luxhub_insights_2014_havas_media.pdf

7/21/2019 LuxHub_Insights_2014_Havas_Media.pdf

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2I Luxhub Insights: 2014 Luxury Digital Outlook

4 EXECUTIVE

7 INTRODUCT

10 WEBSITES

20 E-COMMER

24 MOBILE

28 SOCIAL ME

34 SEARCH &

38 THE RESUL

CONT


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he Middle East is synonymous

with the luxury industry. Luxury

stores, products and media seem

to be visually and cognitively

present all around our environment,

which consequently lters into every

part of our lives, ethos and culture. As

such, its power and importance as an in-

dustry within the region and its growth

are increasing year on year, and those

who play the most pivotal and power-

ful roles in making this happen are the

high and ultra-net-worth individuals

originating from the region. Ultimate-

ly, the luxury industry in the Middle

East is here to full their desires and,

as such, luxury brands must adapt to

their specic needs. Yet, while this may

seem a simple task, these regional luxu-

ry consumers requirements and buying

prowesses are in constant ux, adapting

to their broadening global knowledge,

their technology based lives, chang-

ing current trends and consumer hab-

its. Thus, the Middle Easts high-net-

worth individuals are becoming a pro-

gressively, very demanding and hungry

consumer bracket.

With such rapid movement in consum-

er trends, particularly in the context of

our digitally advancing world, luxury

brands, advertisers and publishers are

on a persistent progression towards en-

hancing their digital properties, content

and offerings. An industry which had

once been left behind or wanted to

from our digital age, by continuing to

rely on the traditional media spill-over

from their globally branded content and

advertising, is beginning to change. The

luxury industry has been fearful and

hesitant of the digital sphere for many

reasons, from loss of exclusivity to sheer

indifference, but we are now witnessing

a renaissance of

keting on an inter

Middle East, as th

broadband penetr

ing its web-based

social platforms, a

grown e-commer

platforms, the dem

italised luxury is

So, how are luxur

this change and w

made so far?

Luxury brands, a

unique position wi

acutely than other

are subject to stri

touch-points and

their global brandi

because aspiration

drive purchase co

more hesitant tha

move into the digi

T

C

orbis

EXECUTIVE SUMMARY


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relinquishing creative and content con-

trol, which is required at a local level

for digital best practice. Moreover, in

the Middle East, they must also ap-

peal to a market which has particular

tastes, cultural differences, languag-

es and traditions while retaining the

aforementioned points. Such parame-

ters played a dening role in this rst

Luxury Digital Outlook Report, where

we examined how luxury brands scored

across various digital marketing activi-

ties, in terms of: social media, mobile,

content, website presence and content,

e/m-commerce, email marketing, and

digital competency on a regional, lo-

cal and country specic scale. Further-

more, we have delivered a ranking of

luxury brands within each category, to

establish which brand(s) are leading in

overall advancement and localisation

within the digital space. We looked at

how this is affecting the status of luxury

brands, the industry as a whole in the

region, and what this means for the out-

look of the market. The future of luxury,

its intricacies and development is some-

thing that we are committed to at Ha-

vas Media Middle East. While we work

with a variety of brands across all our

various disciplines and their numerous

verticals, we hold luxury as one of our

key areas of expertise, and truly under-

stand its importance, not only within the

regions media market but as an industry

to increase regional growth.

This research project, carried out under-

neath Havas Media Middle Easts luxu-

ry intelligence group LuxHub, not only

serves to guide these brands on future

decisions around brand strategy, digi-

tal communication and platform devel-

opment, but also as agency stakehold-

ers, helps us prioritise those decisions

by channeling and identifying gaps to

build better more effective and relevant

advertising solutions, with real data and

insights at the core.

By examining our research in compar-

ison to global and local benchmarks,

we developed a ranking system across

these digital marketing categories in an

effort to not only showcase where lux-

ury brands stand regionally, in terms

of the digital sophistication of their

communications and platforms, but also

where these brands rank against their

global peers.

The data that we analysed was gathered

over the course of Q3 and Q4 2013 from

a variety of open source data platforms

and proprietary Havas tools.

At the core of the data and this document

lays a hard truth about luxury brands in

the region, and while there are some ex-

amples of brands that are winning with-

in a few digital platforms, by and large

this sector severely lags behind in the

majority of core, targeted and strategic

digital communication competencies.

We shall explore the data that delivered

this result, and the effects this data will

have on the experience and expectations

of the regions increasingly important

and powerful luxury consumers.

a

rabianEye

THE NEED FOR A LUXURY DIGITAL REPORTAt the crossroads between data-driven

insights, the perfect regional setting, and

our passion for luxury, we as an agency

found ourselves, and from all of these

factors the LuxHub Insights: 2014 Luxu-

ry Digital Outlook was born.

Innovation, creativity and the employ-

ment of technology to lead the market-

place is the backbone of our communi-

cations ethos. Marketing, as a whole, has

changed forever, and with it the needs

and questions of advertisers. Technol-

ogy and communications are irrevoca-

bly intertwined, so by placing digital at

the core of our agency model, it is our

way to Change Faster as an agency

and be agile and quick for our clients.

Change Faster in this moving environ-

ment means also providing insights in

order to jump into different market re-

alities where numerous media adoption

trends are taking place. Media has never

been so real-time and exible, with ever

changing digital touch points and tech-

nology as the drivi ng force behind this.

Technology and data are motoring our

digitally integrated and strategic offer-

ing, which is successfully fullling the

ever changing and developing require-

ments of current and new clients alike.

This has never been more so, or more

of a hot topic, for our luxury clients and

in general for the luxury industry in the

region. Luxury, in all its verticals, is an

important driving force behind trade,

tourism, growth and the majority of oth-

er industries in the region, not to men-

tion its high-net-worth inhabitants.

Since the inception of Havas Media

Middle East, we have had a special and

insightful relationship with many luxu-

ry brands, and so we pride ourselves on

being at the forefront of trends, develop-

ments and comm

and inuence this

sumers. As such, o

only deliver our l

content and strateg

data to back this u

with them in min

to ignite change a

eld of luxury a

Middle East as a

no longer be ignor

a project that para

benchmarks which

the stark reality of

digital world to i

and marketers.

