How To Made A Luxury Brand’s Digital Transformation

Luxury digital brand transformations have become all the rage as the COVID-19 pandemic forced more brands into an exclusively online sphere. Even with that time behind us, digital brand transformations have changed the way that luxury consumers perceive the industry for the better. How can your brand create a similar transformation?

The luxury industry has embraced digital transformation technology like augmented reality, the metaverse, and artificial intelligence to deliver more value to customers and expand audience bases. Brands such as Louis Vuitton and Gucci have spearheaded the effort, with many more following suit.

In this guide on digital brand transformations, we’ll explain how these transformations happen and why, including more on the technology you can use to replicate success for yourself. We’ll also look at innovative luxury brands that have spearheaded virtual fashion.

What Is Luxury Brand Digital Marketing?

All brands utilize digital marketing to some extent, including those in the luxury industry.

According to online advertising resource WordStream, the worldwide digital marketing, and advertising market will hit $786.2 billion in 2026.

The compound annual growth rate or CAGR between 2020 and 2026 for digital marketing is nine percent, so growth is sure and steady.

Luxury brand digital marketing is how those brands in the luxury sphere connect with leads and customers, convert more leads successfully, build customer loyalty, and increase sales.

Digital marketing includes categories or areas such as affiliate marketing, mobile marketing, email marketing, content marketing, social media marketing, pay-per-click or PPC advertising, and search engine optimization.

Luxury Brand Digital Transformation

Next, let’s delve deeper and explain what the impetus is for luxury brands to undergo digital transformations and how it’s done.

What Is It?

A luxury brand digital transformation is the integration of technology into various business areas. This integration can happen either wholly or in part.

The changes that a digital transformation brings will change how a luxury brand operates as well as how the brand delivers customer value, increasing that potential.

Why Do Luxury Brands Need It?

So why undergo a luxury brand digital transformation in the first place?

Well, as we touched on in the intro, most brands didn’t have a choice.

The luxury industry, like every other industry, was rocked by the COVID-19 pandemic. Shutdowns and restrictions in various parts of the world forced people out of the stores and into their homes.

By digitizing more luxury services, a luxury brand could connect more deeply with both leads and customers alike even in a time of disconnect.

Of course, there are yet more inspirations for a brand digital transformation.

Newer luxury brands want to differentiate themselves from a multitude of others, and a brand transformation can give them a competitive edge.

Older brands have to continually adapt to prove that they can keep up with consumer demands and interests.

By introducing a digital transformation, these brands can continue to stay atop the cutting edge and become even more priceless household names.

How Do Luxury Brands Use Technology?

The luxury industry utilizes technology as part of a broader digital transformation in many continually interesting and evolving ways.

Let’s peel back the curtain and take a look now.

Social Media

Social media remains an integral part of shaping a luxury company’s brand identity.

According to marketing resource Amra & Elma, 75 percent or three in four luxury shoppers buy a product from a brand after discovering that brand on social media.

The numbers were even more promising for certain subsets of customers, as 78 percent of millennials were more willing to purchase from a luxury brand, and 84 percent of Gen Z customers were as well.

Amra & Elma notes that of all the social media platforms out there Instagram remains the most paramount for luxury brands to focus on.

More stats from the agency report that 63 percent of millennial luxury consumers buy a luxury product upon finding it on Instagram and that 77 percent of Gen Z shoppers do the same.

Online Shops

How does a customer go from seeing a product advertisement on a social media platform like Instagram to purchasing it?

Luxury brands have wholeheartedly embraced online shops to put more products in the hands of readily buying consumers.

Those shops can exist through social media, as both Instagram and Facebook have online shop options. Customers can do all their shopping without having to leave social media, which is ultimately very convenient.

Outside of social media shops, luxury companies also have their own shopping portals through their websites.

These online shops showcase the same wealth of products as flagship brick-and-mortar stores but allow for much more convenient shopping since it can be done from home, work, or anywhere.

