2012 trd report_final

THE LUXURY CONSUMER
IN THE NEW DIGITAL WORLD:
THEN & NOW
201 Four Seasons Luxury T
2 rend Report

Luxury Travel Trend Report | 1

The global luxury landscape and the luxury customer have evolved strong performance in China and Latin America, are driving growth
dramatically over the last tumultuous and transformative three in the sector. All combined, the global luxury market is expected
years. The advent of unprecedented new technological innovations, to grow by 10 percent in 2013, according to consulting firm
coupled with the increased skepticism left over from the global Bain & Company.
financial crisis, mean that today’s consumers are demanding honest,
accurate, timely and engaging information. They are looking for The luxury category encompasses a wide reach of products and
intrinsic value and a deeper relationship with the brands with whom services including apparel, furniture, restaurants, spirits and liqueurs,
they choose to support and interact. According to The Affluence watches and jewellery, and more. In the U.S., the luxury market has
Collaborative1, a research powerhouse that dives deep into the habits expanded tremendously over the last several years, from $1.2 trillion
of high-income consumers, the affluent2 seek out companies and in 2009 to $1.6 trillion in 2011, according to the 2011 Ipsos Mendel-
brands that can simplify and improve their lives. In the travel sector, sohn Affluent Survey Program4. While the U.S. will continue to be
this translates into increased expectations around personalization cut- the single most important market for luxury in the short term – due
ting across all touch points – including digital media platforms – as to its concentration of wealth and the propensity of Americans to
luxury travellers research, purchase, engage in and reflect upon their spend – China is poised to ultimately be the largest market for luxury
travel experiences. products and services in the near future. According to consulting firm
McKinsey’s Understanding China’s Growing Love of Luxury report,
The Luxury Traveller Technology Survey3, commissioned by China is on track to reach $27 billion, accounting for more than 20
Four Seasons, coupled with leading luxury market research and percent of the global luxury market.6
brand insight, sets out to uncover how consumers want technology
to blend seamlessly into their experience, and how those preferences
have changed in recent years.
LUXURY HOTELS BOUNCE BACK WORLDWIDE
According to Smith Travel Research (STR)5, 2010 saw an unprec-
TODAY’S GLOBAL LUXURY MARKET edented rebound in the global luxury hotel segment and since then,
nearly every global region has seen significant growth; this rebound
The world is truly global, and the luxury sector reflects this as brands has continued in 2011. In the U.S. alone, the travel category totalled
cross geographic boundaries to reach consumers all over the world. $137.3 billion in 20114. Most regions saw substantial increases in a
Moderate growth in the U.S. and European markets, coupled with key industry metric: revenue per available room.

CHANGE IN LUXURY CLASS HOTEL
Revenue Per Available Room (RevPAR) - Percent Change Vs. Prior Year

2009 2010 2011
Europe -21.8% 4.0% 18.2%
South America -14.8% 16.0% 14.4%
Asia Pacific -21.2% 20.8% 10.8%
North America -21.9% 8.7% 10.5%
Caribbean -22.3% 9.4% 9.5%
Central America -30.7% 16.3% 4.9%
Middle East & Africa -18.1% 2.5% -1.4%

Source: Smith Travel Research (STR) Global offers monthly, weekly, and daily STAR benchmarking reports to more than 43,000 hotel clients, representing over 5.7 million rooms worldwide.
The research firm provides information on key metrics including RevPAR (revenue per available room), ADR (average daily rates), and occupancy rates. www.strglobal.com.

2 | January 2012

2012 Four Seasons Luxury Travel Trend Report
The Luxury Consumer in the New Digital World: Then & Now

The year 2012 also promises to be lucrative for the sector globally. While
STR predicts that occupancy within the luxury sector will increase by a
TODAY’S LUXURY CONSUMER: more moderate 1.3 percent in 2012 in the U.S., key revenue indicators
HAPPIER… BUT MORE will continue to rise. The average daily rate (ADR) will increase by 5.5
percent, while the revenue per available room (RevPAR) will increase
DISCERNING by 6.9 percent. These numbers indicate that the luxury consumer is plan-
Who exactly is the modern luxury consumer? ning to travel more, in all markets. At Four Seasons, we expect to see
Specific definitions vary according to source a worldwide growth in revenue of 9.2 percent in 2012.
and geography but research group The Afflu-
ence Collaborative classifies the “affluent” Digital innovations play a key role in boosting consumer demand for
in the U.S. as having a household income of luxury travel by getting consumers interested and excited about the myriad
at least $200,000 and the “wealthy” have an of travel hotspots and experiences available.
income of more than $500,000. This general
definition transfers to other parts of the world
as well. THE DIGITAL AGE IN LUXURY

