Luxury: sports, China, and diversification

In its quest for growth, the luxury industry is increasingly turning to influencer marketing to engage with discerning yet ever-changing consumers. A report compiled by Luxurynsight data analyst and Traackr, a platform specialists in influencer campaign management, reveals how brands have strategically tapped into the Chinese market in 2023. Moreover, they are increasingly capitalising on partnerships within the sports realm and broadening their scope across various fronts, including activations and influencers.

 
Analyzing 5,926 activations launched globally in 2023 by 58 leading luxury brands such as Chanel, Dior, Balenciaga, and Prada, the study encompasses diverse sectors such as fashion and high-end goods (ready-to-wear and leather goods, fragrances and cosmetics, watches and jewelry). These activations encompassed a wide range of initiatives, including product launches, communication campaigns, and in-store events.

Following the period of closure due to the Covid pandemic, the reopening of China in early 2023 had a significant impact on the industry, with an increasing number of Chinese consumers purchasing high-end products locally. In 2023, the total number of retail activations surged by 45%, “prompting luxury brands to bolster their local presence and invest in experiential retail to meet evolving customer expectations,” noted the study, while specifying that the trend slowed down in the second half.

Following the Covid-induced closures, the reopening of the Chinese market in early 2023 had a profound impact on the industry, witnessing a surge in local purchases of high-end products by Chinese consumers. The total number of retail activations surged by 45% in 2023, compelling luxury brands to enhance their local presence and invest in experiential retail to meet evolving customer demands. Although the momentum slowed in the latter half of the year, brands continued to invest in exclusive projects tailored to the Chinese market, particularly in the fragrance and cosmetics sector. Limited-edition product launches took precedence, with 59% of activations focusing on ready-to-wear & leather goods, 89% on beauty products, and 57% on watches and jewelry. Pop-up stores remained a popular retail format, accounting for 54% of initiatives in the ready-to-wear & leather goods sector and 82% in beauty.

Elevated exposure through sports

Additionally, collaborations between athletes and luxury houses emerged as a highly effective strategy.

“Luxury brands benefit from the global reach, authenticity, and appeal of athletes across all age groups, thereby enhancing brand visibility,” observed the report.

“Professional athletes, among the earliest influencers, have always embodied the image and personality of numerous brands. With the growing prevalence of influencer marketing, their impact is expanding. Such partnerships not only drive sales but also foster a deeper, more meaningful connection between products and consumers,” noted the researchers.
 

Recent examples of collaborations between athletes and luxury brands abound, particularly among LVMH Group houses gearing up for the Paris 2024 Olympics, where the group serves as a premium partner. Brands like Louis Vuitton, Tag Heuer, and Dior have forged partnerships with athletes, including British tennis champion Emma Raducanu. As the face of Dior and its new Lady 95.22 bag, Raducanu mentioned Dior on her Instagram account throughout the year, generating over 1.1 million engagements through posts and in-feed stories in 2023 and the first six weeks of 2024.

“The collaboration between athletes and luxury brands has evolved into a powerful marketing alliance. Luxury brands have long benefitted from the global reach and authenticity of athletes, as seen for years in the watch industry. These partnerships have now expanded to encompass more categories to enhance brand visibility among younger audiences and drive innovation and exclusive product lines, especially in the pre-Olympic period,” emphasized Jonathan Siboni, CEO, and co-founder of Luxurynsight.

The study also highlighted the flurry of activations centered around the skiing world.

“In 2023, luxury brands engaged in fierce competition to attract skiwear customers, with many creating strategic pop-ups in key cities, which increased by 50% compared to the previous year, and launching targeted campaigns.”

The winning recipe of culinary universe

This phenomenon aligns with the diversification strategy, which extends to influencer marketing, whether through initiatives in sectors beyond fashion and commerce or through new influencer profiles. The opening of restaurants and cafes, aimed at creating immersive experiences, fostering brand engagement, and attracting a broader audience, particularly saw a surge in 2023 (+229%).

According to the study, “Luxury brands are increasingly venturing into the culinary scene by converting struggling boutiques or commercial spaces into cafes or restaurants. This strategic shift allows them to strengthen their identity as lifestyle brands and capitalize on the growing trend of experiential spending. By offering short to medium-term customers a holistic brand experience through food and beverage offerings, luxury brands seek to build customer loyalty and create versatile destinations that foster local engagement.”

Among recent successes is the Prada Café located in the prestigious London department store Harrods, which proved to be a highly popular destination. With 471 influencers mentioning the café across 955 social media posts, this content generated over 1.5 million engagements and 25 million video views, particularly on TikTok, emerging the most engaging platform.

Furthermore, luxury brands are diversifying their talent and influencer search. For instance, they are enlisting celebrities and superstars for creative direction, as illustrated by the appointment of American singer Pharrell Williams as the head of Louis Vuitton’s menswear collections. The goal is to “redefine the brand’s narrative and appeal to a more contemporary audience.” Conversely, in the influencer realm, it’s no longer celebrities who are most sought after, but rather influencers with an intermediate level of prominence.

“While VIPs and celebrities continue to impact luxury brands, we see that an increasing number of fashion and beauty brands are diversifying the levels of influencers they collaborate with,” observed Pierre-Loïc Assayag, CEO, and co-founder of Traackr.

“VIPs are known to increase brand awareness, but mega and macro influencer segments are the fastest-growing segments, surpassing performance in engagement and sales. We will likely see luxury brands beginning to experiment with other types of levels in 2024 to enhance their ongoing partnerships with celebrities,” he concluded.