Luxury retail as we’ve known is over. It’s ‘last season’ exclusivity and high barriers to entry are shifting toward online democratization. Critical to this redefined luxury is an effortless curation of content, community and commerce tactics to win the hearts and wallets of digitally and socially aware consumers.  

Let’s look at how successful luxury brands are using DTC marketing tactics to reach new audiences. 

Content: From Fashion House to Content House

the core of any direct-to-consumer model is the creation of content and the spurring of relevant discussions among loyal customer bases and beyond.

From curated city guides to an Instagram feed that gives Vogue a run for its money, Louis Vuitton’s Louis Vuitton City Guides has a firm grip on the digital content pulse.

These guides highlight must-visit sights, stores and snacks in major cities across the globe, offering customers a glimpse of the world and what it’s like as a Louis Vuitton jetsetter. With new cities added frequently, Louis Vuitton is keeping customers engaged with more insider guides and luxury travel accessories to outfit their journeys.

Additionally, brands like Moncler are vying for a Gen Z following on digital platforms such as TikTok, which has been steeped in DTC marketing since its inception. Through its #MonclerBubbleUp challenge, Moncler leveraged both paid and organic content marketing – including dynamic products, collections, and lead generations ads – to reach nearly 7 billion impressions including those from followers who used #TikTokMadeMeBuyIt when featuring Moncler products in their content.

Community: Access to Luxury Doesn’t Have to be an Alternate Reality

In the old days of luxury retail, tight-knit brand communities were often limited to those in the upper-echelon of customer spending. The feeling of exclusivity and access was often formed through limited in-person shopping experiences with customers donned from head-to-toe in the brands’ latest offerings. 

Today, brands are moving these communities and their associated status symbols online. In the digital world, consumers have a direct route for engagement with brands through their DTC marketing channels and content – and feel closer to brands beyond a purely aspirational intent to purchase their goods.  

Gamification is one such method brands are leveraging to redefine what it means to be a part of the luxury community. For example, in honor of its 100th anniversary, Gucci aimed to spur engagement among its online communities. To do so, they teamed up with Roblox to launch the Gucci Garden Experience, a digital experience experiment in the metaverse. Users were transported to ornate showrooms where they could browse and interact with digital versions of exclusive Gucci products. They also had the opportunity to ‘purchase’ luxury items to ‘guccify’ their metaverse. The event spurred visits from more than 1 million Roblox users.  

By departing from tradition and leaning into democratized innovation, Gucci led a luxury brand movement toward new ways of engagement through innovative spaces and online communities, ultimately creating a loyal customer base.  

Commerce: See Now, Buy Now

Fashion Weeks across the globe are known for their exclusive invite lists and designs. However, brands leading the way in the new era of luxury are challenging fashion week norms and creating increased access through a ‘see now, buy now’ approach. This allows viewers to purchase designs in real-time as they are revealed on the runway rather than waiting for exclusive commercial releases and has so far taken the latest New York Fashion Week by storm.

For example, the Dundas x Revolve show experienced a sold-out collection in lockstep when its pieces sauntered down the catwalk. Luxury stalwarts like Altuzarra, Oscar de la Renta and Rodarte also leveraged the see now, buy now commerce model and included live streams of their shows to increase access and encourage purchases among raving new fans.

What’s in ‘Store’ for Luxury Online

Using real-time engagement features – including live streams of product presentations – Tmall’s Luxury Pavilion of digital shops can connect brands and their customers together to spur more personalized digital shopping experiences. With over 100,000 monthly active users on the Luxury Pavilion accounting for nearly 45% of total spending on the Tmall site, the demand for bridging online and offline luxury retail experiences through DTC marketing tactics is strong.

“Direct-to-consumer principles are creating a lasting impression on luxury brands, and in turn, creating engaged.”

If you walk around a trendy neighborhood in any big city these days, you’ll find it sprinkled with stores of DTC heavy-hitters – Parachute, Lunya, AllBirds and the like. Since these success stories made it through digital channels, why is turning to physical retail suddenly the new DTC trend?

Take DTC darling, Warby Parker, as an example. Warby Parker, the prescription glasses and sunglass retailer, came charging into the scene in 2010 and quickly disrupted the category with a digital-only strategy. However, it opened its first physical store in 2013.

One might think Warby’s stores could cannibalize its online sales – with higher overhead – but co-founder Dave Gilboa says that’s not true: “Once we open a store, we see a short-term slowdown in our e-commerce business in that market. But after nine or 12 months, we see e-commerce sales accelerate and grow faster than they had been before the store opened. We’ve seen that pattern in virtually every market.”

