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Where luxury watch and jewellery brands once lagged terribly behind the rest of the business world when it came to digital innovation, they still lag — but much less than before. “The industry has improved remarkably as compared to other sectors,” says Scott Galloway, founder of business intelligence company L2.
Comparing progress since the organisation’s first Digital IQ Index in 2011, he says the march of digital innovation has been “slow but steady”: “When we first did our survey a quarter of the brands were selling online. Now those not selling online are in the minority.”
However, the findings for L2’s most recent survey of 66 brands in December 2015 show that most of these companies still lack advanced features wealthy consumers might expect.
When it comes to website features, the majority of brands are good at offering the basics, but only 18 per cent have sortable results and only 15 per cent allow you to initiate servicing online, especially useful for watch buyers.
Watch brands in particular need to worry about what comes up when a potential customer looks for them on Google or other search engines. Grey market sellers (non-authorised dealers) have been very successful at being seen on paid search results. Across watch brand queries, grey market channels control 38 per cent of the advertising real estate, compared with 17 per cent for brands’ own pages. For jewellery brands, the opposite is true.
Fabrice Paget, founder of the Luxury Brand Agency, based in London and Philadelphia, says prestige brands whose audience is a few thousand people worldwide may need to provide a segmented digital experience in the same way a luxury retail experience is divided, with private areas selling special items for VIP clients.
“It may be counterintuitive to established thinking but if my cheapest product is a ring at $40,000 I don’t want to talk to all people,” Mr Paget says. “[We need to] filter people away and create a different experience for my best clients. It’s a very different business model than a company selling a million bottles of perfume after a fashion show.”
The L2 data reveal that 75 per cent of “prestige” brands (such as Patek Philippe and Van Cleef & Arpels) actively promote assisted purchase options (online concierge services) on their website. The number drops to 57 per cent for less expensive “masstige” brands and falls to 35 per cent for “accessible” brands.
The importance to brands of using social media to create a community and engage both customers and admirers is clear in the report — although not all social media are of equal value.
Twitter, a text-based medium, has never been a major player for watch and jewellery brands: its share of social engagement has bumped along the bottom at 1 or 2 per cent for the past year and a half. In the meantime, Facebook has gone from Instagram’s near competitor to a distant rival: Facebook’s share has fallen from 44 per cent in Q3 2014 to 19 per cent a year later; Instagram, concurrently, has grown from 55 per cent to 80 per cent.
The total number of visits has also seen a fit of growth: 14.8m in Q3 2014 to 22.3m in Q3 2015 (a slight fall from the previous quarter).
In terms of brands who best use social media, there are some clear leaders. Tiffany & Co dominates both Facebook and Instagram, and its Instagram posts have over 34,000 interactions each, while the average from brands in the survey is 3,000. Overall, the top five brands on Instagram have 75 per cent of all the interactions. Nor is it ever too late to start. Rolex, the last company among those surveyed to move on to social media, now has one of the most robust presences among the brands surveyed, including the largest Facebook following of a watch brand.
The brands in the survey differ widely in terms of the type of image they project and the customers they attract. Galloway says this is why there is no single method to success when implementing a digital programme.
“There’s no such thing as a digital strategy,” he says. “You have a corporate strategy and digital is a tool to use to implement that strategy. No matter how big the brand, you have to pick your punches and do one or two things really well.”
Galloway adds that no matter the strategy, brands need to adapt quickly to an increasingly digital world. “Every time you hear a siren it’s an analogue person dying and a digital person being born.”