According to The Affluence Collaborative, the Against this backdrop of a rebounding global luxury market and a smart,
affluent and wealthy have a new gratitude for tuned-in consumer, the age of digital has taken flight, revolutionizing tradi-
their financial status, perhaps due to the refo- tional marketing and transforming it into customer engagement.
cusing of values that came with the challeng- And the luxury consumer is at the forefront of this revolution.
ing financial climate: 54 percent are happier
today than they were in 2008.
ONLINE REVIEWS
With this refocus of values, how do they want
luxury delivered? Internet users who
92%
read product reviews
Customization: 34 percent expect that prod-
ucts and services should be customized to Reviews influence 89%
purchasing decision
their needs and desires.
Source: e-tailing group conducts website mystery shopping on 100 ecommerce sites, fact-finding merchant surveys
and fields extensive online consumer research to understand what works for industry-leading retailers. www.e-tailing.com
True distinctiveness: 32 percent expect that
the company should be an innovator, suc-
cessfully rewriting the rules in their category. According to The Affluence Collaborative, 57 percent of the wealthy
stated that they like to have the latest gadgets and be in the know about
Constant exceeding of expectations: 32 per- what’s next in technology, compared to only 18 percent of the general pop-
cent expect surprise and delight; many ex- ulation. Seventy-two percent of the wealthy are active Facebook members.
tend that to once-in-a-lifetime experiences, They’re also using Twitter more often: Twitter usage increased by 350
and 25 percent expect to learn from the prod- percent year over year in 2010, and is expected to continue at this rate
ucts and services they buy. of expansion through this year.1

Today, consumers are savvier and demand accurate, timely and engaging
information. Thanks to review sites like TripAdvisor, Yelp, ActiveHotels,
Ctrip and Agoda, individuals have more influence than ever. Thirty-three
percent of Four Seasons’ guests around the globe rate TripAdvisor “very
to extremely influential” in their selection of a luxury hotel. The new Four
Seasons website is bringing those reviews front and centre; each of its 80-
plus property pages include customer reviews direct from Twitter, Face-
book and TripAdvisor. Where available, managers at Four Seasons hotels
and resorts use Revinate, an online review site monitoring tool, to respond
to guest reviews more quickly and comprehensively. Minimum operating
standards are in place at all hotels for 24/7 monitoring and response.


THE NEW WAY TO LUXURY-SPEND
Word of mouth has always been a key driver in consumer-
Conscientious spending replaces con-
decision making. But consider today what word of mouth
spicuous consumption. The affluent put
means – not just the opinions and experiences of family, friends
much more thought into their purchasing
and business colleagues but also the opinions and experiences
decisions to determine whether a product or
of anyone as evidenced by the explosion of social networking.
service will intrinsically improve their lives.
When Four Seasons asked survey respondents what makes
Companies need to consistently reinforce
them decide to stay at a certain hotel they haven’t visited be-
their value proposition to ensure their prod-
fore, the most important criteria cited was the hotel’s brand and
ucts and services are ‘worth the money.’
reputation and recommendations by friends, family, co-workers
and others – which many now solicit through social media
Money can buy time and experiences.
networks.
The strongest contributor to happiness for
the time-strapped wealthy is moments spent
Marketing has shifted
with loved ones1. Save wealthy consumers
dollars and resources toward digital chan-
CONCLUSION: nels across electronic, Internet, mobile and
time or deliver a memorable experience,
Luxury brands and you will have a customer for life. High-
social platforms. The return on investment
end fashion e-tailer Gilt Groupe has seen
should place for this kind of persistent, 24/7 communica-
tremendous growth because it makes shop-
tion for luxury brands is incredibly high,
a high priority and rivals more traditional, mainstream
ping easier and faster by delivering ultra-cu-
on monitoring rated products every day to consumers who
marketing methods such as advertising
don’t want to spend hours at a mall. Virgin
and respond- and print-based collateral. Beyond ROI,
Airlines makes the most of flight time with
companies simply must integrate digital
ing to review communication if they are to be successful;
onboard haircuts, manicures and massag-
sites and social es, and an onboard bar to make it all more
according to the book Socialnomics: How
relaxing.
networking Social Media Transforms the Way We Live
and Do Business by Erik Qualman, the real
sites to engage ROI of social media is that your business
Performance as status symbol. Luxury is
consumers in a no longer only defined by a brand’s status or
will still exist in the next five years.8
expense, but by the significance it brings to
two-way con- a person’s life. Consumers ask themselves
versation. CREATING A DIGITAL “How does this brand deliver on things that
are important to me?” before making a pur-
EXPERIENCE ON THE WEB chase.

