“Luxury brands need to be more flexible”

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Maya Bou Ajram, Business Unit Director for LVMH at OMD, says today consumers of all ages want luxury brands to offer a seamless and relevant experience, delivered at the right time, across all touchpoints

What’s your take on what’s happening within the luxury market in the region, both from the creative, as well as the business perspective?

The market is definitely slowing down, which is unsurprising when you consider how the MENA market currently looks across all categories and sectors.

The double-digit growth we have previously experienced is now a thing of the past, but there is still growth within luxury, it’s just happening on a smaller scale.

So, how are brands coming up with their marketing strategies to face this decline in sales?

It begins with a consumer-led approach. Brands need to make a connection with the purchaser, understand what it is that drives them and use this data to create personalized communications.

While we have seen increased investments in digital because of the amount of time we now spend online, this isn’t the only driving factor for strategies. Today, consumers of all ages want luxury brands to offer a seamless and relevant experience, delivered at the right time, across all touchpoints.

Does the shift to digital mean that traditional marketing will lose relevance for luxury brands?

Not exactly. Despite the rise of digital media, consumers still spend time on traditional media, such as TV and print. However, the way they consume media has changed. Technically, the media fragmentation has intensified, which means consumers are spending more time with more media channels.

Having said that, each media channel offers different consumer experiences. If consumers spend four to five hours a day on mobile phones, it doesn’t mean that brands need to shift their entire media strategy towards mobile.

Luxury brands need to become more flexible and holistic in their approach, utilizing new technology to enhance the consumer journey, not replace it.

In their strategy to target the right consumer, is going digital backfiring for some luxury brands giving the expected ROI?

This is a very simplistic view to take, as digital is only one aspect of a luxury brand’s media strategy. It’s rash to assume that luxury brands are failing in digital or that brands have totally ignored offline media.

Despite the rise of digital, TV still commands the biggest share of ad spend by beauty brands, while print has the lion share of ad spend from fashion brands.

Having said that, for many luxury brands, digital is giving a good ROI on average. It’s not just about the digital strategy as such, but also about whether brands have the right product, the right communication balance across different media channels (from in-store to print to digital) and whether they are resonating in an impactful way with consumers. If they get all these factors right, their digital strategy will give a positive ROI. It’s only when the journey is disconnected that the ROI is negatively impacted.

Does going digital raise the fear that brands will erode their exclusivity?

Adopting digital into their communication tool kit is a natural step for luxury brands to take, as they are evolving in-line with consumer behavior. There will always be ways for them to retain exclusivity, even if they adopt digital.

Online is an effective channel to drive in-store purchase, but globally, the share of online to offline sales is barely at 10 per cent – a clear indicator that online can never replace the in-store experience.

The interview is part of the cover story that appeared in the November 2017 issue of Gulf Marketing Review.