopping Channels

The savviest of luxury brands are starting to see the real value of marketplaces such as Amazon, Tmall, eBay, Secret Sales, and OnBuy. It is antiquated thinking to believe that marketplaces degrade and devalue a brand. New audiences are using these platforms to search for products. These marketplaces represent new sales channels that are easy to navigate. Brands that use these channels well are selling more, but they are also owning and protecting their online reputation. Businesses can also manage and detect counterfeit products more easily. In effect, brands active on marketplaces are taking back control and ownership.

Concession Partnerships

Many brands engage with resellers through concession partnerships. The aim is to drive brand awareness, take advantage of a larger or newer audience that the multi-brand retailer commands through their high volumes of traffic, and in the process, generate sales. This comes with its own challenges such as managing different feed formats or different processes and procedures that the concession partner has. There are also marketing challenges within concession partners, such as bidding on keywords within paid search. This can raise the cost per click. Manging content for multiple concessions can be time consuming. Consider the ROI and whether it warrants the effort, not to mention understanding the full processes of getting stock into and out of these concessions, including returns.

By James Brooke, CEO and Founder, Amplience

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