Through new digital and social media, Consumer as Chief Marketing Officer.
consumers can now share more informa- Social networking has completely redefined
tion with their favourite brands so they in how consumers engage with a brand. Now,
turn can respond in a more relevant and it matters less what a brand says about it-
customized way. Improvements in technol- self; what matters is what people say about
ogy have enabled marketers to get to know a brand. Companies that do not cultivate
their customers better and have an ongoing a transparent, authentic conversation with
dialogue with them, allowing customers to their customers will perish. There’s no room
fully experience the brand – virtually. for smoke and mirrors in today’s socially net-
worked world.

4 | January 2012


Creating an interactive and compelling online world is paramount and Twitter. To support the brand’s integrated digital media
to a successful sales strategy, and a brand’s website is often the strategy, it’s optimized for mobile, and will integrate real-time
genesis of a consumer’s journey into this world. Tiffany search, video, blogs, news, Facebook, Twitter and more, that
& Co. created an integrated online campaign for its www. is regionally relevant, multi-lingual and culturally sensitive
whatmakestruelove.com launch that, along with its correspond- to appeal to a global audience.

SOCIAL MEDIA &
TRAFFIC THE LUXURY CONSUMER

Overall traffic to the Four Seasons Digital think tank L29 reported 78 percent
2011 30 MILLION of the affluent participate in social networking
website has increased by 10 percent
sites, with more than half using social media
from 2010 to 2011 to approximately 2010 to connect with a brand. Sixty-five percent
30 million visits per year.
of wealthy consumers believe that brands
that have no presence on social networking
sites are out of touch.
ing iPhone app, was designed to be a go-to resource for soon-
to-be-wed couples, with real-life love stories told on film and in Twitter, first launched in 2006, has grown from three to 100
photographs. The site features a short film by Edward Burns en- million users worldwide, quickly becoming the ‘conscious-
titled Will You Marry Me?; relationship advice; love song playlist ness of the planet’ and the primary mode of communication
recommendations and themed destination recommendations that in some countries. Facebook now has more than 800 million
link to Tiffany’s page on Foursquare. active users around the world. China’s popular social net-
working site, Weibo, now has more than 250 million users,
Likewise, the new Four Seasons website www.fourseasons.com launching just two years ago.
was designed with the luxury traveler in mind with the intent to
provide an immersive and effortless experience tailored to every At its core, social media is about relationships, and companies
guest. Since the luxury traveler is always connected, and using creating rich content that captivates consumers in relevant so-
multiple devices, the site has been optimized for a smart phone cial platforms will be those that thrive in the new Socialnom-
and tablet experience that delivers seamless hotel booking, desti- ics8 world. And it’s not just for the young – in all age groups,
nation content and social media integration. in both developed and developing markets, engagement with
social media is very high. According to The Affluence Col-
The participants of The Luxury Traveller Technology Survey, laborative, regular usage has doubled among the wealthy,
a representative group of global luxury travellers, reported that a group that is particularly fond of brands on social media,
the most important online activity to them while in transit to or and more than two times as likely to follow them. As a result
while staying at a hotel for business or vacation was review- of its growing popularity, innovation in the social media space
ing information on local area activities (59 percent). In fact, the is moving at the speed of light. Through today’s lens, the five
survey revealed guests spend an average of 18.3 minutes a day platforms below are the most powerful tools for engaging
researching online the destination which they are while in their with luxury consumers.
rooms. To meet this demand, every hotel and resort on the
Four Seasons site features custom information related to the
sights, sounds and tastes indigenous to the region or locale.
Online bookings rose by 10 percent from
The site is also rich in inspiration, with evocative photography 2010 to 2011. Revenue generated through
combined with amenity details and local destination information,
leveraging interactive components that give an even greater voice
online bookings represents 12 percent of the
to guests and advocates through a social media module where total, up from two percent five years ago.
they can read reviews and comments from TripAdvisor, Facebook