The idea was sim

competency and p

digital channels. T

websites, e-comm

mobile, search an

to know what bra

INTRODUCTION


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sectors fashion, watches and jewellery,

and fragrance and cosmetics for both

men and women are doing within the

region, and to what extent. We could then

identify which brands are really owning

and developing their digital properties

and media mix, and those who are slip-

ping behind this advancing pack. Using

proprietary Havas research and tools, as

well as our market understanding and

open resources, we were then able to

draw data-driven conclusions as to why

this is happening and what it means in

the bigger picture.

The struggle for a brand to be both glob-

al and local, in terms of created media

and content, is a difcult and complex

situation facing luxury brands world-

wide, and particularly here in the Middle

East. With languages, cultural and life-

style traditions varying from country to

country, and even from city to city, luxu-

ry brands have been somewhat carefully

generic in producing regional content,

and thus far, have been treading very

lightly in terms of digital presence.

However, this broad positioning is be-

ginning to cause concerns around how

they are truly engaging the local con-

sumer-population through their content

and user experience, within the digital

world. The acceptation that global lux-

ury brands need not bother with local-

ised content and media presence in the

region is taking its toll on how far many

luxury brands can reach into the lives of

the wealthiest consumers that the Mid-

dle East has to offer. Despite the regions

efforts to ascertain original content

development, and the popularity of this

movement, it still seems to be falling on

deaf ears.

For a while it seems that we in the Mid -

dle East have been happy to accept this

lack of effort and resign ourselves to

the fact that we are still an emerging

marketplace to these large international

businesses.

But times are changing, and with the

luxury market in the region growing

year upon year, the necessity to focus

on what the local consumer wants and

how they want to be engaged by a brand

is becoming more important. With the

regional luxury market comprising of

an estimated 6.6 billion and growing,

according to the 2013 Luxury Goods

Worldwide Market Survey from Bain

& Company, Middle Eastern consum-

ers have the highest per capita spend on

luxury goods in the world at just over

$1,900, and overall the region is the 10th

largest global luxury market. Therefore,

the Middle East is not so much an emerg-

ing marketplace, but a fully emerged one

when it comes to luxury.

Fundamentally, it has come to a crunch

point for global luxury brands to rmly

accept that the regions afuent consum-

ers are now yearning for localised, per-

sonalised and created digital content and

advancement. They want to be drawncloser to the brand, associate with its su-

perior exclusivity and, most of all, make

a meaningful connection with a brand

in which they can intrinsically identi-

fy themselves as an individual amongst

their family, friends and peers.

In another recent Havas research proj-

ect on Luxury Perceptions and Habits

in KSA and the UAE, we saw that 90

per cent of our luxury consumer respon-

dents are now researching products and

brands online before purchasing, hence

the necessity for brands to win in digital

is most denitely there.

Moreover, with the local Arab pop-

ulation spending an average of six

hours of their daily time online via

their PC, mobile and/or tablet (2013

InMobi and Havas Digital Research), it

is easy to see why the Middle East mar-

ket is demanding more enriched content

and technological advancement on these

digital platforms.

RESEARCH BRANDSAs part of the LuxHub: 2014 Luxury

Digital Outlook we looked at a range

of luxury brands that widely operate

throughout the Middle East.

This list included: 36 fashion brands; 26

watch and jewellery brands and 33 fra-

grance and cosmetic brands. These par-

ticular brands were chosen by looking

at brand perception, proliferation and

physical presence in the region. Ulti-

mately, we looked at what type of luxury

products are most likely to be purchased

online ranging from those at entry level,

fragrances and cosmetics, to fashion and

accessories, and to the higher end of be-

spoke watches and jewellery.

Such categories also constitute those

products which appeal to a wide luxu-

ry audience, and are the luxury sectors

that are most likely to be followed and

engaged with, because of the constantly

changing trends and seasons.

RESEARCH METHODOLOGIESDue to the numerous and multiple brands

examined 95 separate brands over thethree different categories a variety of

data sources were needed and used to

gain the raw insights for the research.

These included specic digital tools and

extensive desktop research across a large

variety of pages, email newsletters, plat-

forms and applications, to individually

monitor and analyse the particular ele-

ments within each of those sources.

We divided the research analysis into six

main sections: websites, mobile, e-com-

merce, social media, search and email.

Within each section we examined spe-

cic elements relevant to those sections

that are the foundation and universal

benchmarks for digital activation and

competency, as well as a particular focus

on localisation. By examining these ele-

ments we developed a scorecard to mea-

sure each brand, in order to achieve the

base competency.

Over all the sections, we identied 117

core digital competencies for websites,

social media, e-commerce, mobile,

search and email.

These universal benchmarks are con-

stantly evolving, changing and be-

coming more developed year-on-year.

Although our end result compares

one brands score against another, the

principal takeaway is that the brands

are not competing against one another,

but really against themselves in how

Alexander McQueenAlfred DunhillArmaniBalenciagaBurberryCalvin KleinCarolina HerreraCeline

ChanelChristian LouboutinCoachDiorDolce & GabbanaElie SaabErmenegildo ZegnaFendi

GivenchyGucciGiuseppe ZanottiHermsHugo BossJimmy ChooLanvinLouis Vuitton

Marc JacobsMiu MiuNina RicciOscar de la RentaPradaRalph LaurenRoberto CavalliSaint Laurent

TodsTom FordTory BurchValentinoVersace

Audemars PiguetBaume et MercierBlancpain

CartierChanel JewelleryChaumet

ChopardCorumDamiani

De BeersDiorGraff

Harry WinstonHublotJaeger-LeCoultre

KorloffLonginesNeil Lane

OmegaPatek PhilippePiaget

Raymond WeilRolexTiffany & Co

Van Cleef & ArpelsZenith Watches

ArmaniBalenciagaHugo BossBottega VenetaBurberryCartierChanel

ChloClarinsCliniqueClive ChristianCreedDiorDolce & Gabbana

Este LauderFendiGivenchyGuerlainHermsJimmy ChooCavalli Fragrances

La PrairieLancmeMarc JacobsMontBlancNina RicciPaco RabannePrada

Tom FordValentinoVan Cleef & ArpelsVersaceYves Saint Laurent

FASHION BRANDS

BRANDS SURVEYED

WATCH AND JEWELLERY BRANDS

FRAGRANCE AND COSMETIC BRANDS

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they portray their

space. What they d

cision rather than

is here to provide

system for luxury

cize their brand or

cies. At the end o

we have served to

tion as to how bra

these requirements

enhance their ov

and properties.


