2024 Douyin Luxury Industry Summit: Navigating Audience Segmentation and Content Innovation for Omnichannel Growth
The “business challenges” confronting global luxury brands have intensified in recent years, transforming into a widely recognized predicament. According to the collaborative “Luxury Goods Worldwide Market Study” released by Bain & Company and the Italian luxury goods manufacturers’ industry association, Altagamma, the global luxury market anticipates a decline of 1% to 3% in the first quarter of 2024. Amid this backdrop, regional markets have witnessed a universal slowdown in growth, prompting major luxury brands to recalibrate their strategies through price hikes, exploration of new avenues, and innovative approaches. The industry stands at a pivotal juncture, facing divergent paths of development.
Amidst these challenges, luxury brands grapple with three primary marketing hurdles: Firstly, how to pinpoint their target audience and gain granular insights into their evolving needs? Secondly, how can they effectively engage with consumers and foster swift connections? Lastly, how to assess the efficacy of their omnichannel marketing efforts, both online and offline? Opportunities often emerge amidst adversity, and in the first half of 2024, the Gross Merchandise Value (GMV) of luxury goods on Douyin surged by over 45%, underscoring the platform’s emergence as a pivotal business arena for luxury brands. However, success hinges on the ability of brands to harness Douyin’s potential and adeptly address these challenges.
To assist luxury brands in breaking this stalemate, Ocean Engine convened the “Spark Creativity, Endless Exploration—2024 Douyin Luxury Industry Summit” on August 20th. The summit showcased Douyin’s holistic solutions tailored for luxury brands, encompassing precise audience targeting, scientific content production, and comprehensive brand metrics. These solutions aim to empower luxury brands to connect with emerging consumer demands, capitalize on new marketing trends, and expedite the enhancement of omnichannel experiences.
Segmenting Luxury Audiences Based on Diverse Scenarios: Empowering Brands to Identify and Engage Their Ideal Customers
Douyin, with its vast ecosystem of creators and over 600 million daily active users (DAU), boasts a cross-generational audience with substantial consumption potential. The quintessential challenge for luxury brands lies in accurately identifying target audiences characterized by high economic status, cultural sophistication, and a relentless pursuit of quality amidst the vast sea of data. This stands as a paramount issue in luxury marketing today.
In 2024, Ocean Engine Yun Tu offers a repertoire of over 2.3 million audience profiles, enabling luxury brands to undertake precise segmentation based on scenarios. By leveraging the core, potential, and interest-based luxury user segments, luxury brands can swiftly target their ideal customer base and achieve efficient communication and conversion.
For instance, scenario-based segmentation has highlighted three refined audience groups garnering significant attention: subcultural enthusiasts, highly educated international students, and overseas travelers. These cohorts blend subcultures with mainstream aesthetics, challenging conventions and fostering diversity in fashion’s gender expression. They hail from economically privileged backgrounds, often with international education, and aspire for a lifestyle imbued with quality. Their penchant for overseas travel and curiosity about new cultures frequently culminates in luxury purchases during their extravagant travel experiences.
Retaining consumers represents the next crucial step post-identification. According to industry projections, Generation Z (born between 1995 and 2009) is poised to contribute 100% of the incremental growth in China’s luxury market, making them a paramount target audience for luxury brands. With rapidly evolving behavioral patterns and preferences, Gen Z consumers demand heightened content quality amidst fragmented timeframes, necessitating luxury brands to engage them with consistently innovative content formats.
Douyin, as a premier platform for diverse content formats, encompassing trending events, popular content, micro-series, short dramas, interactive creativity, and more, offers advanced technological tools to bridge the gap with consumers. These include precise facial recognition, enhanced AR/VR capabilities, and accurate tactile simulations, enabling brands to effectively engage and nurture their target audience, fostering swift connections and retention.
From Brand Content to Social Scenarios: ‘OPUGC’ Ushering in New Horizons for Luxury Marketing
Luxury brands consistently generate buzz, with styles like Miu Miu girls and intellectual fashion gaining momentum on Douyin. Esteemed brands such as LVMH, GUCCI, and Cartier organize offline events like pop-up exhibitions while concurrently crafting online “sub-events” to engage with consumers. When high-quality brand content harmonizes with diverse social scenarios, crafting impactful brand marketing environments becomes more attainable.
This year, Douyin’s innovative “OPUGC” (Occupationally Generated Content (OGC) – Professional Generated Content (PGC) – User Generated Content (UGC) ) interaction model has introduced new opportunities for luxury brands in content marketing. It deepens connections with users and transforms into an impactful marketing scene for luxury brands. Unlike traditional integrated marketing strategies, the “OPUGC” content integration approach focuses on content, enhancing its value through impact, coverage, and authenticity to drive consumer engagement and brand conversion.
At Dior Fashion Week, the “DOU Content Lab (DOU来内容实验室)” segment “DOU Fashion Show (DOU来看秀)” marked its international collaboration debut with the brand by providing live-streaming technical support. It delivered a fashion show experience that consumers could fully immerse themselves in, from the opening of the show to backstage and guest interviews, all from the comfort of their homes. This format showcased and interpreted the inspiration behind the brand’s new season designs in a diverse manner. The panoramic online and offline show format allowed more consumers to experience the allure of fashion up close, enhancing the brand’s global influence.
In the first quarter of 2024, GUCCI collaborated with Douyin to launch the 2024 Spring/Summer colour trend—Ancora Red. GUCCI introduced Ancora Red through official Douyin content and engaged a celebrity network to generate buzz with the hashtag #AncoraRedSpreadingThroughoutTheEntertainmentIndustry. By leveraging influencers from various fields who visited Ancora Red spaces both online and offline, the campaign sparked spontaneous interactions from the public. The #AncoraRedCelebrityCityPhotoShootChallenge continuously generated a wealth of original and derivative content, resulting in a closely integrated online and offline brand trend-setting event.
The question that luxury brands have always been concerned about is, “How is the effect of my current wave of delivery?”, “What kind of content does my ‘TA’ like?”, rational and emotional marketing result measurement, how to measure the accumulated brand value of marketing actions? Douyin Yuntu system can take into account both short-term and long-term measurement and track long-term brand power.
From a perceptual perspective, in the short term, we can use search + SOV + NPS (recommendation value to others) to measure brand power, and in a longer period of time, we can conduct multi-dimensional brand image insights such as voice, association, reputation, preference, etc., and expand to a measurement system for measuring brand image.
From a rational perspective, its Campaign cycle tracking capability covers the early, middle and late stages of the marketing plan in terms of time span, and with the 5A and A3 basic models, it provides brands with a mature scientific marketing full-domain measurement system.
By leveraging the synergy between online and offline capabilities, along with Ocean Engine Yun Tu’s brand image metrics framework, and integrating brand-specific audience data with efficiency tracking from third-party platforms, luxury brands on Douyin can achieve precise front-end marketing and reduce acquisition costs. They can also validate comprehensive business results across the entire chain, continuously refining marketing strategies and exploring additional omnichannel business opportunities both online and offline.
The 2024 Douyin Luxury Industry Summit not only provided brands with comprehensive solutions and practical cases but also showcased the enormous potential of Douyin in the luxury industry.
