Understanding and attracting luxury consumers thanks to digital technology

In a world where digitalization has become essential, luxury brands have had to rethink their approach to stay in tune with their affluent clientele.

Acquiring new customers is crucial for luxury brands, which bring in up to 60% new customers annually*. Digitalization is now a necessity, with 76% of affluent clients making at least one online purchase**. Acquisition strategies must cater to the specific expectations of these customers, who seek a luxurious experience rather than promotions. Their purchasing decisions are driven by customer experience (for 64% of them) and brand image. These hedonistic clients desire an exceptional relationship, where emotions take center stage.

*According to an Altagamma BCG study on luxury
**According to the barometer from the French Fashion Institute and the British e-commerce site Matchesfashion.com

Customer acquisition in luxury: a digital challenge

Luxury brands, operating in a niche market, have traditionally built their reputations on time-honored craftsmanship secrets and exclusive communication tailored to a privileged clientele.

However, with the rise of social media and digital platforms, they must now adapt by becoming more open and transparent. This transformation is essential to engage with their target consumers while inspiring others.

Chanel, for example, has successfully made this transition by offering VIP-style fashion show videos that provide a behind-the-scenes experience, a feature highly appreciated by viewers.

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The digital gift card: a new service to attract new clients

The digital gift card is a strategic tool for luxury brands, offering several benefits: it provides a new service for their clients, maintains the codes of luxury with elegant design and personalization, enhances the customer experience, and encourages impulse purchases. Additionally, it is often seen as a thoughtful gift, marking the beginning of an exceptional relationship.

For example, Chanel offers sophisticated, customizable e-gift cards with luxurious designs and personalized messages, delivered instantly via email. These cards encourage recipients to visit the site, explore the product range, and enjoy an immersive, prestigious shopping experience—promoting unplanned purchases while upholding the brand’s luxury image.

If high-end brands wish to elevate the gift card experience even further, they can offer gift card recipients an exceptional in-store shopping experience.
For example, Printemps enhances the shopping experience by pairing the gift card with a personal shopper, a gourmet break, and a wellness moment, creating a truly memorable experience.

 Customer acquisition through businesses

Gift cards offer luxury brands a tremendous opportunity to enter or accelerate their presence in the B2B market. By developing a dedicated service for B2B gift card purchases, these brands can tap into new revenue streams and multiply opportunities to acquire new clients. In fact, B2B activities account for two-thirds of a brand’s gift card programs.

Thanks to their personalization and the freedom of choice they provide, gift cards are particularly valued by various professionals in multiple use cases.

Luxury brands can target large companies, such as law firms, accounting firms, or strategic consulting agencies, who seek distinctive gifts to reward their top employees, clients, or partners. They can also appeal to luxury hotels, fine dining restaurants, Michelin-starred establishments, high-end car dealerships, and premium wellness centers, all of which are looking for refined gifts to enhance their client experience.

For example, a luxury hotel might offer a gift card to a guest upon arrival, inviting them to enjoy an exceptional shopping experience during their stay. Similarly, a car dealership could present a gift card at the delivery of a vehicle, adding a touch of luxury to that important moment.

Ultimately, all recipients of these gift cards become potential clients for luxury brands, with approximately 30% of them being new customers.

The ROPO Strategy (Research Online, Purchase Offline)

The ROPO strategy involves consumers researching products online before purchasing them in physical stores. They use the internet to compare options, read reviews, and evaluate products before finalizing their offline purchase. Retailers can capitalize on this trend by optimizing their online presence and seamlessly integrating their online and offline channels. This allows them to attract consumers into their physical stores and strengthen their relationship with them.

Luxury brands are embracing the ROPO strategy, where customers conduct online research before completing their purchase in-store. They create content on their websites, social media, and other platforms to support these searches.

Tools such as online reservation of items for in-store trials or click-and-collect services are used to guide customers towards a luxury in-store experience.

Here are some examples of ROPO strategies adopted by luxury brands:

• Louis Vuitton allows online reservations of items for in-store trials.
• Chanel offers personalized appointments after an online search.
• Gucci enables online reservations for in-store fittings, offering an immersive experience.
• Hermès combines detailed online information with a tactile in-store experience.
• Dior offers personalized in-store consultations, bookable online, skillfully integrating online and offline channels to enhance the customer experience.

Customer acquisition through social media and influencers

Social media, in particular, has become a fertile ground for acquiring new clients. Affluent customers are highly active on these channels, with 85% of them using social media regularly. Moreover, over half of these users follow luxury brands to stay updated on events and new collections.

In this context, luxury brands must treat their respective social media platforms as an additional showcase for their brand. For 40% of luxury consumers, their purchase intent increases when social media recommendations are positive. Over the past few years, influencers have gained significant prominence, becoming key drivers of brand advocacy across social channels.

Influencer marketing has now become a booming industry, projected to surpass $2 billion by the end of this year. This growing investment mirrors its effectiveness: 60% of sales can be attributed to this strategy. It’s no surprise that Gucci, in the first quarter of 2017, managed to generate $227 million in revenue.

However, while luxury brands traditionally excel in the realm of influence, they face greater challenges adapting to the digital space. Controlling the narrative online and measuring the direct impact of these actions can prove complex. Leveraging influencers, however, allows brands to target specific groups, such as millennials, who are less receptive to traditional advertising but highly responsive to influencer marketing.

Word of mouth: the ultimate weapon for acquisition

Word of mouth far surpasses other forms of recommendations. Two-thirds of new clients turn to friends or other consumers when making purchasing decisions.
Several actions can boost word of mouth, but the most powerful tool remains the digital gift card. When a friend or loved one gives an e-gift card, they act as a brand ambassador, expressing enough trust in the brand to gift it to someone they care about. As a result, the recipient feels more confident visiting the store or website to make a purchase.
If the recipient or giver has the option to share the gift card on social media, the digital gift card significantly amplifies its reach. Every “friend,” “follower,” or “subscriber” is touched. Even if they don't receive a card directly, their perception of the luxury brand in question is positively influenced, which may lead to future purchases.

The exclusivity-driven strategy

Luxury brands leverage exclusivity as a client acquisition strategy by offering limited-edition collections online. This creates a sense of urgency and exclusivity, encouraging affluent customers to make impulse purchases.

For example, Dior partnered with Bergdorf Goodman to launch an exclusive online shoe collection for a limited time, which proved to be a great success.

So why does this strategy work so well?

The temporary and exclusive nature of the products directly taps into the concept of rarity, which is one of the core fundamentals of luxury. Limited-edition collections online make affluent clients more willing to spend on internet purchases. Additionally, the “temporary” aspect adds an experiential layer, as it heightens the desire among luxury consumers to obtain the sought-after new products.

Acquiring new clients in the luxury sector through digital channels represents a significant opportunity for brands looking to expand their portfolio and strengthen their market presence. To succeed in this area, it is crucial not to apply the same tactics used by mainstream brands, as luxury clients have very different expectations. Exclusivity, personalization, emotion, and rarity are the key factors. The digital gift card has become one of the new client acquisition tools, perfectly aligned with the expectations of these affluent consumers.

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