In September 2021, Warby Parker went public with a $3 billion valuation and pitched a growth strategy centered around stores (the brand currently has 145 in the U.S. and plans to open more).

How is Brick and Mortar Changing the DTC Ecosystem?

1. High Customer Acquisition Cost

One reason DTC companies go offline is because of rising digital customer acquisition costs (CAC). While acquiring customers through digital marketing was once a cost-effective model, as more retailers (including major brands with big budgets) have upped their digital marketing game, the price of digital advertising has skyrocketed. Over the last five years, CAC has risen by more than 60%, according to ProfitWell.

Believe it or not, even when opening physical stores in expensive and upscale locations like well-known New York City neighborhood SoHo, it’s often more cost-effective for DTC companies to gain customers through high foot traffic locations like these, rather than solely relying on digital marketing acquisition.

In part, this is because DTC companies aren’t opening big-box retail stores. To acquire customers, all they need is a well-designed, curated space. Many, including Casper, Bonobos and Framebridge, have even adopted an inventory-free showroom model.

2. Necessity of Omnichannel to Scale Growth

Many DTC brands reach a point when using an omnichannel strategy becomes necessary for growth. No DTC brand has achieved $1billion in annual revenue without stores. Customers shop through multiple channels, and brands need to meet them where they are. This becomes especially important when DTC companies approach the IPO stage. They need to show investors they can turn a profit, and that’s simply very hard to do exclusively through digital channels.

3. Brand Awareness

Physical footprints are a great way to increase brand awareness, which can boost sales through all channels. MeUndies, for example, partnered with Nordstrom to create a physical footprint. Additionally, some DTC brands, such as Naadam, report that while sales from the stores themselves may not be huge, they saw an increase in digital sales from customers in the markets where physical stores are located. In this way, stores essentially serve as strategically positioned advertisements in areas densely populated with target customers.

4. Using Experience to Build Community and Brand Loyalty

A physical store is also an opportunity to build community and increase brand loyalty. DTC brands can leverage deep customer knowledge acquired through their digital success to design engaging in-person experiences to complement other sales channels.

“Over the last five years, CAC has risen by more than 60%, according to ProfitWell.”

Yoga apparel brand, Alo Yoga, adapted to this DTC trend well. In 2007 the brand started selling ‘street fashion’ yoga apparel and opened its first store in Los Angeles in 2016. At its store location, in addition to browsing Alo’s activewear, customers can take workout classes, grab a coffee and even conduct a business meeting from one of its lounge areas – all in a beautifully designed space, centrally located to where they live, work and play. Alo has since opened a second flagship location in New York City, as well as with smaller locations in California, New York and Texas.

Since opening physical stores, Alo’s growth has accelerated, as demonstrated by:

• Acquisition of yoga app Cody in 2018 which was rebranded to Alo Moves (on-demand classes)
• Expansion into the beauty space in 2020 (The Glow System)
• Inclusion on Fast Company’s “Most Innovative Companies” list in 2021

While they don’t officially disclose revenue, Alo reported it to be around $200 million annually as of 2020.

This is most certainly our favorite time of year. The heat of summer is over, the kids are back in school and we are graced with the beautiful, bright crisp fall days driving optimism for next year’s outlook.

It is, therefore, that time of year for business planning, forcing us to self-reflect and understand what worked, what did not work, and how we can continually grow and improve ourselves, our teams, and our work to help unlock uncommon growth.

We’ve composed the essentials that are common across successful marketing plans, as well as a few ideas for making the planning process run a bit smoother.

1. Reflection and Introspection

You might think to start your planning with a bit of retrospective from last year. Try and involve as much of the team as you can and also include wider business partners such as product, finance and sales. Run a classic agile retrospective with the three questions:

1. What worked well last year?
2. What didn’t go as well last year?
3. What could we do differently next year?

You can then work with your leaders to filter through and incorporate your findings into the year ahead. Some organizations may even work with a summary of this as the front section of the plan and use it as a chance to share success.

2. Strategy as Your Guiding North Star

We get asked a lot “Is this our marketing strategy or our plan?” The answer is usually both, however, the distinction is important; you cannot have a good marketing plan without a strategy.

Your strategy needs to set your north star. It should be completely aligned to the business strategy and the key pillars for the year (we tend to call them big moves).

Your marketing strategy should therefore layout what marketing needs to do in order to support those moves next year. The plan articulates how you are going to get there, including the specific tactics you will deploy. Underlying the plan will be resources (who) and capability alignment (enablers) to show how you execute the plan. Lastly, you need to provide a budget, identify headcount needs and have a measurement approach. With some organizations, we also find it helpful to do scenario planning—i.e., what we will do anticipating market shifts or if we fall short— or surpass — expectations.

