north american luxury industry news curated by iProspect
Welcome to iProspect's March Newsletter
This month's newsletter contains the following topics: consumer research, industry outlook/trends, watch/timepiece category news including a segment specific to the Apple Watch, programmatic buying, and the latest POVs and announcements from iProspect, inclusive of a reminder about our 2015 Client Summit in Asheville, NC. We were SO EXCITED to see so many of you are attending. If you have not registered yet, please do so as the hotel reduced rate expires 4/10.
If there is ever a topic we haven't covered, please let us know and we'll be sure to include it for the group.
For your convenience, we've also listed links to the previous newsletters on the bottom should you need to reference again and/or share with colleagues.
When Screen's Collide: Viewer Behavior in Multi-Screen World (study)
YuMe commissioned Nielsen to explore different levels of engagement with multiple devices when in a multi-tasking environment. The research explores ad effectiveness during multi-tasking situations in a simulated living room environment, and helps to establish which device provides the greatest value for brand advertisers. Specifically, the study validates how the digital environment creates opportunity for user engagement and complements television campaigns, and reveals that attention lost from TV ads can be regained by ads on digital platforms. One key takeaway showed that TV was still the go-to medium of choice, but that respondents quickly lost focus to seek out content on other devices.
Link to infographic here, link to full study here, link to video below
Chinese Millennials: The $264B Tourism Industry Target (article)
If you thought global Chinese travelers were already spending jaw-dropping amounts worldwide, you haven’t seen anything yet, according to a new report by Bank of America Merrill Lynch. By 2019, the report finds, the global travel industry is poised to see an influx of Chinese spending worth some $264 billion, much of that powered by China’s younger generation.
By 2019, BoA Merrill Lynch estimates, the number of outbound Chinese travelers will surge to 174 million, a sizable increase from 2014, when 109 million ventured abroad and spent $164 billion. To put this in perspective, the report notes that $264 billion is roughly the size of Finland’s entire economy (and bigger than that of Greece).
The main demographic driving spending growth in the next five years will be Chinese millennials, defined as 25- to 34-year-olds, which comprise 35 percent of all outbound Chinese tourists. Younger travelers aged 15 to 24 are another vital demographic, accounting for an additional 27 percent.
So what does this mean? It means it’s vital for the global travel and retail industries to understand the demands of this demographic, which is set to revolutionize the way Chinese tourists travel and shop. Current trends offer a glimpse at how China’s young traveler will behave at home and abroad in the years ahead. As experience becomes an increasingly important priority for for Chinese travelers, they’ll allocate more of their budgets towards activities and dining, while opting for far-flung or exotic destinations over the well-worn global tourist hubs. However, this doesn’t mean they won’t want to show off to friends—on the contrary, sharing experiences to social media will remain a fundamental component of trips.
While they won’t forget to shop, China’s younger travelers will only intensify their search for unique, niche brands, prizing individuality above all else. This means that large-format shopping centers will need to do more to attract young Chinese travelers, as they’re far less likely to show up on a tour bus than their parents, and will increasingly self-book personalized itineraries rather than using traditional tour operators. However, this offers shopping centers and luxury boutiques huge opportunities: for example, providing free wi-fi and using it to engage Chinese shoppers via WeChat can drive greater footfall, encourage longer stays, and provide opportunities for unique activation.
China's Luxury Big Spenders: Young, Trendy & Not So Rich (article)
Global luxury brands expanding in China are better off targeting the HENRYs - "high earners, not rich yet" - instead of the ultra-wealthy, as a slowing economy and a government that frowns on official excesses usher in an era of less showy spending.
HENRYs believe less is more. These younger spenders pride themselves on their individualism and snub the ostentatiously branded handbags and accessories loved by the "secretary" types. Fuelling their shopping habits are social media, multi-brand retail websites such as Beijing-based ShangPin.com and Italy's Yoox, eclectic boutiques, and high-end department stores like Lane Crawford and Galeries Lafayette.
"The Chinese consumer is now more educated and less conformist, which means they are less inclined to look like a secretary and go for luxury brands that are overdeveloped," said Lionel Roudaut, head of fashion design and textile at Singapore's LASALLE College of the Arts. "The Internet has also given them access to products not available before."
Link to article here
The Global Traveler's Road to Decisions (study)
Digital greatly influences travel planning from the very first stages of the consumer journey, with 65% of leisure travelers researching online before they even decide where or how to go. For the sixth consecutive year, we partnered with Ipsos MediaCT to uncover how travelers seek inspiration, research brands, and book across devices. Many consumers go into planning undecided on a brand, and continue to turn to mobile and online video for help. Marketers who have a strong presence across channels will be best positioned to engage new and existing travelers.