Facebook: Facebook has one of the highest levels of engagement Luxury brand Burberry used Twitter to engage its audience
among all of the social platforms, with 64 percent of affluent re- with something called ‘Tweetwalk’, which the company used
spondents having a profile. Traditional, high-end brands are taking to launch its Spring/Summer 2012 collection during London
notice of luxury customers flocking to Facebook. Manhattan-based, Fashion Week. Burberry tweeted backstage photos of each look
high-end luxury retailer Bergdorf Goodman launched a Facebook in the collection moments before its models stepped onto the run-
contest to crowdsource the design of its next Fendi 2Bag. Famed way. The company livestreamed the show on Facebook in high
car-maker Bentley, with more than 100,000 Facebook fans, keeps definition, giving fans an exclusive, up-close view made available
content fresh with a weekly user-generated Design-your-own-Bent- on iTunes’ on-demand service. The integrated approach created
ley contest and other promotions. a touchpoint with consumers and drove traffic to Burberry’s
website (several key looks in the collection went on sale online
Four Seasons recently enhanced its Facebook presence with new tools immediately after they were shown) and bricks and mortar stores.
and a refreshed design to provide visitors with compelling content
such as exclusive promotions for dining, spa and other services and The popularity of #luxchat, a live, interactive Twitter discussion
interactive touch points like a contest on Flickr for the best travel around luxury brands and social media in 140 characters or less,
photo. Between its corporate and individual hotel presence, containing is evidence of this. Examples of brands who have participated in
nearly 90 local pages, fans of Four Seasons total nearly 225,000, and the conversation, held quarterly, include automaker Infiniti, travel
are growing daily. accessory brand Tumi and global luxury source Robb Report.
In fact, Four Seasons participated in other popular travel chats
Twitter: Twitter’s luxury following is also growing, with 36 percent of including #FriFotos and #TTOT and used #luxchat to unveil its
the wealthy active on the site, up 350 percent in 2010 over 2009. The new website and this trend report in early January 2012. More
tool’s ability to provide consumers real-time access to luxury brands is and more luxury brands are expected to use this vehicle to make
making it a core digital media tool. For example, Four Seasons lever- major corporate announcements since it provides direct access to
aged Twitter for its winter spa campaign, providing unprecedented a broad luxury audience.
access to spa experts globally on #FSspa Twitter chats.

THE FOUR SEASONS DIGITAL MEDIA UNIVERSE
BLOGS & MICROSITES: Four
Seasons online magazine
(www.magazine.fourseasons.com),
the digital home of Four Seasons
Magazine featuring unique
content.The Have Family Will Travel
blog (www.family.fourseasons.com)
features real stories from customers
LOCATION-BASED SERVICES: Four Seasons
traveling with kids including recipe
was one of the first luxury hotel brands to leverage
and arts and crafts ideas, and links
location-based mobile and web services, such as
to related blogs. The Foodies site
Gowalla and Foursquare: when guests checked into
(www.fourseasonsfoodies.com)
Four Seasons properties during the “Best of
features blogs from world-renowned
California” promotion, they received “best of” trip
chefs. The “Foodies Around the

fourseasons.com
recommendations. When guests “checked in” with
World” section celebrates the unique
Gowalla at three or more “spot” recommendations, Google+: Four Seasons is
cuisine, fine wine and exotic
they received a spa or dining credit. establishing a presence on
mixology at Four Seasons hotels
Google+ to leverage its unique
and resorts around the globe,
capabilities and features.
with recipes and wine and cocktail
suggestions.

