Anita Kotwani, Leader, Client Leadership, Mindshare West

At the GSI Retail Jeweller India Forum (RJIF) 2016, the opening presentation was titled “The New Marketing Reality”. Speaker Anita Kotwani, leader, client leadership, Mindshare West, offered acute insights and critical perspective drawn from experience and data. The audience of retail leaders was spellbound.

Luxury consumers: who and where
Kotwani has worked with top-notch names like Kellogg’s, ICICI, Saavn, Practo and Godrej, and managed luxury brands including Rolex, HSBC Premier and Forevermark. So she understands the ultra-high-net-worth individual.
“Luxury brands no longer address a homogenised consumer segment,” said this marketing professional. “They further classify the entire consumer segment into various sub-segments, going beyond the broad labels of ‘blue-blooded’ and ‘recently acquired flashy opulence’. Thanks to this micro-analysis, assumptions such as that luxury products can only be afforded by an older consumer profile looking for timeless elements, have been shattered.”
Millennial consumers, with their different outlook, penchant for experimentation and brand-promiscuous nature, have altered the category dynamics. This is why, said Kotwani, “brands need to slice the segments further with finer precision.”

Earlier, the four top metros of Mumbai, Delhi, Chennai and Kolkata together made up 55 per cent of the luxury market in India. Today, half a dozen more cities – Bengaluru, Ahmedabad, Pune, Nagpur, Hyderabad and Ludhiana – have entered that elite bracket, and these new powerhouses together make up 16 per cent of the luxury market. The next rung of luxury-consuming cities includes Surat, Jaipur, Lucknow, Kanpur, Indore, Vadodara, Amritsar, Aurangabad, Coimbatore and Raipur, which account for another 7 per cent of the market.
While most ultra-HNIs still live in the four metros, “the next six cities are the new target locations for luxury brands,” said Kotwani, adding that “It is a challenge for brands to reach out to that scattered consumer segment.”

Why buy: experience, not ownership
Today the very definition of luxury is shifting, from “ownership” to “experience”. To millennials in particular, owning a brand is secondary to the experience that the product provides. Older HNIs, too, are developing a taste for experience-driven purchases. Companies across categories like home décor, luxury automobiles and fashion accessories have leaped wholeheartedly into experiential retail.
Kotwani confirmed that “Although jewellery still commands the greatest share, at 16 per cent, of consumer spend in the HNI segment in India, there is visible growth in experience-led categories such as home décor and holiday packages — 12 per cent and 14 per cent respectively. Jewellers will need to adjust their marketing strategies to stay in the lead.”

What HNIs want: luxury for less
Affordable luxury has become a trend in the uber-luxury segment, said Kotwani. There is a huge demand for luxury at a lower price point than the most premium products. “To address such demand, brands have to make a strategic decision,” she said. “’Should I ladder down my product for these consumers, or should I remain exclusive?’ There are examples of brands that offer lower-price-point-based products. So, brands need to grab a larger share in these emerging trends.”

According to the luxury reports Top of the Pyramid, Kotak HNI Report, there were 117,000 HNIs in India in 2013-2014, a figure that is expected to rise to 333,000 in 2018–19. Their combined net worth was estimated at ₹104 lakh crore (₹104 trillion) in 2013–14 and is expected to quadruple to ₹408 lakh crore by, with a 30 per cent rate of growth year-on-year. So, affordable luxury is emerging as a great retail opportunity.

Screen time: the always-on consumer
Another relevant trend is smartphone penetration, which has radically changed media consumption.
According to a Nielsen survey for market-research major Millward Brown’s AdReaction 2014 Global Report, Indian consumers average 384 minutes, or nearly six and a half hours, of total media time per day. They spend 162 minutes (42 per cent) on their smartphones, 96 minutes (25 per cent) on television, 95 minutes (25 per cent) on laptops and 31 minutes (8 per cent) on print.

“Mobile is also the first and the last screen seen, on a daily basis,” said Kotwani. “Multi-screen behaviour is at an all-time high and likely to rise in the next few years. Brands need to figure out a strategy to leverage the trend.”