Link to article & slides here, full study here
Ten Key Trends in Luxury Retail (article)
- Trivergence of retail
- Hunt for new customers
- Power of travel
- Polarization of luxury
- Editorial’s retail reinvention
- Personalized storytelling
- Branded media
- Millennial refresh
- Know I know
Link to article here
Luxury Outlook 2015: Luxury Daily Special Report
Digital media is ascendant. Use of smartphones and tablets for research, shopping and buying is on the up. Not surprisingly, ecommerce and mobile commerce are being taken more seriously. Luxury brands and retailers, however, must work harder to link the digital experience to the store. Luxury customer service must continue to be seen and felt even in an increasingly digital world.
Link to report here
Luxury Brand Passion Report (study)
What motivates the world’s most discerning consumers? NetBase presents an overview of what consumers think and feel when it comes to the most revered brands. The report highlights the world’s most recognized luxury brands and identifies consumer preferences of these brands year-over-year, as well as:
- The global social ranking of all top 45 luxury brands
- Brand preferences and trends in the US, UK, and globally
- Key influencers driving opinions for the luxury brand category
The study also highlights ten social tips for luxury brands:
- Know what your customers are talking about & where they share/get information
- Obtain accurate insights on the sentiment of your customer, historically & today
- Know your followers, build them out & your fan base
- Know & connect with your VIP influencers
- Know more about your category & competitors to stay ahead of the game
- Access how different social channels are working for you
- Track launches, events & campaigns in real time
- Get a grip on consumer emotions (the heartbeat of brand preference)
- Be ready to detect a risky situation early & take action
- Drive one source of truth across the entire business
Link to full study here
NRF: Spotlight on Modern Retail 2015 (report)
The NRF Foundation’s latest spotlight report looks at how the most inventive companies approach omnichannel, mobile, social media, big data, marketing and other critical initiatives.
This industry snapshot highlights the innovative and entrepreneurial spirit of retail. By the numbers:
- Retailers report their mobile sales grew by 87 percent during the first three quarters of 2014.
- The retail industry supports more than 800,000 technology jobs.
- More than half of retailers say mobile initiatives are among their top three priorities this year.
- 44 percent of consumers regularly research purchases online before going to a store.
- One in five holiday shoppers were influenced by email advertising.
Link to download full report here
Shop.org's - The State of Retailing Online: Mobile Movers & Shakers (infographics)
-----WATCH CATEGORY NEWS-----
Patek Phillippe Interviews Prospective Consumers for Exclusive Watch (article)
The watch will be known as the Grandmaster Chime, and only seven of them will be made. Prospective consumers must interview with the chairman of the brand, Thierry Stern, to purchase one of the six available watches, while the seventh will be kept by the brand to be displayed at the Patek Philippe museum in Geneva.
Focusing on the watch’s rarity and the difficulty of procuring one is an unusual marketing strategy, but one that should prove successful for the brand. In addition to spurring interest, it will also lead to increased publicity, which will help the brand in promoting other products. The watchmaker shared links to articles about the Grandmaster Chime on its Facebook to ensure that consumers are aware of the new timepiece and what is required to purchase one.
“I think the interviews will help sell the watches,” Mr. Ries said. “If you are spending $2.5 million for a watch, you might also like to tell friends about your visit with the chairman of Patek Phillippe.”
Image of Grandmaster Chime below, link to article here
The Swiss Have Finally Started Making Smartphones (article)
Everyone’s been waiting for it, and now it’s happened: The Swiss have finally entered the smartwatch fray. Coming only a few weeks after Swatch announced it will release a smartwatch to compete with the Apple Watch, a new Swiss company called Manufacture Modules Technologies (MMT) has introduced a line of smartwatches made in Switzerland. MMT is a joint venture between Silicon Valley wearable-technology company Fullpower Technologies and Union Horlogère Holding, which owns Swiss watchmakers Frederique Constant and Alpina. You might think you haven’t heard of Fullpower’s MotionX technology, but it’s what powers your swanky Jawbone and Nike wearables. MMT was created specifically for this project and is headquartered in Geneva, allowing it to market the watches as officially Swiss.
Before the end of 2015, MMT will release 10 different models under the banner Swiss Horological Smartwatches. These will be split between the Frederique Constant and Alpina brands and will include models for both men and women. The details have been made available for only two models, one from each brand, and the remainder of the collection will premiere at the Baselworld trade show in March. Watches will go on sale in June, and prices will start at $995. The gold-plated Frederique Constant model will retail for $1,295. Mondaine, best known for its Swiss Railways watches, is the first third party to take advantage of the MMT technology.
Looming over all of this is the multibillion-dollar question: Is this the kind of smartwatch people actually want?
