Gianluca Ruggiero, Founder & CEO of MASSIVE, shared his thoughts on why strong relationships are key to luxury brand building.
Bottega Veneta recently left social media. Even though not officially announced, some possible reasons may be focusing on building a direct connection with their customers, looking for more exclusive experience and issues with privacy of their customers’ data on third-party platforms. What are your thoughts, why do you think they made that move?
The move must be interpreted in the light of a high-end luxury Brand strategy. In Kering’s portfolio, Bottega Veneta is one of the most prestigious Brands, though it had lost a bit of energy in the last years. Every effort from the Brand is clearly aimed at reclaiming a role as a top luxury player.
Premium Brands still chase customers, saying “buy me, I’m cool and I’ll make you cool”. Luxury Brands don’t care, they often don’t show the product either – consumers are supposed to chase them. If any, their message to the consumer is “Are you really sure we are a fit?”.
Now when it comes to Luxury, “normal” marketing logic and strategies are completely subverted. Luxury is the business of Confidence; it is a transaction of confidence between the Brand and the buyer – a confidence backed by an obsession for craft and the minutest, often useless details. Luxury is not Consumer-centric, it is Obsession-centric. Consumers recognize and appreciate this obsession for excellence and buy the Brand mainly for its extrinsic – i.e. the badge power that allows them to make a statement like “yes, I am obsessed too with excellence and I will not accept anything of lesser value, in every aspect of my life”. We might like it or not, but this is what’s going on in the mind of a luxury buyer. Now, one important consequence of this dynamic is that Luxury Brands sit on a pedestal; their relationship with people is by definition top-down, not between peers. This is one of the biggest misunderstandings marketers often make, as they confuse Premium with Luxury. Premium Brands still chase customers, saying “buy me, I’m cool and I’ll make you cool”. Luxury Brands don’t care, they often don’t show the product either – consumers are supposed to chase them. If any, their message to the consumer is “Are you really sure we are a fit?”.
To clarify this point, let me tell you an anecdote. One of the most prestigious luxury Brands I worked for as a global Brand consultant had a simple rule: if anyone ever uttered the words “Market Research” or “Sales” during a meeting, they were immediately fired. I witnessed this myself; I was at first shocked (and I still think the matter could be handled differently), but I learned a great lesson.
Think of a Brand like Goyard; have you ever seen them advertising anywhere? Not a chance. Their Brand is built on exclusiveness and secrecy. That’s how you become an icon. Someone might then say, “ok, then what about Gucci? Chanel? Louis Vuitton?”. But these are all Brands in a different phase of their life cycle altogether. These are all Brands that have decided to play a “Mass Luxury” strategy, with their range stretched between affordable and (some) extreme luxury. That’s not a game every Brand can play, and not in every phase of their lifecycle.
Think of a Brand like Goyard; have you ever seen them advertising anywhere? Not a chance. Their Brand is built on exclusiveness and secrecy. That’s how you become an icon.
Building a brand that is not dependent on third-party platforms (social media giants and search engines) is not an easy thing, especially for smaller brands with limited budgets. How can entrepreneurs move towards creating a stronger brand and direct connection with their customers?
Real Luxury Brands never depended on Mass Media – because Luxury is the business of Exclusiveness. One of the attractive factors of Luxury is Scarcity. If the products were available for the masses, we would be talking of “Affordable Luxury” at a lower price point (or we would be in front of a very, very bad business model). For example, ROLEX could sell 2 times more watches in any given year to meet its huge demand, and yet they limit their production because they know the strategic role of Scarcity. I think one of the reasons why people get confused about this is Licensing. Luxury Brands have licensed to big corporation for lower-ticket items like fragrances, eyewear, accessories, etc. To reach masses for high volume, high margin, low-cost products, big corporations have used Mass Media (the thing they know best). This has created the false notion that Luxury Brands market themselves just like Mass Brands – but nothing can be further from the truth. Growth is actually a problem for Luxury Brands, something that shadows their allure. Being exclusive, smaller, only for the few, not for the many, are all things that contribute to a Luxury Brands’ attractiveness and general storytelling. Now, Social Media are today’s Mass Media. Did you ever see Gucci advertise their bags or haute-couture in primetime on TV? No, never. You only saw fragrances advertised before Christmas, that’s all. So why should we treat Social Media any different?
