How Influencer Marketing Pays-Off For Luxury
ORDRE breaks down how luxury brands and retailers can maximise on influencer marketing to drive engagement, customer loyalty, and sales.
There are no two ways about it – the persuasive power of influencers can no longer be ignored. Thanks to their ability to engage large audiences and often outperform advertising campaigns, brands and retailers are increasingly realising the gains in using the trusted voices of key opinion leaders (KOL’s) in lieu of traditional marketing strategies.
Data analytics firm Launchmetrics estimates that in the US alone, up to 80 percent of fashion brands are working with influencers in 2019. Instagram is by far the most relevant channel. In fact, the social platform’s global KOL market is predicted to be worth a staggering USD$2.38 billion by the end of this year.
The app is maximising on its massive audience reach (roughly 1 billion users worldwide as of March), rolling out a number of shopping features in recent years like shoppable posts and stories. Now, it’s tapping influencers too: on 19th March, users in the US were introduced to a new checkout feature, allowing them to purchase products directly from a brand or KOL’s page without being redirected to an e-commerce website – celebrities like Chiara Ferragni, Gigi Hadid and Kim Kardashian West are among the first to take part.
Below, ORDRE takes a look at why influencer marketing is proving successful and how brands and retailers can make the most of this dramatically profitable opportunity.
Brand Alignment is Essential
It's easy for brands to be seduced by influencers with large volumes of followers because it increases the probability of reaching potential customers. But a less targeted strategy also means campaigns are likely to fall on deaf ears. Thus, understanding a KOL’s audience and placing importance on their brand fit is crucial.
According to a 2019 report by Launchmetrics, The State of Influencer Marketing, brands prefer to work with micro influencers (10K-100K followers), believing they are more cost effective but also have better connections with their target audience. This differs slightly in the luxury sector, where the majority of professionals opt for mid-tier (101K-500K followers) and all-star influencers (more than 2M followers), as they value strong content quality as well as authenticity.
One good example is Fendi. In 2017, it launched F is for Fendi, a KOL-focused platform dedicated to millennial consumers. The latest campaign in New York saw the brand enlist model Hilary Rhoda (291k followers) and industry insider Coco Rocha (1.3m followers) to create video and imagery content highlighting Fendi’s Autumn accessories assortment. The triumphant collaboration reached 3.6M people worldwide with over 8.8M impressions on social media - increasing brand engagement by an impressive 93 percent.
Focus On Product Placements
While traditional marketing methods still have their place within the fashion ecosystem, it is clear that brands and retailers can reap rewards from the influencer phenomenon if they embrace it – the trick is finding the most effective fit and strategy that aligns with your brand’s values. Launchmetrics suggests product placements (of sample loans and gifts) across social media work best, particularly when authentically embedded in content that audiences are bound to engage with.
Product launches and events are equally important. During the major SS’19 fashion weeks, Launchmetrics noted influencers racked up more than half of the global Media Impact Value (MIV) – an algorithm developed by Launchmetrics to measure the impact of interactions across numerous social channels – generated for the season, reaffirming their powerful impact on fashion events.
The Value of KOL’s
Justifying the return on investment (ROI) of collaborations with key opinion leaders is often a tricky endeavour. Measuring tangible elements like sales growth is easy, but placing a monetary value on the buzz generated by influencer campaigns is less straightforward and difficult to quantify. Many companies work with them for brand lift even if it doesn’t necessarily translate into immediate sales. The report states that more than 90 percent of brands believe that their collaborations have effectively amplified awareness, while 76 percent of brands say their sales have mushroomed as a result of their partnerships.
Interestingly, the 2018 nuptials of Italian mega-influencer Chiara Ferragni is a prime example of how KOL’s can cultivate significant financial return for brands: Launchmetrics’ data reveals that the three-day event sparked over 67 million interactions across social media, and contributed USD$36 million towards luxury brands, including US$1.8M for Prada – which designed her bespoke reception dress – and US$5.2M for Dior – which created her bridal gown. Given this, the industry will undoubtedly see many more happy pairings in the future, as luxury continues to tap into the seemingly unstoppable legion of KOLs.