The Strategic Role of Brands in 2024: A Luxury Perspective
2024 seems like a year propelled by rapid evolution in the landscape of business. With technological advancements, shifting consumer behaviors and emerging market trends, the significance of brands have never been more pronounced. In this blog series “Business of Brands”, we’re going to look at why brands as strategic business tools are extremely important, specially in the Luxury sector.
Brands play a major role in shaping consumer perceptions and driving business, specially in Luxury. The State of Fashion 2024 report by Business of Fashion and Mckinsey & Company reveal the growing importance of Brand Marketing and Community Building in this sector. Brands are powerful tools for storytelling, building emotional connection with consumers and community building amongst consumers with shared values and aspirations. And when a brand is able to resonate with its consumers and build a deeper bond, that’s when they are able to create a differentiation for themselves in this highly competitive, crowded market.
What’s Trending?
One big trend Luxury is witnessing right now is the rise of Experiential Luxury or Experiential Retail, which further highlights the role of brands in driving business success. Today’s luxury consumers want more than just products — they crave immersive experiences and meaningful interactions with brands. This has forced luxury companies to rethink their branding strategies and focus on crafting compelling stories, curating exclusive events and experiences, offering personalized concierge services, etc. alongside the products.
Another popular strategy has been brand collaborations across parallel industries or segments to attract a whole different group of audience. For example, the uber-chic Zegna collaborated with the quirky streetwear brand Fear Of God in 2022 to tap into a broader, younger audience as part of a wider casualisation campaign, expanding Zegna’s brand authority from tailored suits to luxury leisurewear for the modern quiet luxury consumer. Leveraging personalities or people behind the brand is a good way to connect emotionally with the new-age emotion-driven consumers.
Additionally, brands in 2024 are leveraging technology to forge deeper connections with consumers and enhance the brand experience. From immersive VR showrooms to AI-driven personalized recommendations, technology is reshaping how brands interact with their audience. Luxury brands in particular are jumping onto this trend to create consistent multi-channel experiences across all brand touchpoints- online and offline. However, the growing digital advancement also raises concerns about maintaining exclusivity and craftsmanship in a digitally-driven world.
These days, brands are also discovering a more conscious consumer behavior in the market. This means brands need to prioritize sustainability and ethical practices in business. However, with the advent of green marketing, authenticity, transparency and integrity will play a huge role in resonating with and acquiring consumers. Luxury brands have the resources and the opportunity to act as stewards of change for a growing segment of environmentally responsible consumers.
So, what’s really happening?
Brand building and brand marketing isn’t what it used to be. While earlier they could lean on trackable performance marketing strategies, the cost of marketing has gone up considerably and there are new data privacy regulations restricting customer targeting, forcing marketers to find different ways to engage with shoppers. According to BoF-McKinsey State of Fashion 2024 Executive Survey, “71 percent of executives plan to increase brand marketing spend in 2024, while 46 percent intend to do the same for performance marketing”.
The year 2024 underscores the pivotal and indispensable role of branding in driving business success, specially within the luxury segment. Consumers gravitate towards brands that offer immersive experience, compelling storytelling or digital innovation. Brands that can master the art of connection and can create a differentiation for themselves in the market, are the ones most likely to succeed in today’s ever-evolving market. While brand marketing might not be as trackable as performance marketing, it has the potential to help brands stand out in a saturated market and acquire new customer base. The new strategies now need to drive the brand’s distinctive, coherent personalities over anything else.
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