Link to article here
Breitling Connects Chronograph with Smartphone (article)
The brand said that since the main assets of a smartphone are its screen and ergonomic interface, B55 wearers can use their phone to perform certain adjustments on the watch, like time-setting, time zones, alarms, display and operating parameters such as night mode. Users also can upload the results of various measurements--such as flight times--from the chronograph to the smartphone, allowing them to store the information, share it or read it more easily.
Link to article here
World Watch Report 2015: (study)
The leading luxury watch market research since 2004. The WorldWatchReport™ tracks and analyses the desirability of brands across the world. The report covers 62 brands in 5 categories, 20 countries, 11,000 models & collections, & over 600,000 online searches.
- Global interest in timepieces has grown by 10 percent between 2013 and 2014.
- Affluent Asians accounted for 68 percent of global growth of interest, with China, despite its economic slowdown, leading growth.
- In past years, the BRICs have seen significant interest in fine watches, but the World Watch Report found a decrease in interest among consumers in the Brazilian, Hong Kong and Thai markets. Likewise, China still leads the interest growth with an increase of 14 percent from the year-ago.
- As in year’s past, China is the number one country and leads interest in Haute Horlogerie surging by 41 percent. It is important to note that the surge occurred in a country already number one in Haute Horlogerie searches, meaning that Chinese consumers account for 41 percent of total global interest in the category.
Snapshots of findings/commentary below, link to slides of study findings here, link to study here
-----THE APPLE WATCH-----
Five Facts About The Apple Watch (article)
- There are three collections for the timepiece: Apple Watch, Apple Watch Sport and Apple Watch Edition, which includes timepieces in custom alloys of 18-karat yellow or rose gold. It is available in two different sizes, 38 and 42 mm, with retail prices starting at $349. It will be available to consumers in early 2015.
- Cook said the watch is synchronized with the Universal Time Standard and is accurate within plus or minus 50 milliseconds. It is battery powered and charges using a system that combines Apple’s MagSafe technology with inductive charging.
- It is a smartwatch with many functions. Wearers can reply to text messages on their Apple Watch using Smart Replies (common, built-in quick responses) and dictation, or use Handoff--Apple’s capability that transfers user activities among multiple devices associated with the same user--to start a message on the watch and finish it on an iPhone. It also answers calls to the iPhone and has an Activity app that can measure calories burned, brisk activity and how often the wearer stands up during the day, among other things.
- Apple Watch is also an “incredibly customizable” device of many faces. Apple Watch has 11 different dial options, including a chronograph; “Astronomy,” which has a real-time 3-D model of the Earth, sun, moon and planets; and Mickey Mouse, with the cartoon character’s outstretched arms indicating the hour and minutes. Each watch comes with all 11 faces and they are customizable; wearers can change the color scheme, choose design elements and add functionality. It also has sapphire glass over the dial and exhibition caseback.
- Apple Watch comes in a number of different finishes and straps. It’s available in gray and “space black” stainless steel, silver or “space gray” anodized aluminum, and a custom 18-karat rose or yellow gold alloy. There also are a variety of straps available for the timepiece, including a stainless steel mesh, a stainless steel link bracelet and leather which are interchangeable.
Link to article here
No, the $10,000 Apple Watch Will Not Be Your Family Heirloom (article)
Historically, when a person spends thousands of dollars for a piece of jewelry — and let's be honest, as tech-powered as it is, the gold Apple Watch Edition counts as jewelry — they also expect to be able to hand that item down to a family member in the future.
However, in the case of the Apple Watch, even with such a high price tag, the basic value of the device, in terms of technological functions, will plummet in just a couple of years. Sure, you could hand down a $10,000 gold Apple Watch to your kids in 10 to 15 years, but by then will we even still be looking at flat screens on our wrists, much less using the same kind of software architecture that powers the Apple Watch?
Link to article here, image below of one of our favorite social media comments on the subject :)
Apple's Watch Hasn't Impressed the Fashion World (article)
Members of the style establishment, in Paris for shows from the glittering likes of Chanel, Givenchy and Hermes mostly said they saw the watch as a gadget, not this season’s must-have accessory.
“You have to understand. We are luxury brands, and [the Apple Watch is] more technology,” said the salesman at Printemps, which carries such brands as Rolex, Montblanc and Longines.
Link to article here, video of style variations & interacting with user interface below
Programmatic Can Be More Premium Than Direct For Luxury Marketers (article)
You don’t need to consult the leading voices in the digital advertising industry to know that programmatic ad buying has altered the way forward-thinking brands find and engage new audiences at scale. Programmatic has proven to be a tremendous asset for brands to find their target audiences, wherever they happen to be on the web.
But not everyone is talking yet about how programmatic is uniquely positioned to transform the way a campaign can deliver dynamic, engaging brand integrations for very specific luxury audiences. Or how custom ad integrations (e.g., takeovers) and truly high-impact ads that are well suited for luxury marketers, can be scaled for Real-Time Bidding (RTB). The transformation is underway, and it’s changing the way marketers and media buyers have traditionally thought about premium advertising.