Digital touch: the shifting media mix
According to The Director’s Report: Digital Advantage for Luxury Retailers 2015 report, Kotwani said, 45 per cent of luxury purchases “are influenced by what shoppers find in the digital universe”. In short, luxury consumers are digital-savvy, and luxury brands have to refocus their media mix accordingly.
In conventional business-to-market communication in India, the digital mix hovers at around 9.5 per cent. In the luxury segment, however, the digital media spend goes up to 20.25 per cent. Over the last one year alone there has been a 57 per cent year-on-year change in digital spend, according to a Metis report.
According to the L2 Digital IQ Index, a survey carried out in the USA, the browsing trend from contact-us page to product page has increased from 25 per cent in 2013 to 38 per cent in 2014. “If you are a luxury brand,” said Kotwani, “you have to have a digital presence. It’s critical now.”

E-keys: five principles of new-age marketing
Traditional marketing approaches do not work for the true luxury product. Kotwani identified five key principles behind new-age luxury digital marketing:
• A luxury brand must maintain its digital flagship stores as it expands its digital presence.
• A brand site is a crucial support for “research online, purchase offline” (ROPO) behaviour, which is central to the customer experience.
• Digital knowledge-sharing is essential. It helps a brand measure and respond to rapidly changing shopping behaviour, and helps marketing teams to deliver on digital.
• Integrating the digital and physical ecosystems is essential. Although online sales account for less than 5 per cent of luxury retailers’ $270 billion annual revenue, ecommerce in luxury is growing globally at a rate of 30 per cent a year.
• Luxury consumers want convenience and a top-of-the-line shopping experience, as they have embraced ecommerce and adapted to digital technologies which in a way raised their expectations.
She is also of the view that luxury brands in India should have platform-specific strategies to complement their broad digital marketing strategy. “You need to figure out the platform that really works for you. You have to have a platform strategy. India so far has been using Facebook (133 million users), Google (109 million) and Instagram (34 million). A jeweller need to figure out the right platform for his/her brand and leverage its traction.”

Content and data: reading minds and habits
Regarding luxury marketing, Kotwani emphasised the creation and distribution of content across social media platforms. “You can’t expect the target audience to start consuming immediately after the posts,” she said. “Making content discoverable online takes a lot of money. In the paid (display Ads, paid search, sponsorship to print, TV, or any other medium for which a brand pays ), owned (website, mobile site, blog, brochures etc. which a brand owns) and earned (customer tweets, article mentions, and positive reviews) media framework, brands need to look for innovative ways to create buzz.
How to do this? “Create evocative content that is going to travel, be shared and go viral,” she said. When people want to share content, that’s how social media buzz is built.
The concept of the brand as publisher is gaining momentum, Kotwani explained. Rather than publish a blog here and there and then advertise in popular magazines or on TV, brands themselves become the magazines, video channels and overall content providers. “Red Bull is the classic example of a brand that has become a publisher,” she said. “People look forward to the next piece of content that Red Bull is going to come out with.”
An integrated marketing plan is another key tool for the new-age luxury brand. The brand experience has to be unified across platforms. A brand cannot afford to present itself differently in different spaces. It needs uniform guidelines to apply across the digital ecosystem.

Consumers today have multiple entry points to a brand: website, TV commercial, app, etc. “The situation has become extremely dynamic,” said Kotwani. “So it’s extremely important for the offline and digital marketing teams to work in close coordination, to ensure uniformity in message dissemination across channels.”
Data analysis is now deeply integrated with any serious luxury marketing plans. Data, including browsing trends and various other streams, captures consumer behaviour in great detail and requires skillful analysis. Luxury brand marketers can also carry out digital surveys to better understand consumer reactions to specific campaigns. This will sharpen their marketing strategies.

In India in the next few years, said Kotwani, content and data “will become two strong pillars for the majority of agencies and advertisers. Data that is carefully culled helps brands target and re-target their consumers the way travel portals do.”

Change, change, change: being ready always
Market strategies aside, Kotwani also urged luxury brands to stay flexible in every area. For instance, as she pointed out, “A lot of ecommerce brands are even looking at fluid media spend. They assess the ROI [return on investment] on a few advertising platforms and then chalk out the next plan of action.”
In general, she said, an environment of constant change requires from a brand a certain flexibility of response. “It’s happening in social media. It’s happening in the traditional media. It’s like real-time optimisation: making course corrections continuously to enhance a brand’s performance. There is a change in the pace at which the ecosystem is evolving, and success depends on how ready you are to address change.”
So what does the future hold for luxury marketing? The answer lies in Kotwani’s down-to-earth summation: “Brands need to restructure their current infrastructure. The individual verticals have to start talking to each other. You will have to test, experiment, put things into perspective and try and build your brand outside its known space.”
The audience responded with thunderous applause.