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WEBSITESINTRODUCTION

Websites are what we perceive to be the

core digital base for any brand globally

or locally. They are often the rst touch-

point with a brand, and will lead to fur-

ther exploration and engagement across

other platforms. In addition, it is also a

place where a consumer will look to nd

out about general brand material, a par-

ticular product or nearby store. Websites

are also the point of reference for any

such information because the site has

been produced by the brand, and there-

fore it is a reliable and trustworthy source

for the most up to date information.

All the brands that we examined throu-

ghout this report had global websites,

with the majority being in English and/or

the brands country-of-origin language.

All the sites which we analysed had the

option of directly translating the content

into several other languages. The majori-

ty of these were from Europe with the ad-

dition of Mandarin, Cantonese, Japanese

and Russian in many cases. However, we

wanted to dive deeper into how website

content was not only translated, but how

it was adapted and curated for the regio-

nal audience. To further expand upon this

examination, we looked at which brands

were using localised content and/or Ara-

bic language content on their global web-

sites. Localised content in this case is

dened as content created and written

specically for the Arab market. Arabic

content, in this case, is dened as general

content translated into Arabic.

We then wanted to see if the brands had

any regional or country specic website

presence or content. Furthermore, we

developed this idea by examining the

websites functionality: from HTML vs.

ash, social media linking and sharing,

to product search and availabil ity, to local

currency conversi

and newsletter sign

As the rst point

research, this initi

bleak reality of the

digital communica

technological com

website environme

worlds leading lu

did not have in th

cases globally.

GLOBAL WEBSITES

Arabic Content

Upon beginning to

we rstly looked at

the option to selec

case this was the M

c country within t

Out of the fashio

cent listed the Mid

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per cent for fragrances and cosmetics and

11 per cent for watches and jewellery.

Overall, only 27 per cent of brands we

looked at even mentioned the Middle East

on their websites as its regional location.

Out of those, we then examined which

websites had Arabic content.

From the three categories we exami-

ned, the luxury fragrance and cosmetic

brands had the highest percentage of Ara-

bic content at 21 per cent. Namely, Hugo

Boss, Chanel, Clinique, Este Lauder, La

Prairie, Lancme and Saint Laurent.

This was then followed by the fashion

category, which was very far behind, with

only 8 per cent having any Arabic content.

The fashion brands that made up the 8 per

cent were Carolina Herrera, Elie Saab and

Ralph Lauren.

The only two watch and jewellery

brands to have had Arabic content were

Piaget and Patek Philippe.

Localised Content

With more than 20 million Google

searches in Arabic coming from the GCC

every day (Source: ThinkwithGoogle.

com Search Analytics), brands must fully

comprehend the importance of localised

content for the regions digital users. Thus,

to follow on from Arabic content, we saw

the stark reality of how few global luxury

brands had localised content.

Fragrances and sosmetics led with 18

per cent, compared to watches and jewel-

lery with just 3 per cent. The fragrance

and cosmetics brands that we saw leading

this section were: Clinique, Este Lauder,

La Prairie and Lancme.

The fashion category had zero brands

with localised content.

The only watch and jewellery brand to

feature localised content on its website

was Piaget.

What we concluded from the above data

is that there are a small percentage of

brands that realise that having at least an

Arabic translate-facility and some local

content is important to engaging a local

consumer. The reasons behind this are

many: time, cost and work, but it is also

the continued reliance on generic content

over-spill in order to satisfy an ever-

growing global audience. A large part of

this may be due to global hesitation to re-

linquish content creation to local markets

because of a perceived dilution of brand

afnity and exclusiveness. In a more

positive way we saw that several brands

comprehended that not all of their inter-

national readers are literate in English,

and would intuitively prefer to read and

engage with a brand in their own native

language. Fundamentally, we must consi-

der this as the most basic step towards

fully localised and original content, but

one has to start somewhere.

REGIONAL AND COUNTRY WEBSITES

Advancing a notch along the chain of

digital sophistication, we explored whe-

ther the brands had regional websites, i.e.

a website that is specic to the Middle

East and in most cases had a me in the

URL. Regional websites offer brands a

closer step towards engaging market-spe-

cic consumers, and allow for much more

freedom of localisation and the ability

to be much more targeted. However, we

found that this was not the case.

None of the fashion, watch or jewellery

brands that featured in our research had

any regional website for the Middle East.

The only four brands that came from the

fragrance and cosmetics category and

were the French beauty-market leaders

Clinique, Este Lauder and Lancme,

and Swiss cosmetics brand La Prairie.

We saw from this that it was the beau-

ty products, i.e. products that are more

accessible, who are making headway in

the digital space. By having much more

leeway to use digital platforms, less strictguidelines on Arabic content and bran-

ding, they have the opportunity to be

much bolder when it comes to localisa-

tion so as to not affect their overall brand

image or identity.

We then analysed if the brands had

country level websites.

The sole fashion brand to have country

specic website was British-born Bur-

berry and for watches and jewellery,

Swiss luxury watch maker Piaget, both

with UAE-based URLs.

However, the Burberry site was only

available in English, making Piaget the

only brand within our list of brands to

have Arabic content on their country site.

The brands that had regional sites did

not appear in this country section, lea-

ving the fragrance and cosmetics cate -

gory with no country websites at all.

WEBSITE FUNCTIONALITY

Introduction

Expanding upon regionally specic

content and website presence, we also in-

cluded website functionalities to highlight

the functional and user-experience com-

petencies of the brands digital proper-

ties. The ability for a local consumer

to be able to locate a store near to their

home or ofce, see what a product costs

in their native currency, to merely having

a country specic customer service, are

really the foundations for any brand to

have in a global market, never mind in

the world of luxury and the region, where

a high level of service is always expected.

Of all of these functionalities, it is per-

ceived that customer service is the most

important part of a luxury brands consu-

mer relationship holding in its grasp the

personalised quality of service, the after-

care and fundamentally the loyalty of

a customer.