FACEBOOK: Four Seasons recently enhanced presence
provides compelling content such as exclusive promotions WEIBO: Four Seasons has an active
for dining, spa and other services and interactive touch presence on Weibo, China’s most popular
points like a best travel photo contest on Flickr. Fans total social network, with more than XX fans,
more than 223,305, and growing daily. and has launched an online magazine
site there. Over 250 million users

TWITTER: As the first luxury hotel brand to launch a corporate YOUTUBE: Highly curated content includes
Twitter account, Four Seasons follower base increased by more world-class surfing videos from its property in the TUMBLR: As a part of the Four Seasons
than 80 percent since August of 2010. Between its corporate Maldives at Kuda Huraa, best sights to explore at Spa campaign, a Tumblr page launched
and nearly 90 individual hotel streams, the company now has Four Seasons Hotel Marrakech and tours of aggregating all spa-related content around
nearly 185,900 followers. The company also participates in theatres and pubs in Dublin. Video views total FOUR SEASONS LIFE: First luxury hotel the globe using the #FSspa hashtag
Twitter chats including, #LuxChat, #FriFotos, and #TTOT. 280,000, 30 percent higher since last year. brand to create a Chinese lifestyle site. (www.fourseasonsspas.tumblr.com).

6 | January 2012


YouTube: As the number two search engine in the world, ence in six Chinese social media networks, and have uploaded
YouTube is quickly becoming a key luxury brand tool, exceed- more than 250,000 videos to YouKu, the Chinese version of You-
ing two billion views a day with 24 hours of video uploaded Tube. Burberry has also incorporated Youku within their robust
every minute. To leverage this audience, Four Seasons develops Chinese e-commerce offerings.
highly curated content for the site; video views total 280,000, 30
percent higher from this time last year. What’s Next: Google+: Google+ – a social site launched in the
summer of 2011 that appeals to a tech-savvy, early adopter audi-
Kate Spade uses YouTube to engage with fans on a brand- ence – is another digital vehicle that is perfectly aligned to the
relevant visual and aesthetic level, in tandem with other digital luxury consumer. U.K. luxury brand Burberry was one of the first
vehicles including Facebook, Twitter, and iPhone photo-sharing companies to leverage aspects of Google+ that aren’t available
site Instagram. Through short films on YouTube, inspirational on other social media sites, including video chats and animated
imagery on Tumblr, and colourful vignettes on its Behind the GIF images. Burberry has used the latter for the top graphic on its
Curtain blog, the brand moves beyond tweets and text and com- page that makes it look as if it is snowing on one
municates the DNA of the Kate Spade brand through images of its Burberry trench coat-clad models.
and colour. Kate Spade’s integrated approach has helped drive
triple-digit growth in its ecommerce business in 2011, according One key benefit of Google+ is that clicking on a company’s
to CEO Craig Leavitt. profile picture doesn’t bring consumers to a separate page with a
gallery of images as Facebook does, but rather lets the user scroll
Location-based Services: Location-based services are an es- through images without leaving the company’s profile. Burberry
sential part of the social media toolbox for many luxury brands, uses this capability to highlight campaigns for its diverse lines in-
and their popularity will continue to grow. Four Seasons was one cluding Burberry Prorsum, Burberry Brit and Burberry Children.
of the first luxury hotel brands to leverage location-based mobile The company is also using Google+ feed to promote its makeup
and web services, such as Gowalla and Foursquare for engage- collection, including solo product images and a makeup tutorial.
ment and promotional purposes. In 2011, luxury automaker Also, similar to Facebook’s “like” function, consumers can “+1”
BMW launched a highly successful integrated digital program a post or company page, in addition to sharing content with their
for its BMW i3 and i8. The campaign runs on Foursquare, social- Google+ social circle. Four Seasons has established a presence
news round-up site Mashable, and iAd, Apple’s mobile-advertis- on Google+ to leverage these capabilities and features, and many
ing network. When users check in via Foursquare at a location in luxury brands are expected to follow. Many experts think that
one of 30 cities, they get online tips and background information Google+ will be the next big thing, with its more intuitive ap-
on the area they are visiting. The location tips have a focus on proach and new features.
sustainability, electromobility, design and art. BMW contributes
weekly news for Mashable on the topic of mobility and technol-
ogy in the Global Innovation Series category. THE MOBILE REVOLUTION
The ability to create an instant, unique touch point with consum- The most profound technological breakthrough since 2009 is un-
ers means that the location-based concept is quickly spreading doubtedly the mobile revolution. From the iPad to the iPhone and
globally. Louis Vuitton, which has already used Foursquare for all tablets and smartphones in between, these tools have become
location-based marketing efforts in the U.S. and United King- a staple of everyday life. According to the Luxury Institute10, one-
dom, partnered with Chinese check-in service Jiepang to launch third of wealthy consumers own a tablet or e-Reader.
a similar experiment in Beijing for its travel exhibition at the Na-
tional Museum of China. Those who checked in to the exhibition
using Jiepang’s mobile app received a branded virtual badge and
a preview of Louis Vuitton’s profile page for tips and informa-
tion about the brand and conceptual design.

