Whether it’s Balenciaga’s Triple S, Dior’s saddle bag or Gucci’s Double G belt…
… luxury retail is booming and the appetite for high-end merchandise is bigger than ever. Based on the annual report by Bain & Company, the global luxury market grew with 5% compared to 2016, to nearly € 1.2 trillion. With Europe having regained its position as the top region for luxury sales by value, the UK plays an important role in holding that position. According to a study by Savills, London is the most attractive city worldwide for luxury investors and is accountable for 5% of global luxury store openings in 2017.
Interesting to point out is that wholesale remains to being the dominant channel for luxury goods and with online sales increasing with 24 % annually, retailers like Net-a-porter, Matchesfashion, Farfetch & co. are the go-to place for luxury consumers. Having such a big impact on the luxury market, we’ve taken a look behind the scenes and analyzed the marketing strategies of the UK’s main luxury retailers: Matchesfashion, Net-a-porter, Farfetch, Mr Porter and Dover Street Market
Our team of data scientists put our proprietary algorithm to use and crunched the numbers. Below, you’ll find out which UK luxury retail brands ranked highest in audience-driven Media Impact Value and also gain insights into the “voices” that generated value for them.
How do UK luxury retail brand generate value?
As you can see in our infographic below, nearly 70% of the voices are coming from media. That means the greatest value is still generated via mentions in print or online magazines, followed by 19% of owned media aka the retailer’s own online channels and social media. Compared to fashion and beauty brands, UK luxury retail brands have a quite low voice split when it comes to influencers (about 6%). However, top influencers in the UK luxury retail sector are fashion mega-influencer Leonie Hanne and Italian fashion journalist Anna Dello Russo who are both loyal brand ambassadors of luxury e-tailer Net-a-porter.
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Looking at which UK luxury retailer won the share of voice battle according to our Media Impact Value, Matchesfashion is on top with an MIV share of 38% ($ 9.2 Mio), closely followed by Net-a-porter with 34% ($ 8.2 Mio). Check the infographic below for all the numbers.
As every luxury retailer is different from each other when it comes to the products they’re offering, their individual marketing strategies differ as well. From different channels to different voices, we’ve analyzed where and how the above-mentioned retailers are generating the biggest value.
Before we dig deeper into the voices driving value for the UK luxury retail, we took a look at the channel split according to MIV. Standing out immediately is that online media nearly accounts for more than 50% of generated value for all brands. Which brings up the question: Are luxury retailers are struggling to diversify between sources of coverage?
Print still plays an important role for brick and mortar retailers like Dover Street Market, and quite surprisingly for Matchesfashion as well, generating 26% of voice value there. While Instagram is the most prominent social media channel for all 5 of the analyzed retailers, the men luxury e-tailer Mr Porter has a noticeable lower focus than the rest and rather focuses on Facebook equally (the best post coming from Hype Beast and bringing an MIV value of $14K). Standing out is also Net-a-porter who generates more value on Youtube than the other luxury retailers. The biggest impact on that number has Zoella’s video with over 1.2M views where she’s mentioning on of Net-a-porter’s products in the caption. Which brings us to the next point…
Who are the voices generating value for UK luxury retailers?
As mentioned earlier, media is still the main value generator for all UK luxury retailers, followed by owned media. However, if we take a look at Matchesfashion, we see that the percentage of owned media voice MIV percentage (9.84%) is lower than the Partner voice (13.3%). This in mind, it’s safe to say that Matchesfashion is doing well in partner activation, with the top post (MIV value $103K) coming from streetwear label Vetements. When it comes to the industry’s hot topic “Influencers”, Dover Street Market scored highest, with a total voice of 8.22%. The reason why this is higher than compared to other retailers’ could be that Dover Street Market has a physical store where influencers can tag their location.
Summing up, each UK luxury retail brand worked out a different marketing strategy for themselves. Click through our slideshow and discover all the stats behind them and find out more about the voice split for each retailer.
Got curious about the world of luxury retail? Then you might want to check out our #FashionTalks podcast with Caroline Volz, Assistant Buyer at Bergdorf Goodman. Get insights into how technology shifted the retail business and find out how to grow your fashion network.