Store Locator

Of the brands examined from the

fashion category, 95 per cent of global

websites had a store locator, for watches

and jewellery 88 per cent, and from fra-

grance and cosmetics 94 per cent.

It is interesting to see that watches and

jewellery had a signicantly lower

percentage which is most likely due to

the fact that they are present in many

local concessions which may not appear.

However, we would also assume this is

also very much the case for fragrances

and cosmetics, as u

berry and Cha nel in

there have been no

for luxury brands.

mass nature of the

presence at multi-b

not be able to be

locations. And ye

that perhaps due to

readily available a

nal retailers it is p

their locations.

Products

The next most prev

tion which online c

are specic produc

89 per cent of luxu

tured their product

For watches and

goes up to 96 per

resting when com

percentage of bran

more products to

to see where they a

FASHION BRANDS WITHARABIC CONTENT

FASHION - STORE LOCATORFUNCTIONALITY

FRAGRANCE & COSMETICBRANDS WITH ARABICCONTENT

WATCHES & JEWELLERY -STORE LOCATORFUNCTIONALITY

WATCH & JEWELLERYBRANDS WITH ARABICCONTENT

FRAGRANCES & COSMETICS -STORE LOCATOR FUNCTIONALITY

YesNo

Yes

No

YesNo

92%

92%

ALL BRANDS WITH ARABIC CONTENT REGIONAL AND/OR COUNTRY WEBSITE

8%

8%

21%

79% 93%

7%

6%

92%

95% 88% 94%

6%12%5%

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For fragrance and cosmetics, 94 per cent

had products featured on their websites

which we consider low for this category.

In fact to not have 100 per cent of websites

with such basic information is somewhat

akin to having a physical store with less

than full shelves. It could be argued that

this type of product needs to be tried and

tested in store, which is particularly true

for the Middle Eastern consumer, and the-

refore there may not be much point dis-

playing them in the digital realm. But this

does not hold logically as the website is an

informative base that will hopefully lead

to trial.

In-Store Availability

From the websites that had product

viewing functionality and store-locators,

we then examined those that showed in-

store availabil ity.

For the fashion brands 95 per cent

showed availability, for watches and

jewellery 93 per cent and frag rance a nd

cosmetics 97 per cent.

Such high percentage scores in this

section clearly shows the relevancy of

e-commerce, and even if not, that brands

should have this functionality to drive

consumers to store.

Prices in Local Currency

In terms of localisation, it is important for

regional consumers to see their own cur-

rencies and/or exchanges, especially for

the Middle East where prices can vary

largely from country to country.

Out of the websites which did show pro-

ducts online, 95 per cent of the fashion

brands researched did not have local cur-

rency prices, no watches and jewellery

brands had them and 97 per cent of fra-

grance and cosmetics brands did not.

Those brands which did show a local

currency in this category were Burberry,

once again, and American luxury acces-

sories brand Coach both showing prices

in local Arabic currency.

Country Specifc Customer Service

Delving deeper into localised website

features and functionality, we looked at

the important necessity for any luxury

brand, especially in the region, its custo-

mer service. This could be a local tele-

phone number or email that is specic to

a country and their consumers.

For fashion, half the brands had this

service, 62 per cent did for watches and

jewellery and slightly lower was fra-

grance and cosmetics with 61 per cent.

From this we could surmise that those

products which need the most attentive

customer care, due to their long-term

wear and cost, came from the watch and

jewellery category. Fragrance and cos-

metic brands also had with a very high

percentage although it seems unlikely

that a customer would return or exchange

a beauty product. The feature of customer

service also bears weight on what levels of

importance, or lack thereof, brands give to

e-commerce, digital communication, and

the local purchase habits and needs that

the Middle Eastern consumer has.

Newsletter

Newsletters, as a form of email-based

communication, is a topic that we will go

into in detail later in this document. For

this sub-section we examined newsletter

sign-up and availability on websites.

Newsletters have been a traditional cor-

nerstone for brands as part of their digital

marketing arsenal for a long time. Luxury

brands globally have not shied away from

email-marketing either, especially as they

have globally rolled out e-commerce as

a channel for sales. Apart from acting

as a trigger for e-commerce, newsletters

are also a branding and promotional de-

vice for new launches, events and brand

news, especially for the latter. There

was a signicant level of newsletter use

and integration across the brands inves-

tigated, it was surprising, however, and

we believe an obvious gap, that not all

brands are active with email-marketing

in the region.

In addition to their global websites, we

have seen a few leading brands launch

smaller micro-sites to elaborate upon the

brands storytelling, to go in-depth into

current collections inspiration or cover

special events/exhibitions. Evidence of

this can be witne

Chanel site and

Swide.com, a blog

brand. Yet another

drive storytelling a

connect online wi

via an e-newsletter

a direct response

by delivering a h

content-targeted v

awareness and co

consumer groups.

In the fashion ca

not to have a newsl

banna although it

did, which linked

making it only 3 pe

functionality.

For watches and j

ter number did not h

up functionality at

FASHION - WEBSITES WITHPRODUCTS OVERVIEW

FASHION - WEBSITES WITHPRODUCTS PRICESIN LOCAL CURRENCY

FRAGRWEBSPRICES

WEBSITES WITH NEWSLETTERSIGN UP FUNCTIONALITY

WATCHES & JEWELLERY -WEBSITES WITH PRODUCTSPRICES IN LOCAL CURRENCY

WATCHES & JEWELLERY -WEBSITES WITHPRODUCTS OVERVIEW

FRAGRWEBSIPRODUYes

No

96%

100%

95%

71%

29%

5%

89%

11% 4%

LOCALISED AND/OR REGIONAL

WEBSITES WITH FACEBOOKSOCIAL SHARING

46%54%

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sites, whilst the remaining 11% used

Flash platforms. These Flash sites in -

cluded brands such as Chlo, Elie Saab,

Lanvin, Nina Ricci, Ralph Lauren and

Tom Ford.

An even greater majority of watch

and jewellery brands (93 per cent) used

HTML, with Corum being the only brand

website to use Flash.

Comparatively it was slightly lower

for fragrances and cosmetics, when

compared to watches and jewellery,

with the category having just 91 per cent

of brands using HTML. Those which

used Flash were: Chlo, Guerlain, Nina

Ricci and Tom Ford.