Social Media in China: Major luxury brands are developing a
China strategy to spread their social media presence within this
important and emerging market. Four Seasons has entered this
market with LIFE by Four Seasons lifestyle microsite and Weibo
launch in 2011. Other luxury brands such as Audi have a pres-


FOUR SEASONS REVENUE
Generated From Bookings Completed
From The iPad And Other Tablets
TECHNOLOGY & THE HUMAN TOUCH
As much as technology has enabled consumers to do more in
less time and access an infinite amount of information at the
200% press of a button, it’s important for luxury brands to retain the
GROWTH
human touch. There’s a time and a place for both high-tech and
high-touch, and a diminishing interest for everything going
mobile, such as the notion that a helpful, obliging waiter might
2010 2011 soon be replaced by an iPad.

According to the Four Seasons survey, travellers still value
This number is predicted to triple in the next xx years.
simple in-person interaction, particularly where it makes things
faster, easier and more comfortable. When asked how they’d
According to the survey, 71 percent of guests bring their iPhone prefer to be checked in for business and leisure, most said they’d
or smartphone and 61 percent bring an iPad or other tablet on like to be greeted either curbside or at the front desk and pro-
their travels. In the 2009 survey, stand-alone personal tech tools vided their room key, rather than simply checking in online or
such as iPods and personal DVD players were popular carry- at a kiosk. When asked what other technological amenities they
alongs, but all have seen reductions in popularity as the trend desire, they gravitated toward tech tools for more rudimentary,
toward integrated devices that do multiple tasks – such as play impersonal tasks and opted for more in-person assistance for the
music, email and Web browse – gain strength. This also mir- more complex: 78 percent of respondents cited touch-screens
rors what survey respondents told Four Seasons were the most in the hotel lobby to enable airline check-in and boarding pass
important in-room tech amenities: excellent cell phone coverage, printing as extremely or very valuable versus only 32 percent
fast WiFi, charging stations for multiple devices, power outlets by for the ability to check-in without having to speak with anyone.
bedside tables and wireless printing from a tablet or smartphone.
When used correctly, technology can actually enable the human
Many luxury brands are incorporating mobile tools into their touch: after a guest at a Four Seasons resort made a light-hearted
sales service strategy. Bergdorf Goodman – known for its tra- comment on Twitter about the hotel’s turndown music, she later
ditional customer service approach – gave iPhones to all of its received a bottle of wine and a note from the General Manager
salespeople so they could more effectively communicate with apologizing for the “Muzak” tunes along with a listing of local
their customers. Four Seasons arms many of its concierges and radio stations. When a guest lamented via Twitter that there
other guest-facing employees with iPads, to make responding to were no good movies on TV that night, the concierge pointed
customers more personal and interactive. Many hotels also pro- her to the hotel’s expansive DVD movie library.
vide in-room iPads for guests that didn’t bring their own.
Technology can also help promote education in an accessible
way. Through Twitter chats on various topics, Four Seasons
provides ‘virtual’ access to global experts on a range of top-
ics including health and wellness, wine appreciation and other
lifestyle interests.