3. Planning for Your Audience

It’s important to anchor your plan in both customers and prospects, on two levels:

1. Firstly, be clear to address how the businesses’ customers/markets are changing. Identify where specific changes in behavior or needs may impact how your organization thinks about the marketing tactics for the year ahead.
2. Secondly, understand what key audiences/segments, both within customers and with prospects, will be the focus for the year. These needs must map to your corporate strategy and mission.

This work should help sequence activities based on where the priorities lie, and where the greatest opportunities are to achieve the organization’s marketing goals.

4. A Framework for Planning

One of the things that can slow down marketing planning as well as the integration of the plan with other teams (particularly sales) is language. We tend to find that teams use a multitude of terms for both defining the process and measures of success. There are two areas that are useful to align upon early in the planning process.

Within the process, be super clear on what you mean by the strategy and the plan, and how it all hangs together. The following is an example of how this might appear. Your business will have your own terminology, so it’s important to design a structure that will fit your internal language.

The second part is aligning to the sales funnel. How the different stages of the funnel are defined is critical to driving successful marketing performance.

If you are in the world of B2B marketing, the sales funnel becomes increasingly complex as you plan to align on leads and how they are defined. Make sure to define the process between marketing sales, and when sales accept a lead as qualified.

The planning cycle is a good time to review these with your sales team and see if the handover needs improvement for the coming year.

5. Hitting the Key Points and High Notes

Be pithy. Your marketing plan does not need to be a 250 slide PowerPoint deck; we all know what happens with those! However, it does need to include the following critical components to assure a comprehensive marketing plan is clear, tailored, and impactful.

1. Plan Summary: Overview of the key objectives, metrics/numbers, and tactics for the year, and the key learning from last year
2. Business Goals/Strategy: The objectives of the business for next year
3. Customer Needs: How are we addressing the needs of customers and prospects
4. Challenge: How marketing will be supporting the business goals
5. Market: Direct and indirect competitive positioning, moves and SWOT
6. Actions: 3 – 5 big moves/activities for the year – should be aspirational, inspirational
7. How/Tactics: Details on how these will work (might break down by areas)
   • Segments and audiences
   • Customer marketing insights
   • Media planning
   • Messaging and content
   • Product marketing
   • Sales enablement
   • Pricing and value
8. Measurement: How will we measure success through the year
9.  Our people: Roles, responsibilities, skills, learning
10. Interactions: How will the team interact and work within other functions
11. Enablers: What capabilities/vendors/partners do we need to support its success
12. Consolidated Plan: Detailed Q1 or 90 day – high level subsequent
13. Budget Allocation

6. Plan, but Don’t Over Plan

We all know things don’t go to plan, and that’s okay! Markets change, competitors don’t stay static, and certainly, customers and prospects don’t always do what we think they will do. It’s what keeps life interesting.

Agility wins when it comes to developing a strong marketing plan. It’s key to plan by quarter, but with varying degrees of detail and anticipate shifts and adjustments along the way. We suggest having a very detailed plan to execute your first quarter, and then focusing on higher-level key objectives and tactics for the subsequent quarters. This will allow you to still plan for resourcing, budget and capacity while remaining flexible to inevitable changes along the way.

7. A Living, Breathing Plan

The easiest way to stay true and on track with goal setting is to break down the goals into smaller, actionable goals and achievements. The same resonates when creating a comprehensive marketing plan for the year. Create a structure for the plan that allows you to run mini-plans. Investing in mini planning in the upfront will further allow for progress, flexibility and little wins to motivate and drive your team’s success.

Create a quarterly and monthly version of your plan. We advocate for a quarterly plan that includes a two-week cycle and starts mid-way through the quarter to outline detailed planning for the next quarter. In addition, it is smart to plan for a monthly review process – just a day or two, during which teams share progress against the plan, and propose any short-term tactical changes necessary. This will help keep your teams on track, avoid over-planning and remain agile while focused on achieving your overall goals.

8. Have Dedicated Air Traffic Control

You should assign one member of your team (or possibly a 2-3-person team) to run the process end-to-end, manage meetings, facilitate working sessions, problem solve and produce the outputs. It can be hard to free up internal resources, especially when a plan needs someone to play multiple project management and cross-functional roles, and many use this as a side of the desk role. However, you ideally want someone as a full-time resource for the strategy and plan. An outside partner can be helpful here and you should resist using your current advertising agency partner to facilitate as this may drive conflict of interest. Day-to-day external partners may, however, be valuable contributors.

Typically, most of these are best in working sessions 2.5 – 3 hours long. The number of these sessions is dependent on the size and complexity of your teams, as well as how much work has already been completed in advance.

“You cannot have a good marketing plan without a strategy.”