CONCLUSION

A website fully represents a brand online,

it is often the brands rst door online

and a consumers rst port-of-call. And

yet, with some of the ndings we have

discovered above there seems to be a ma -

jor gap in some of the most rudimentar y

digital competencies, but particularly the

amount of locally based content, presence

and functionality.

The reality is that global luxury brands

have yet to invest in optimising their

website properties in order to more effec-

tively engage the local consumer on a

more personal and contextual level, and

this could be for many reasons. First, and

foremost, their perception of the markets

consumers habits and needs, followed by

general unwillingness and apathy towards

earned engagement via social chan-

nels because of loss of exclusivity in the

digital world.

The idea that the Middle East is still an

emerging market also means that many

brands believe the regions luxury market

is still young and behind the times when it

comes to e-commerce, online media and

engagement. While shopping in a mall re -

mains a popular social activity enjoyed by

the Arab population, according to Inter-

net Word Stats the Middle Easts internet

penetration is at 40.4 per cent, and with

the rest-of-world average being 34.1 per

cent it clearly shows the absolute impor-

tance of digital in the region. That said,

this gure is typically only considers PC-

based access. Therefore, when we consider

smartphone penetration as an additional

proxy for internet access above desktop,

this gure is arguably much higher as

smartphone penetration is over 74 per

cent (Source: Google Mobile Planet, Ja-

nuary 2014 Middle East) compared to

the world average of 44 per cent (Source:

Google Mobile Planet, January 2014

All Countries).

In terms of luxury brands, it is a clear in-

dication that they must see and accept that

the online world in the region is a golden

opportunity for their brand to invest in.

The rst to market with a more advanced

website strategy in the region will be able

to leap-frog the competition and become

a category leader very quickly. With more

people in the Middle East who are spen-

ding time on digital channels, brands

need to ensure a localised web presence

and content to remain relevant. Saudi

Arabia is by far the biggest luxury market

in the region, followed by the UAE, Qatar

and Kuwait, so we must surmise that this

is where the luxury brands are focusing

their time. Interestingly, therefore in Sau-

di, where English is not widely spoken to

a procient level (Source: English Pro-

ciency Index KSA ra nking 41.19), local

and Arabic content would be a priority of

these brands wanting to engage the luxu-

ry consumer, this is clearly not the case.

However, at this current point in time we

would be quite wrong.

Website Results

Overall, the highest scoring category, in

terms of website competency and techno -

logy, was fragrances and cosmetics with

10, followed by fashion with nine and

watches and jewellery with eight. Howe-

ver, if we only consider the elements

which were based on localisation of the

websites, the leading category, by a long

way, was fragrances and cosmetics with

the most Arabic content.

Recommendation

In the 2013 Luxury Brand Perception stu-

dy by Havas, we found 95 per cent of the

regional respondents researched luxury

products online, and no doubt websites

would have been their rst point-of-call.

While some in the Arab World do read

English, many do not, and therefore it

is imperative to have at least an Arabic

translation available. Localised content

is also crucial, as t

become a hungrier

ten word in their ow

ful of personalised

that is relevant to

habits and lives.

Excellence in custo

mething that is dem

throughout the Mid

very high standard.

The user experien

of website propert

as the sophisticat

of the Middle E

nue to evolve. Th

recommend a co

wards enhancing

wards localised

making sure the u

website is of the

physical store to

luxury benchmark

OVERALL WEBSITE S

30

25

20

15

10

5

0Fashion

&

BRAND

Elie Saab (F)

Armani (F)

Lancme (F/C)

Clinique (F/C)

Este Lauder (F/C)

WEBSITE RESULTS

GettyImages


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E-COMMERCEINTRODUCTIONE-commerce, for the many markets around

the world, is part of everyday life, and for

luxury e-commerce international compa-

nies, such as Net-A-Porter.com, myward-

robe.com and mytheresa.com have de-

nitely shown how luxury can be purchased

online, without losing a brands exclusivity

or succumbing to massication. The care -

fully selected collection pieces and brands

propose a boutique-style digital offering

which maintains that luxury shopping ex-

perience. This is also combined with very

acute guidelines on their customer service,

shipping and returns policies, as well as

beautiful packaging. Shopping online for

luxury must not just seem to be a quick-

click purchase, but an easy experience

which can be just as exclusive as buying

in-store. Companies such as the above have

helped to guide individual luxury brands to

change their perception of e-commerce, to

show that there is a demand for it and that

brands and their products can continue to

remain just as elusive in the digital world.

What we must bear in mind, at this cur-

rent time, is that e-commerce in the Mid-

dle East is hindered at the point of deliv-

ery and payment. This is particularly true

in KSA, where cash-on-delivery models

are a favoured payment method and are

consequently plaguing growth, which is

contributing to high levels of cancelled

transactions. However, we do foresee an

inevitable change. As online payment be-

comes more trusted, as delivery assurances

become more robust, and as ever-demand-

ing consumers gravitate online to access

the hard-to-secure pieces which often sell

out quickly in-store, luxury e-commerce in

the region will grow. Underpinning these

structural and consumer realities and in-

evitabilities is that e-commerce enables

greater ease, efciency and choice. While

the region is typi

as a social corners

change, it will be

out-of-mall purchas

E-COMMERCE AND F Of the brands we

three categories, w

tial 70 per cent did

available on their gl

Of those that did h

5 per cent offered

these included: Ale

useppe Zanotti, Jim

valli and Tory Burc

75 per cent of bran

merce also offered a

rites List option, w

future e-commerce

cation.

26 per cent of th

e-commerce also


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SOCIAL MEDIAINTRODUCTIONLuxury and social media channels have

never been comfortable bedfellows. But

in a rapidly evolving social landscape,

brands should be targeting their audience

to increase earned and shared loyalty,

without losing their brand integrity to

massication. With word-of-mouth be-

ing said to be the most popular source of

trustworthy information by the regions

local consumers (Nielson 2013), social

media must play an integral and inevita-

ble role in this engagement cycle.