Augmented Reality

Augmented reality or AR isn’t yet on the tips of everyone’s tongues, but it seems like it’s only a matter of time before that’s the case.

The potential that lies within this technology is going to have big impacts on consumerism in the future. How do we know? It’s already started!

Luxury brands can utilize AR in so many engaging ways.

For example, a luxury travel brand grants consumers the opportunity to preview what their resort will look like as well as the travel destination before they ever pack their bags.

Luxury fashion brands now allow customers to virtually try on items like clothing, watches, hats, makeup, glasses, and more, all without having to go to the store.

Not only are customers impressed by the parameters of AR but they love how they get a free preview of the goods or services they’re about to invest in before parting with their hard-earned money.

Metaverse

The metaverse exists as a parallel to our own world. In the metaverse, people interact, shop, work, and live, just all digitally and through the actions performed in the real world.

Companies and brands of all kinds are clamoring to get in on the metaverse, and that’s true of the luxury industry as well.

Bankless Times estimates that the metaverse has a market size of $38.5 billion as of this writing, which is simply a gargantuan accomplishment.

Those who engage with the metaverse are willing to spend. According to the same article, most metaverse participants will pay up to $1,000 for VR metaverse gear, especially high-quality stuff.

Knowing that it’s no wonder why luxury brands such as Burberry, Balenciaga, and Gucci are making money hand over fist on digital wearables in the metaverse.

These wearables will never exist in a physical sense but are still hot commodities as the metaverse grows in popularity.

Artificial Intelligence

Another luxury brand digital transformation technology is artificial intelligence.

AI allows the luxury industry to deliver more personalized, customized experiences that today’s consumers crave.

Through areas such as image recognition, voice recognition, machine learning, and chatbots, luxury brands are changing with the times and meeting more of that consumer demand.

Voice recognition will allow customers to make orders by speaking rather than typing. Image recognition is part of what makes virtual try-ons possible, especially when it comes to luxury goods such as makeup, eyeglasses, and sunglasses.

Machine learning is how digital systems and software use data to continually improve accuracy and performance.

As for chatbots, those are much more common AI technology that companies across a myriad of industries have used for years.

Luxury brands have embraced chatbots to answer questions, address concerns, and point customers in the right direction when staff is unavailable.

Gucci Digital Transformation

In this section and the next, we want to look at two respective luxury brand digital transformations from two of the largest fashion houses on the planet, Gucci, and Louis Vuitton.

Gucci has gotten involved with the metaverse in a big way, as you can see on this page on their website.

In the Sandbox Metaverse, Gucci temporarily ran Gucci Vault Land, a meeting place “where curiosity awaits in every corner.”

Gucci also introduced a line of NFTs in collaboration with Superplastic called SUPERGUCCI. The two-part series of NFTs ran on an ultra-limited basis.

The first series sold out very quickly, and the second is sure to do the same.

Gucci also teamed with SuperRare to introduce the Vault Art Space in the metaverse, a marketplace that showcases “unique curated NFT artworks.”

In the game Roblox, players have the option to travel to Gucci Town, a free-dimensional town, to learn about the heritage of Gucci, shop for Roblox-exclusive Gucci items, check out digital art exhibitions, and play mini-games.

Louis Vuitton Digital Transformation

Years before people were talking about AR, Louis Vuitton proved that it was ahead of the trend.

The luxury fashion brand paired with Dr. Helen Papagiannis to make a stunning AR window display, be sure to take a look!

The display was for a Louis Vuitton Toronto shop and featured the classic VL monogram in quite a new and innovative way!

Is Your Luxury Brand Ready for a Digital Transformation?

Luxury brand digital transformations such as virtual fashion, augmented reality, and more take customer experiences to a whole new level.

If you want to step up your luxury brand, contact us at Mediaboom. We’re a digital marketing agency that regularly works with new brands. No matter your luxury branding goals, we can assist in your digital transformation to help you achieve more of your goals.