ContactlabContactlabAugust 2, 2016
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5min1247

ContactLab and Exane BNP Paribas’ study revealed that tourists buying luxury products account for around 30 per cent of worldwide revenues.

Latest touring figures revealed that 36.7m people are forecasted to visit the UK in 2016[1]. This highlights the value which luxury travellers bring to visiting countries in terms of the money they contribute to brands’ revenues. The Nationality vs Geography: the Real Nature of Luxury Goods study produced by customer engagement specialists Contactlab in conjunction with Exane BNP Paribas, found travellers are spending more abroad. Travellers purchasing luxury goods abroad account for around 30 per cent of worldwide revenues. The report highlights how travellers spending patterns are shaping the luxury brands industry and why retailers need to use this opportunity to engage with tourists during the busy summer period.

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Massimo Fubini, CEO of Contactlab, comments:

“Summer is the season when many people are going abroad to their favourite destinations. Luxury brands need to leverage this opportunity in order to get in front of these tourists to influence their shopping decisions. Luxury travellers account for around 50-80 per cent of heritage countries’ revenues. Luxury brands are being gifted with customers from abroad who are adding an additional stream of revenue to their domestic customers, which should not be ignored”.

Most “new economies” have around 30-40 per cent of clients buying luxury goods abroad, with the exception of Russia which has travellers who spend around 70 per cent abroad. The report focuses on the purchasing habits of tourists in different countries such as Russia, China, Taiwan, India, Brazil, and Mexico. One factor which influenced the revenue each country received from these tourists was based on the number of traveller going out of the country vs those coming in. For example, the UAE/Gulf region had a balance outflow/inflow of luxury travellers. The Gulf region is uniquely positioned with very significant luxury travellers’ coming into the country from Far-East/Russia and an outflow to Europe.

Russian, Brazilian, Chinese travellers generally spend more abroad. American and Japanese have balanced outflows and inflows, and have prevalence of domestic clients. European countries seem more conservative, with a very low outflow of money for luxury shopping but a very big inflow from luxury travellers. Many travellers visited “heritage countries” such as Italy, France and Spain due to factors such as their luxury heritage, tax differential and close-to-parity Euro-Dollar FX.

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According to the Contactlab-Exane report, Chinese travellers are still dominant and stable, accounting for around 50 per cent of total travellers. In comparison, Russian and Brazilian travellers’ overseas spending decreased whilst US, Korean and Taiwanese abroad purchases continued to increase.

Massimo Fubini, continues:

“Overseas spending is carving a big share of the revenue for luxury brands. The choice for spenders to purchase both in their home countries and abroad opens up avenues for brands to explore, but they need to ensure they are able to recognize their clients to offer them a real value wherever they are.”

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ContactlabContactlabMay 11, 2016
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6min3899

Customers demand a more personalised and targeted email from luxury brands

The Dawn of Luxury CRM: Email do’s and don’ts study which was produced by customer engagement specialists ContactLab in conjunction with Exane BNP Paribas, revealed how luxury brands can better engage with their customers through email. Cartier and Burberry overall lead in the Email Competitive Map with the majority of the luxury brands not recognising the potential for effective email marketing. The overall Map exploitation was just above 30%, a bit higher for Email Proficiency (34%) than the Email Strategy (28%) (Figure 1).

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ContactLab point out that overall there is good performance on email localization (key languages) and structure (composition, visualization). However there is still little integration of emails with E-Commerce and Cross-Channel services, and the contact plan being quite unbalanced (too commercial) and insufficiently segmented. Emails are an integral part in any marketing strategy and should be carefully designed and distributed in order to cater to the needs of the consumer.

Digital does not only include email marketing but this is one aspect of the whole ecosystem and must be considered, since the impact of digital engagement can translate into a 40 per cent increase in revenue for fashion and luxury brands.

The ContactLab and Exane BNP Paribas research focused on 30 brands, looking at the US market for Account Registered (non clients) and Email Subscribers (non clients) between July-December 2015. There was also specific focus on the Italian market regarding differentiation in contact flow among Clients vs. Account Registered (non clients) vs. Newsletter Subscribers (non clients). The Email Competitive Map analysis was based on 8 Categories, 14 Criteria, 62 Parameters.

The study revealed how brands are designing and distributing their content according to different customers. Customer expectations have evolved and they expect content to be bespoke and tailored to their own needs. Dolce & Gabbana are in the lead followed by Armani in addressing customers according to gender/ title. Having said this, the full segmentation potential goes widely untapped with very few brands asking for ZIP code (offering geo segmentation potential) and content preferences such as beauty, fashion, jewellery etc.

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Further analysis revealed how 20 brands did not differentiate content by gender or between clients and newsletter receivers like Hermes and Brunello Cucinelli.

Marco Pozzi, author of the research comments:

Brands need to be more strategic in their use of email marketing and recognise that consumers are more demanding than ever. If content does not cater to their needs, their impression of a brand will be lowered and will eventually unsubscribe. Email marketing offers the opportunities for brands to receive large amount of traffic through portable devices like smartphones and tablets. With the modern customers having an overload of content and often bombarded with emails, brands need to ensure the emails they distribute are relevant and thus capturing the attention of the consumer.”

Top designers need to leverage the different services they offer and integrate Cross Channel communication through email marketing. In particular Cartier lead in Cross-Channel services, Cartier and Ferragamo tie for the lead in Actual Segmentation of contact flow, and Hermès with the most balanced contact flow mix (branding / commercial / store-focused).Overall there is very poor exploitation in email marketing apart from a “Link to Store Locator” option. Only Cartier included a “Book an Appointment” tab and only Burberry included “Collect in Store”.

Marco Pozzi continues: “The fact is that luxury brands have a lot more work to do in engaging their customer through email. Achieving customer segmentation will always be a challenge but there remains a lot of room for luxury brands to differentiate in their emails and create more personalised campaigns. Simply sending generic content and treating all customers as one does not build a relationship with customers. Customer shopping habits have changed and they expect an integration of different channels as part of the Omni channel experience.”

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