In recent years, the concept and ethos of

luxury has dramatically changed, and we

have witnessed a shift in media and brand

strategy to embrace the diversication of

media touch points. As a more advanced

emerging market, the Middle East has

been at the forefront of these changes,

with local consumers having buying pow-

er, the time and the hunger for copious

product consumption. In terms of media,

this approach to consumption has also l-

tered down into t he regions digital space,

indeed because of its inherent accessibili -

ty and sociability a very important part

of the regions culture. With time spent

online among the highest in the world,

brands are looking to the social digital

sphere to target this audience. However,

its still very much in its early stages.

FACEBOOK Predominantly all of the brands we

looked at had ofcial global Facebook

pages at 97 per cent. Those which did

not were Celine for the fashion catego -

ry and Clive Christian for fragrances

and cosmetics.

We then looked at all the brands with

global Facebook pages that had either

localised posts. Across all categories the

brands scored a zero.

Out of our 95 b

had regionally spe

which all came fr

cosmetics categor

ins, Clinique, Este

Lancme, who wer

that had country

posted in English a

None of the br

country specic F

region.

The fan-base siz

varied greatly:

4 per cent of them

fans

5 per cent had bet

18 per cent had be

25 per cent had

one million fans

Burberry with ov

the way, followed

over 14 million, DGettyImages


16/23


lion, Gucci with more than 11 million

and Chanel with over 9 million, were the

fashion brands with the highest number

of fans.

Tiffany & Co. was the leader for watch-

es and jewellery with more than 4 mil-

lion, followed by Cartier and Rolex, both

with just over one million Facebook fans.

Clinique had the highest amount of fans

with over 6 million for fragrances and

cosmetics, followed by Lancme with

more than 5 million and Clarins with

more than 1 million.

The rest of the brands fell much lower

on the scale with less than 50 thousand

fans in most cases. It is interesting to see

here, that the brands which had Arabic

posts and regional Facebook pages also

had the largest amount of fans in their

category.

Chanel, Louis Vuitton, Longines, Cla-

rins, Este Lauder, Lancme and Tom

Ford were the only brands which we saw

had used paid media on Facebook.

Lancme, Clarins and Clinque were

also the only brands to have had run

Facebook competitions for the fragrance

and cosmetics category.

Piaget and Longines were the only two

brands for watches and jewellery to have

had Facebook competitions.

Once again within the fashion catego-

ry it was Chanel, Louis Vuitton and Tom

Ford to have used Facebook applications

on their pages.

Facebook applications were used by

Harry Winston, Longines and Piaget for

Watches and Jewellery.

Clarins, Clinique, Este Lauder and

Lancme for fragrances and cosmetics

also used Facebook applications.

Another issue, which arises from the

lack of local Facebook presence, is brand

rankings when it comes to search within

the site. Facebook search is now carefully

monitored by geo-locators, so if a brand

does not have a local page it will not ap -

pear in a Facebook search, only the top

20 per cent of similar local pages will

appear. Therefore, this also means that

any suggested posts or ads, even from a

brands global page, will not appear in

the search because they do not have a lo -

cal presence in the region. Conclusively,

without a local page, brands are simply

not reaching all of their possible consum-

ers outside of their central hub market.

Even so, the whole ethos of social me-

dia is sharing sharing content, sharing

ideas, sharing images and thoughts with

friends and family so, if all the content

is in English or there is little or no content

relating to the Middle Easts consumers

daily lives, the potential benet of engag-

ing a local audience is minimised.

TWITTER Of all the brands we examined, 76 per

cent had current global twitter accounts

Only a very small proportion at 3 per

cent had regional Twitter handles, which

were: Burberry and Clarins.

Burberry, Chanel and Dior, with over 2

million, had the largest amount of follow-

ers, trailed by Dolce & Gabanna, Marc

Jacobs, Louis Vuitton and Saint Laurent

with just over 1 million.

Burberry was, again, the only brand to

have owned hashtags.

Consequently, out of the aforementioned

brands with regional handles, we looked

at the amount of Arabic posts on their

feed over a six-month period.

We saw that Chanel had the highest

amount of Arabic posts across all of the

brands that were part of our research,

with over 17,000. Chanel was then fol-

lowed by Rolex, Dior, Giuseppe Zanotti,

Burberry and Prada.

Within the Fashion category the demo-

graphic split of followers was fairly even

with 52 per cent being female and 48 per

cent being male.

The split was reversed for watches

and jewellery, with males comprising

53 per cent of the share and females at

47 per cent.

For beauty and fragrances the split

was unsurprisingly female dominated

at 65 per cent We then examined what

language followers were mentioning the

brands in, by looking at the most recent

200 mentions.

Out of that number, 74 per ce nt were not

in English.

When we ltered

at the Arabic men

glish percentage, a

in Arabic.

With this insight, w

at the previous 30

last 200.

When combined

cent were not in En

were in Arabic.

Consequently, lo

1,000 twitter ment

in English and of

cent which were n

cent of those were

From the last 10,0

er, 5 per cent were

Finally, in all

tioning researche

Arabic comprised

overall share.

BRAND SCORE OUT OF 40

Clarins (F/C) 30

Burberry (F) 22

Lancme (F/C) 19

Louis Vuitton (F) 10

La Prairie (F/C) 10 Fashion

YesNo

YesNo

YesNo

YesNo

&

LUXURY BRANDS WITH REGIONALFACEBOOK PAGES

LUXURY BRANDS WITH GLOBALTWITTER HANDLES

RESULTS OVERALL SOCIAL MED

GLOBAL FACEBOOK PWITH OVER 10 MILLIO

LUXURY BRANDS WITTWITTER HANDLES

20

15

10

5

0

75%

70%

30% 26%

25%4%

96%

24%

76%

GettyImages


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SEARCH AND EMAILINTRODUCTIONLuxury brands must approach their digital

presence as an integrated offering. There-

fore, while websites, mobile, ecommerce

and social media dominate as digital touch-

points, we need to ensure that inbound

channels to the brands properties are also

developed and catered to a local audience.

Search and email marketing boost and

drive trafc to a brands digital platforms,

content, and overall business in an extreme-

ly competitive market. Search is the rst

battleeld for a brand in digital, and can

deliver the healthiest ROI through organic

and paid engagement in both the very short

term and long term. With almost 80 per

cent of the local population using search to

nd information and content daily on both

their mobiles and PCs (Source: ThinkWith-

Google.com: Mobile Planet), search plays

an integral role in how consumers nd, dis -

cover, and engage with a brand.

