3 Takeaways from R3’s "Digital Performance in Luxury" Report

By Morgan Strawn

In its new report, "Digital Performance in Luxury," R3 observes that "luxury marketers have to balance their traditional foundations with new market dynamics that reward mass relevance and immediacy."

The report elaborates by examining how the luxury industry should respond to the pressures exerted by e-commerce and the ongoing process of digitalization. Three key takeaways from the report follow below.

  • E-commerce: To maintain the aura of exclusivity around luxury items as they're advertised online, R3 recommends omitting ordering information for the items, explaining, "Those who can afford to spend more than a hundred-thousand dollars on a Birkin Bag will know to visit a Hermès retailer or contact a brand representative for more information."

    A price range may be indicated, and R3 advises including photography that makes it easy to ascertain product features like size, e.g., in relation to a model's body.

  • Personal data: R3 suggests that the high-net-worth individuals who shop for luxury goods are even warier with their personal data than everyday consumers. Thus, "how personal data is collected, used, and stored by luxury brands has a greater impact on overall brand perception. Many luxury brands have begun shifting focus toward collecting zero- and first-party data to build their own data pools and manage the quality and integrity of information collected."

  • Digitized resale markets: Luxury brands have long resisted entering the resale market, fearing that doing so would diminish brand value. But technology provides the means to both stoke the second-hand market and regulate it to avoid the proliferation of knockoffs. TikTok has demonstrated a powerful ability to boost the value of products promoted on its site — e.g., with the hashtag #guccijackie1961 — and numerous brands have begun using QR codes to authenticate their merchandise.

R3's full report is available for download here, where readers will find numerous, illuminating case studies.

The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

Morgan Strawn is a senior manager of editorial and content development at ANA.