Link to MediaPost Engage: Affluents article here, older yet relevant article in eMarketer on programmatic's premium future here
Unlock the Power of Programmatic Through Dynamic Creative (article)
Ensuring the right creative is in sync with data insights is where creatives and digital marketers can really make their mark. Wayne Blodwell, UK Head of Programmatic, talks to The Drum about creative agencies using programmatic in their work to unlock its full potential.
Link to article here
Programmatic Print Buying (article)
The nation's largest magazine publisher -- owner of People, Time, Sports Illustrated and InStyle -- is letting marketers buy print ads with the same automated technology used to buy digital ads. This type of deal, where a computer facilitates a transaction, is referred to as programmatic ad buying.
Programmatic ad-buying is a booming practice among digital marketers. Nearly $15 billion worth of digital advertising budgets will be spent using this technology in 2015, according to an eMarketer forecast. That represents 55% of all the money spent on digital display ads in the U.S.
Link to article here
Programmatic TV Buying (article)
Oreo & Ritz mark first super bowl ads to be purchased programmatically, ad spots considered game changers.
One of the benefits of programmatic TV is that the advertiser gets analysis of those views within 24 hours. "So if you're running spots across 150 designated marketing areas in the U.S., you know the next business day exactly what ran," Mathewson said. "Otherwise, you won't know until the invoice is received by your ad agency 30 to 45 days later."
Link to article here
-----iPROSPECT POVs & NEWS-----
iProspect 2015 Client Summit: May 12-14, 2015
This year's theme is "Redefining the Digital Relationship." Passionate experts will present content sure to inspire you to capitalize on the impact of digital rooted in a deep understanding of human behavior.
As you've heard or experienced, iProspect takes great pride in paying special attention to your experience while at our Client Summit. This year is no exception. Nestled in the Smokey Mountains, Asheville is well-known for its world-class food, burgeoning beer scene (offering 100+ local brews) and thriving artistic community. Our host hotel, the Grove Park Inn, was recently honored by Conde Nast Traveler as one of the "Top 25 Best Resorts in the South."
Will you be our guest? Summit event passes are complimentary for our clients. Register today! Hotel reduced rate expires 4/10. Link to sign up here, Client Summit portal filled with agenda and speaker details, hotel resort information and past party pictures here
The Truth About Performance Content Marketing (Whitepaper)
You might be forgiven for considering "content marketing" a buzzword. It's getting a lot of attention in digital media, and with good reason. The truth is, content marketing isn't new at all—it's been a part of traditional advertising for over 100 years. But, there's a big, expanding digital universe out there. The number of channels on which brands communicate today is only increasing, and marketers are under more pressure than ever to create quality content at a rapid pace.
Developing content is critical, but it only delivers a return on investment if it is relevant to the audience, accurately measured, and ultimately drives the desired consumer behavior. The true value of content marketing isn't only in the polished product we distribute, but in the way customers engage with it. Is it relevant? Does it solve a problem, encourage a laugh, or stir an emotion? Is it integrated across every digital platform? Is it successful at driving the desired customer behavior and delivering against real business objectives? Or, is it unfortunately just content for the sake of content?
In our latest white paper, The Truth About Performance Content Marketing, we have identified the 4 essential steps for successful content marketing. We invite you to read and share this insightful piece as we unpack the strategies and tactics required to create, amplify and measure content that truly performs.
Link to whitepaper here
Instagram's Carousel Ads (article)
On March 3, Instagram rolled out a new ad format called Carousel Ads, which allow marketers to present multiple images in one scrolling ad-unit, giving users an opportunity to click through to a website and learn more about what they’ve seen. These ads encourage audience engagement and it’s a big change for Instagram: it’s the first format to allow the user to click-through to an off-site experience. It fundamentally changes the way marketers should approach Instagram when strategizing for their brand.
Link to iP blog post here; link to Instagram's blog post here; video of carousel ad in action below.
Facebook Introduces Dynamic Product Ads (POV)
With this introduction of Dynamic Product Ads, Facebook creates a massive opportunity for retailers who invest in product feed programs and social media. They will be providing consumers with advertising that is more relevant. With FBX, consumers that shop products on participating websites or apps will see product ads appear in their news feed. However, with DPA, the increased level of targeting and content customization allows marketers to maintain control over real-time optimization across audience segments. This ensures that the advertising consumers receive from brands and merchants are more relevant to the products they are interested in purchasing.
iProspect is uniquely positioned to drive success for our clients with this new product offering since it brings together two of our specialisms into one cohesive solution: Structured Data & Feeds and Paid Social Advertising.
Learn more about how this impacts marketers, the consumer and how to make the most of this exciting innovation in the social commerce space.
Link to POV here