PAID SEARCHSearch is often overlooked within the

context of digital competency, giving

way to mobile and social media being

more visible platforms. Yet, with com-

petition higher than ever in the digital

world, it is something extremely neces-

sary, especially for those brands with a

regional presence, or those tr ying to es-

tablish one. With more than 20 million

Google Searches in Arabic each day

(Source: ThinkWithG oogle.com), Ara-

bic content and search optimisation is an

increasingly important activity across a

brands digital properties.

A substantial 23 per cent of brands that

we looked at were undertaking SEM in

the region. These were Burberry, Chanel,

Coach, Dior, Gucci, Oscar de la Renta

and Ralph Lauren for fashion; Audemars

Piguet, Cartier, Chanel Jewellery, Dior,

Jaeger LeCoultre, Omega, Patek Philippe,

Piaget and Tiffany

jewellery; and Bur

Beauty, Dior, Este

for fragrances and

It is important to p

ry, Chanel and D

each of our three

tively targeting ea

via SEM.

EMAILAfter looking at

ability and functio

websites, we then p

newsletters and o

cation platforms (

marketing), to disc

communicating wi

The greatest p

were not sending

at all.

The most active


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20/23


BRAND SCORE

Audemars Piguet 24

Baume et Mercier 21

Blancpain 17

Bulgari 19

Cartier 26

Chanel Jewelery 24

Chaumet 21

Chopard 18

Corum 14

BRAND SCORE

Armani 40

Balenciaga 30

Boss 20

Bottega Veneta 24

Burberry 40

Cartier 13

Chanel 26

Chloe 27

Clarins 41

Clinique 22

Clive Christian 10

WATCHES & JEWELLERY

FRAGRANCES & COSMETICS

Damiani 20

De Beers 23

Dior 20

Graff 16

Harry Winston 26

Hublot 18

Jaeger-LeCoultre 26

Korloff 21

Longines 19

Creed 18

Dior 30

Dolce & Gabanna 24

Este Lauder 21

Fendi 25

Givenchy 21

Guerlain 19

Hermes 21

Jimmy Choo 27

Cavalli Fragrances 16

La Prairie 20

Neil Lane

Omega

Patek Philippe

Piaget

Raymond Weil

Rolex

Tiffany & Co.

Van Cleef & Arpels

Zenith Watches

Lancme

Marc Jacobs

MontBlanc

Nina Ricci

Paco Rabanne

Prada

Tom Ford

Valentino

Van Cleef & Aprels

Versace

YSL

Fashion Wa& je

OVERALL SCORES

110

100

90

80

70

60

5040

30

20

10

0

The nal part of our LuxHub research

was to provide an overall score, takinginto account the individual scores in each

core section. Each brand was given one

point for each of the base digital compe-

tencies that are considered as the univer-

sal elements that all luxury brands digi -

tal properties should include.

Throughout this scoring system our fo -

cus remained on those elements which

most greatly affected a brands regional

and local presence and content, and with-

in that, the digital sophistications which

were used.

As we have seen during this research,

regional presence and content is almost

non-existent for many brands. Therefore,

when we consider that the brands werescored out of a total 117 points, the stark

reality of this lack of local and regional

content affected the overall scores con-

siderably. Moreover, it is also clear as

to the small importance given to digital

properties and platforms by these brands

and global category leaders, as well as

how they are globally slipping behind

in the sophistication of these properties

when ultimately t hey should be at the

forefront of innovative design, innovation

and technology.

It is interesting to see from the above that

it is the fashion brands dominating the

top scores. However, as we know, because

they have lines across all the categoriesthey are able to spread themselves as

a brand across all platforms simulta-

neously. Although the subject of the

content that we researched was not a gov-

erning factor in this research, it may well

show that the majority will be mostly

covering their fragrance and cosmetics

lines, which we generally comprehend

to be more suitable for digital because

of their mass nature and entry-level

luxury prices. This point is particular-

ly interesting and for the next LuxHub

Luxury Digital Outlook is something that

we will look into further.

THE RESULTS

FASHION SCORE

Alexander McQueen 31

Alfred Dunhill 26

Armani 36

Balenciaga 29

Burberry 48

Calvin Klein 21

Carolina Herrera 19Celine 13

Chanel 33

Chloe 26

Christian Louboutin 18

Coach 25

OVERALL SCORES

Dior 30

Dolce & Gabanna 35

Elie Saab 32

Ermenegildo Zegna 21

Fendi 25

Givenchy 21

Gucci 33

Guiseppe Zannoti 21Hermes 21

Hugo Boss 23

Jimmy Choo 29

Lanvin 35

Louis Vuitton 34

Marc Jacobs 32

Miu Miu 26

Nina Ricci 17

Oscar De La Renta 21

Prada 22

Ralph Lauren 38

Roberto Cavalli 26

Tods 22Tom Ford 16

Tory Burch 36

Valentino 27

Versace 27

YSL 33Corbis


21/23


to the consumer a nd also that their brand

message remains consistent and aspira-

tional. It is important to remember that

it is always the brand that is the luxury,

and not always the inherent product it-

self. All too often enough for many lux-

ury brands, doing something worthwhile

on digital means building an immersive

experience through augmented reality,

or creating engagement through a so-

cial-media voting activity. Such examples

as these are not appropriate for a desired

luxury consumer or for a luxury brand to

hold on to its premium positioning. When

digitally communicating luxury proposi-

tions, brands should only communicate

relevant value to their consumers that de-

liver strong brand values and dont go too

far as to become diluted or damaging.

Indeed this effort is slowed by brands

within the luxury category globally, who

continue to generate generic content,

deploy Flash websites, which also lack

e-commerce, fail to provide segmented

and targeted email programmes, and in

many cases are without any social plat-

form. What remains to be true is that

many luxury brands continue to see the

Middle East as an

therefore do not s

place to consolidat

CONTENT IS KINGThis is exasperated

governance and c

communication an

deviation from ca

strategy and tone o

brands become ins

al and as consume

evolve, demand fo

undoubtedly grow

LUXURY AND THE DIGITAL SPACELuxury brands can no longer ignore the

power of the digital sphere and must

certainly harness its reach and integral

importance to secure and enhance their

brands future. As we have seen, many

brands are leading the pack and trying

new digital platforms and advancements

to improve their properties, and yet for

the majority it still remains a daunting

prospect. Nevertheless, while luxury

brands may have fears about the digital

world, it has many opportunities. It al-

lows for instant and relevant engagement

that is audible, visual and interactive,

while remaining aspirational. It also of-

fers brands platforms on which they can

create original content that is specic and

targeted for a market, a space in which

to develop e/m-commerce and where

everything can be easily and affordably

changed per product range, season and

region. For the ever-changing habits and

developing desires of the luxury consum-

er, particularly here in the region, this

can no doubt be the most effective way to

generate and sustain relevant connection.

