There is a gap between the luxury world and the mass consumer world.
Advertising dollars are shifting away from expensive, TV-driven campaigns to a newly authentic online advertising environment. And it’s impacting brands on both sides of the aisle. The latest Brand Value report from Econsultancy and Bain & Company shows luxury brands have suffered a huge fall in brand value over the past four years. Meanwhile, in a world where brand loyalty is lacking, new purchases are being made increasingly on the word of mouth of an individual who tells his friends.
So it’s imperative that brands know how to interact with this new world. Chris Horn, President of PopCrunch explained, Luxury brands like Beats by Dre and Nike continue to thrive despite the recession, in part because those who possess them are confident that there is a market for them. However, there are certain brands where they really need to keep their head down, or they could lose out on the huge opportunity to engage with the most dedicated fans.
Alignment between products and consumers has an impact on the way premium brands communicate with each other. The real world around us is no longer in black and white, and it doesn’t do companies any good to operate in a vacuum. Kevin Courtney, CEO of Graphicdesigntrade.com explains, The fact is that pricing, quality, packaging, and services are subjective to the particular brand. Don’t forget that Facebook pages and Instagram are now a daily part of many people’s lives, so consumers are increasingly savvy. Consequently, social is now beginning to see a real uptick in commerce traffic, and brand interaction patterns on social media are affecting what people believe about brands.
There’s a high level of respect in the virtual world for brands and products. Quite simply, they don’t care. This can be challenging for luxury brands that rely on advertisers and have invested a lot of money to build a narrative around their brand. But it’s inevitable that as branding continues to become more important, offline and online interactions are going to become more important in the development of the overall consumer experience.