8 | January 2012


HERE ARE A FEW OF THE
SHIFTS AND INNOVATIONS
THAT ARE ON THE RADAR
FOR FOUR SEASONS:
LOOKING AHEAD… THE FUTURE OF DIGITAL
Functionality and connectivity at the
point of need will be a basic consumer
TECHNOLOGY INNOVATION IN LUXURY TRAVEL
expectation in all aspects of brand inter-
A note from Susan Helstab,
action. Consumers own an expanding
Executive Vice President - Marketing, Four Seasons Hotel and Resorts
“family” of devices and services will be-
come more interlinked and fused.
If the last two years have seen such marked change, what will the future
hold? How will digital media fit into the larger picture of luxury brand
Mobile commerce, from the iPad and
marketing this year and beyond?
other tablets, will continue to grow sig-
nificantly in the next few years
The challenge that comes with digital innovations is deciding which to lev-
erage, and how to leverage them. Instead of launching one-off initiatives,
Social networks based on photo and
the most successful luxury brands are developing digital media programs
video sharing like Tumblr, Instagram
that are holistic, integrated and strategic. ‘Going digital’ really means
and Pinterest will become more and
authentically interacting with an audience through all of the platforms that
more popular.
make sense, in order to reach the luxury consumer in a way that is seam-
less, intuitive and enhances brand identity.
As social networking continues down
the mobile path, the dimensions of “lo-
One thing’s for sure: luxury brands that do not commit to a holistic digital
cation” and “time” will grow in signifi-
media strategy will perish. It is no longer a nice-to-have but an essential
cance.
pillar of branding and marketing. Consumers are giving their time, trust,
reputation and money to luxury brands; they should receive more than sim-
eCommerce in China will continue to
ply the product or service they buy in return. Digital media has the intrinsic
grow, surpassing other well established
power – today and 20 years from now – to deliver on that promise.
luxury markets and will continue to
spawn more widely-adopted social me-
dia vehicles, such as Weibo and Kaixin.

Since social media is now a widely-ac-
cepted, mainstream marketing modality,
companies will focus heavily on tracking
and measuring social media ROI. As a
result, more advanced measurement
tools and analytics will emerge.

Footnotes
1
The Affluence Collaborative is a flexible research model that offers marketers who focus on the affluent consumer a unique platform combining actionable insights, thought leadership, and community. www.affluencecollaborative.com.
2
Research group The Affluence Collaborative states the affluent are defined in the U.S. as having a household income of at least $200,000. This general definition transfers to other parts of the world as well.
3
The Luxury Traveller Technology Survey was distributed to more than 825 members of Four Seasons’ Guest Advisory Panel dispersed around the globe to explore how they want digital innovation to fit into their travel experience.
4
The 2011 Ipsos Mendelsohn Affluent Survey defines the affluent market as the top fifth of U.S. households based on current household incomes of more than $100,000. The travel category includes domestic and foreign destinations, hotels, airlines and cruise lines. According to U.S. Government statistics,
this select group of households accounts for approximately 60 percent of household income and about 70 percent of all net worth. www.ipsos.com.
5
Smith Travel Research (STR) Global offers monthly, weekly, and daily STAR benchmarking reports to more than 43,000 hotel clients, representing over 5.7 million rooms worldwide. The research firm provides information on key metrics including RevPAR (revenue per available room), ADR (average daily
rates), and occupancy rates. www.strglobal.com.
6
McKinsey’s Understanding China’s Growing Love of Luxury report can be found here: http://www.mckinsey.com/locations/greaterchina/InsightsChina_LuxuryGoods.pdf
7
e-tailing group conducts website mystery shopping on 100 ecommerce sites, fact-finding merchant surveys and fields extensive online consumer research to understand what works for industry-leading retailers. www.e-tailing.com.
8
American author Erik Qualman coined the term ‘socialnomics’ in his book, Socialnomics: How Social Media Transforms the Way We Live and Do Business.
9
L2 is a think tank for digital innovation and a membership organization that brings together thought leadership from academia and industry to drive digital marketing innovation. www.L2thinktank.com .
10
Luxury Institute conducts extensive and actionable research with wealthy consumers about their behaviors and attitudes on customer experience best practices. www.luxuryinstitute.com.
11
According to a Bain & Company report commissioned by Italian luxury producers.


2012 trd report_final

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