Are luxury brands swimming with or against the digital tide?

Ignited by the pandemic, the digital transformation of the luxury sector continues to accelerate. A new report from Clarivate, Luxury brands: Re-calibrating brand strategies for a changing world, looks at how luxury brands – long-standing source of aspiration for consumers – are adapting their brand strategies. Read more.


Luxury today

It is difficult to pinpoint what constitutes ‘luxury.’ It is often synonymous with affluence, exclusivity and quality. Some luxury products, such as haute couture in France, have their own set of legal protections and membership. Luxury brands have an undeniable attraction and brand owners continue to artfully craft their brand story and experience, drawing consumers to their brands. When it comes to brand premiumization, there is a lot we can learn from luxury brands. What, in turn, can luxury brands learn from other sectors’ wider use of IP intelligence?

Our new report, Luxury brands: Re-calibrating brand strategies for a changing world dives into the world of luxury brands. We apply Clarivate brand IP and analytics, first unveiled in our Top 100 Best Protected Global Brands 2021, to better understand luxury’s ‘brandscape.’


Blurring of lines between sectors

Before the pandemic, most luxury brands seemed hesitant about going digital. For instance, most luxury brand websites were ‘look books’ for their collections. They have since shown a great deal of creativity and flair in articulating their brand story and experience in the digital sphere, for an age where travel and footfall to their stores remain restricted. From virtual runway presentations to a ‘try-on’ experience using augmented reality (AR) technology, luxury brands are now braving the digital world.

They are also braving new sectors and surfacing in unexpected places. For example, computer, software, electrical and scientific products rank among the top five in terms of trademark filing activity for luxury conglomerate, Moët Hennessy Louis Vuitton (LVMH), according to our trademark research data. The previously clear lines between sectors are blurring and the competitive set is widening.

Our report also shows that luxury brands are adopting AR and virtual reality (VR) technologies, to bring virtual fashion shows and virtual showrooms to consumers. Trademarks filed by LVMH that mention AR/VR in 2019 were more than double compared to the previous year, according to our trademark research data.

What does this mean in a world where companies such as Facebook have grands plans for the metaverse (a virtual, immersive world where our physical and digital lives are interwoven)? Luxury brands are making big strides today with their digital strategies. They should look ahead and consider how to navigate the metaverse world of tomorrow.


What Gen Z and millennials want

Another interesting development that our brand IP and analytics spotlight is how luxury brands are adapting to a new generation of consumers – Generation Z and millennials. Luxury and what is considered luxurious mirror societal changes. The days of conspicuous consumption are over and younger consumers are increasingly courted by brands. Indeed, millennial consumers are expected to drive 50% of luxury goods purchases by 2025.[1]

Our research shows that these young consumers have a different view of luxury. They identify with brands in different ways. They are digitally savvier than the older, more traditional luxury consumer demographic. There is increasing collaboration between high fashion and streetwear. For example, streetwear brand Palace collaborated with Polo Ralph Lauren to launch the Palace X Polo Ralph Lauren collection,[2] while LVMH’s majority stake acquisition of Off-White is widely seen as a move to capture a younger, more diverse demographic.

Brands are also developing video games to engage with this younger audience. Louis Vuitton developed a game, Louis, to target a Generation Z demographic.[3] Burberry and Mythical Games launched its Blankos Block Party game, featuring Burberry-branded in-game NFT (non-fungible token) accessories.[4] By delving deeper into the trademark filing activity of Louis Vuitton, we observed a spike in filing in the computer games and software category for 2018 and 2019, which preceded the launch of the game, Louis.


Protecting digital brand identities

New opportunities in today’s digital era invariably open the door to challenges and risks, such as those revealed in our recent 2021 Global Business Survey: The growing role of domains in IP.

Luxury brand owners are often present in arbitrations and litigation against domain names that are acquired for high-risk activities such as deliberating diverting traffic, according to our IP litigation data. In fact, a growing number of arbitrations involve luxury brands’ trademarks being used in their entirety in domain names, as profiteers seek to benefit from luxury brands’ reputation.

There are other areas of consideration too. Asia’s increasing prominence – in the region’s contribution to luxury sales and where highest number of actions and cases are filed by luxury brands occur – impact luxury brands’ domain management strategies. The picture here is an interesting mix of different approaches, according to our domain experts, demonstrating the different dynamics in the region compared to the rest of the world.


Accelerating digital transformation

Luxury brands are advancing their strategies for digital transformation as the sector grapples with changing times, changing brand attitudes and expectations, and the changing concept of luxury. They can gain valuable, new insights through the lens of integrated IP and strengthen their mastery of the art of brand building with the science of IP intelligence.

Read the new report: Luxury brands: Re-calibrating brand strategies for a changing world.



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