This is, of course, not to say that luxury

brands should forget traditional advertis-

ing mediums and other forms of engage-

ment. An integrated, non-linear strategic

approach is consistently the best way for

deeper brand enrichment, and to keep up

with their consumers rapidly developing

buying, research and media behaviours

which are spanning all platforms simul-

taneously.

Across and throughout everything that

luxury brands do and produce in the

digital space, it is imperative for them to

remember their end consumer and their

context, to ensure that that it is relevant

CONCLUSION

GettyImages

TOP FIVE SCORING BRANDS TOTAL DIGITAL COMPETENCY (117)

Burberry (F) 48

Clarins (F/C) 41

Piaget (W/J) 40

Armani (F) 40

Ralph Lauren (F) 38


22/23


ABOUT LUXHUBLuxHub began in 2012 and has since set

out to become the regional voice for lux-

ury intelligence and media insight. From

the latest in luxury and media news to

insightful interviews and hot topics and

trends, our aim is to provide the region

with locally produced, original content

that specially has the Middle Eastern

luxury industry as its focus.

At Havas we pride ourselves on beingat the forefront of trends, developments

and communications that affect and in -

uence the luxury industry as a whole

and its consumers. So, for us, LuxHub

is a digital representation of our passion

to achieve this and a space on which we

can express and share our expertise, our

thoughts and our creativity for both our

clients and the wider luxury and media

communities.

Updated on a weekly basis and with a

monthly newsletter from the Editor, we

hope that LuxHub can generate changeand ignite passion for local content

and thought leadership in the region,

and will ultima

luxury content e

regions users w

of this rst and a

Outlook.

The Luxhub Ins

Digital Outlook

this year. It wil

compare 2014

report, but also l

content itself wwritten and how f

ing the regions lo

ABOUT HAVAS MEDIA MIDDLE EASTHavas Media Middle East is living a great

momentum. Our mission is to Change

Faster for our clients and our industry,

and over the past several years many

changes have happened, both in terms

of our company structure, our ideolo-

gies and methods, but also in the clients

we handle. We are a hub of international

talent which plays a pivotal role not only

within the region but also with our exten-

sive Havas Media Group global network

the worlds fastest-growing media group,

operating in over 126 markets around the

world.

As a company, our unique, simple and

agile structure is created to promote

integration, digital expertise and uen-

cy at the core of all our operations and

services. Our commitment to a digitally

integrated operating model is represent-

ed by Havas Digital Middle East, which

operates across both media and creative,

and reects Havas continued commit-

ment to digital at the core model. As a

result of our simple corporate structure,

we ensure our clie

creating a unied

can focus on delive

er than reporting i

chies. By placing t

the heart of what w

being change agen

ACCREDITATIONSStrategy and Development

Piero Poli, General Manager

Havas Digital Middle East

Houda Tohme, Deputy General Manager

Havas Media UAE

Darius LaBelle, Client Services Director

Havas Digital UAE

Content and Written Analysis

Amelia Priday, Marketing Executive

Havas Media Middle East

Creative and Production

Ciaran Bonass, Creative Director

Havas Digital UAE

Aldar Kurdi, Interactive Senior Art Di rector

Havas Digital UAE

APPENDIX

no doubt have to loosen. In terms of lo -

cal content, advertising and product pur-

chasing many brands still do not take into

account the cultural differences and tra-

ditions compared to the West. Moreover,

they continue to believe that because

English is spoken so widely, they do not

need to have Arabic content. But consum-

ers are demanding it, and we can see that

through more time spent online, product

research, social media and the rise of

e-commerce that the priority and desire

is here. From another proprietary Havas

study, (Luxury Brand Perceptions and

Habits 2013) we discovered that a resolute

84 per cent of respondents would prefer

for global brands to use local media con-

tent to carry their global brand message

and image to the region. Therefore, we

must have more Arabic content, media

and sources for luxury brands to fully en-

gage the luxury consumer and, advance

the luxury market in the Middle East to

the next level.

The Arab world is an increasingly hungry

consumer of content, however, as we have

seen, luxury brands do not seem to be

producing much that is regionally specif-

ic, and therefore leaving globally generic

content continuing to consume the digital

space. From websites where we saw poor

regional presence and minimal localised

content, to many brands failing to have

even the most basic of website function -

alities, it is a stark reality to face. E-com -

merce will undoubtedly increase, but is,

however, hindered in the region by sev-

eral payment and delivery issues. Social

media, again, will play a more important

role for luxury clients, but until the brands

begin to engage in Arabic, progress will

surely be slow. The same issue arose

across all the sections that were analysed,

yet it was a few leading brands in mobile

that really showed the most promise for

the local consumer and regional con-

tent. Perhaps mobile and tablet platforms

will show the fastest increase in region-

al content, commerce and technological

advancement for luxury brands, maybe

with brands altogether passing over web-

based content and commerce. Although

this is purely conjecture, what we must

understand throughout this paper is that

luxury brands are on a continuous jour-

ney towards enhancing their digital prop -

erties, albeit slowly in the region, and at

the heart of this is the realisation that the

production of local content and relevant

value is pivotal.

Content is key to driving creative and

meaningful advertising, and should al-

ways be seen by luxury brands within

a context specically that of the Arab

world. To harness and control this, brands

must contextualise their global content

and media, to make it relevant and en -

gaging for the local regional consumer,

to maintain a brands, a consumers and

the medias environment identities in this

ever-growing mass world. Specically

for the Middle East, brands need to com-

municate with modernity and cultural

thoughtfulness, to develop original con-

tent and contextually driven advertising

that isnt globally generic to ultimately

ensure the growth of the luxury industry

and the growth of the region altogether.


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