American Marketer


Implications of convergence for luxury brands

April 18, 2012


By Budd Margolis

After many years of predictions, the era of convergence has arrived and soon you will begin to notice that old-school terms such as newspapers, magazines and television will be replaced by the singular term “content.”

Technology will spread quicker, especially throughout fast-growth developing nations as smartphones and smart TVs gain ground.

All formats of media are blending and this will cause stress to luxury marketers and brands which do not get in front of the curve and start innovating.

Consumers will gain even more control over their applications as they demand personalized and secure systems that save time and cash and deliver truly exciting offers. Today’s consumers want innovation, delight and entertainment in their retail relationships.

Counting on change
Digital commerce is driving new methods and systems at tremendous speed.

Globalization and worldwide income growth increased and there is convergence and similarities between market and consumer characteristics.

Asian consumers now spend more on food per head, but less as a percentage of income, than ever before.

We already use mobile phone and location offer services to drive proximity based customers across the doorway and flash sales have enjoyed fast growth throughout the world.

Many new sales systems will develop and we can trust that they will continue to evolve and change.

More so than at any other time in commerce, most will not survive, some will have short but spectacular histories and a few goliaths will emerge to replace once legendary brands. Change is faster and the consequences will be more severe.

There are several significant trends emerging.

Women are starting to use Facebook instead of the TV guide, more than half of the audience is either accessing their mobile or are online with a tablet or laptop and interacting with friends during programs.

Viewer response to programs has become a significant revenue source while traditional advertising has been over taken by Web-based advertisements. Social media is still a hot area, it is not a trend or a fleeting fad, but it too will need to mature and deliver much more.

My experience in the world of ecommerce and TV shopping has taught me two very important lessons.

The first is not to make market and consumer decisions based upon my personal prejudice or bias and the second is to listen to the consumer and respect what they want. Learning to listen is a constant life lesson requiring super human discipline and patience.

What does this mean to the top luxury brands?

Consumers want to trust a brand in exchange for their loyalty and share of purse.

Time is generally more valuable than money, precise offers targeted to profiles will save them hassle and relievable and rewarding customer service is a highly valued feature.

Feelin’ good
Delivering the feel-great factor is not a trivial task.

Customer delight has to be delivered time after time to truly engage and connect with today’s busy and marketing message drenched consumer. I think they also want to be entertained and spoiled. A well thought out a strategy can be delivered at a small expense but can have a significant impact on customer spend and value.

Getting the message across, as the Internet changes from a graphic-based format to an interactive video-driven media will require the ability to condense messages and offers into interesting clips with viral potential. In other words, the dark art of direct marketing without the hype, tacky graphics, tatty product and obnoxious repetitive calls to action.

And instead of throwing cash in a shotgun delivery system, digital convergence offers individual tracking and measurable results.

Convergence therefore requires luxury brands to perform as entertainment, treat their loyal brand followers with respect while they manipulate their database and profiles to provide and enable true customer benefits. Do that well and the rewards will follow.

Budd Margolis is television shopping and ecommerce specialist in London. Reach him at