Did you ever see Gucci advertise their bags or haute-couture in primetime on TV? No, never. You only saw fragrances advertised before Christmas, that’s all. So why should we treat Social Media any different?
The thing is, Social Media WAS cool and exclusive. So it made sense for Luxury Brand to jump on them and experiment. Then they started hiring “digital specialists” to learn how to manage Social Media, but these “specialists” had no understanding of Luxury strategies at all. But because they were “specialists”, they were allowed to play out of their comfort zone. They started building their Social strategies on “influencers”, to “get more reach at a lower cost” and “become more accessible to new generations” (accessible, really???!!?), chasing people who are often nothing more than sad wannabes. Thanks to these geniuses, in just a few years Luxury Brands have moved from special client lists including Jacqueline Kennedy, to “Disco PR lists” featuring the last Big Brother winner. If I were a true Luxury Brand, I would literally pray every morning not to be featured in one of the Kardashians’ posts. See, the “magic of luxury” – the “suspension of disbelief” necessary to pay a huge premium – only works if Luxury is a badge for true talent and achievement. When it becomes a mere badge for a big bank account… the magic disappears. The cemetery of Luxury is full of Brands that learned this lesson the hard way.
So the question is – how luxury entrepreneurs grow their Brand? Like every other luxury entrepreneurs before them: an obsession with excellence, great exclusive products, selective channels, outstanding commitment, and – sorry for the French, not giving a s^*t about what consumers want. A luxury entrepreneur creates the product for herself because she can’t find her needs properly satisfied in the market. This authenticity is their secret recipe for success – the one that attracts people, who then speak to more people, and more people, and so on. So is there still a role for Social Media in Luxury? Yes, of course. If the Brand is a true Luxury Brand, people will make sure to spread the word using Social. The magic will happen, as it always did.
What has your experience, in the industry you work in, been with social media?
As a former Managing Director of MRM Italy, (McCannWorldGroup’s digital arm) I started building Brands on Social Media in 2005. Since then I have build Brands digitally in every industry possible, from pharmaceuticals to defense, from High-Tech to FMCG. Later, as a Global Brand Strategist for J. Walter Thompson, I developed the global Brand Strategies of many of the 500 Fortune companies, becoming the groups’ specialist on Tech and Luxury, working for prestigious Brands like ROLEX, Penfolds, Nespresso, and many others. So in my experience, I think Social Media are great propaganda tools, and therefore great marketing tools as well, but only if handled consciously. But I don’t see too much awareness in marketers today, quite frankly; too many of them work in “cruise mode”. When I saw Bottega Veneta letting go of Social Media, I was shocked – the first sensible marketing act from a Brand in years, in my humble opinion. But again, this is a move that only makes sense for true luxury Brands.
I developed the global Brand Strategies of many of the 500 Fortune companies, becoming the groups’ specialist on Tech and Luxury, working for prestigious Brands like ROLEX, Penfolds, Nespresso, and many others. So in my experience, I think Social Media are great propaganda tools, and therefore great marketing tools as well, but only if handled consciously.
I also think that the use of Social Media is too far stretched, there are too many expectations about it. Social Media are only relevant for a small portion of the Consumer Journey (although Facebook is trying to increase its footprint), and not the most relevant either. This is why in 2018 I have launched MASSIVE, the first E-Commerce Insights Platform that helps Brands to survive the disruption focusing on the most important part of the Consumer journey, which is covered by E-Commerce platforms, not Social Media. Ask Google: they see Amazon as their real threat, not Facebook. After many frustrating years searching for some insights on lame Social Media Listening tools, I realized that marketers needed something better. Just like a luxury entrepreneur, I created an excellent product just for myself! Happy to see that top companies like P&G, Nestlé and McKinsey are choosing our solution and spreading the word.
What is your strategy for your brand for this year?
My goal is to build a B2B SaaS predictable Sales Engine to keep growing in US and China. Content strategy, and Social Media of course, will play a key role because teaching new ways of doing business is a key part of our business. As a B2B startup CEO, I will be directly involved in the Content Strategy, so I will give a voice and a language to our Brand.
We hope you enjoyed reading all the above, we certainly did! What is your brand strategy for this year? Don’t hesitate to reach out and share it!