Digital technologies are increasingly instrumental to brand success, powered by the growth of social networks, e-commerce platforms, messaging tools and others. These tools enable businesses to create and magnify connections between individuals, products and influencers, with strategic implications for brands. By fostering greater transparency, technologies such as social media potentially undermine brands’ exclusivity by producing unfiltered content about how consumers interact with brands (for example, mixing and matching clothes, wearing counterfeits).
By multiplying content visible to everyone about high-end products and implicitly highlighting their similarity, social media can also undermine the value of products and nudge consumers to turn to experiences. Indeed, the data show consumption spending on material products grows significantly less rapidly than that of experiences. Many luxury brands are investing heavily in providing luxury experiences and using digital tools to improve those experiences, as experiential consumption can sustain the unique characteristics of brands and defend their high-end status.
My recent research also shows that companies can gain significant competitive advantage by using ‘big’ data generated by humans when they interact with digital technologies. I identified four key data sources that, when combined, significantly enrich brand strategies. I call them the 4S data: search data, which reflect what people are looking for on search engines or e-commerce platforms; social media data on what people like, share or post on Facebook, Instagram and other social networks that reflect public sentiments about brands and products; site data recovering websites’ visitor journeys; and shop data, providing real-time feedback on the market success of products and services.
For instance, I analysed, together with data scientists from Swiss-based company TSquared Insights, millions of search queries about luxury watchmaking. By estimating correlations in search proximity between brands, we were able to generate search-based perceptual maps reflecting consumer behaviour in this industry.