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How Social Channels Are Thriving in the Changing Nature of the Luxury Landscape

By Bella Backwell

Over the past few years, the luxury landscape has evolved – and brands need to shift their marketing tactics to keep up. One of the most notable developments is the changing target audiences for luxury brands, as younger consumers are becoming more significant. In fact, it’s predicted that 75% of luxury consumers will be Gen Z and Millenials by 2026. 


How Social Media Creates Success

Given that Gen Z and millennials are set to make up a large portion of luxury consumers over the next two years, it’s no surprise that social media will continue to play a huge role in the luxury landscape. However, in this oversaturated market, what makes some luxury brands rise up over others? 

There’s an obvious correlation between social media share of voice, which acts as an indication of visibility as it demonstrates how often brands are being spoken about online, and the success of luxury brands. In 2023, the top five most valuable luxury brands put Louis Vuitton at number one, followed by Hermes, Chanel, Gucci and Dior. These familiar favourites also have a very high share of voice on social platforms – pointing to a clear signal of just how important a strong social presence is for success.

Making a purchase from a luxury brand is no small decision, and often involves extensive research before committing to the higher price point. Brand visibility and product knowledge is important for consumers across their whole customer journey – from discovery, to research, to making a purchase. 

Social media can help luxury brands reach their target audience, so it’s important to understand where they’re spending time online. Instagram is currently the most used social media platform for Gen Z in the U.K., with 71% of this group using it. TikTok is also hugely popular, with 70% of U.K. Gen Zers jumping on the platform daily. 


Using Paid Social to Amplify Advertisements

It’s clear that social channels are where luxury brands need to be to reach their audience as the landscape continues to shift. As it becomes more skewed towards Gen Z and millennials, investing in paid social media advertising to reach this audience is important. 

Paid social is key to optimising campaigns by enhancing targeting capabilities and improving interactivity across platforms. 

“Paid social advertising can be a powerful tool for luxury businesses to reach new, high-potential audiences with the right message at the right time,” says our Senior Paid Media Account Executive, Rhian Biggs.

“Thanks to sophisticated ad formats and the power of AI, we can create highly personalised experiences based on individuals’ interests and engagement. This helps to build stronger relationships with new and existing audiences and evokes the desired action.”

At Tug, we’re helping brands harness the power of paid social to effectively execute campaigns to target audiences, driving brand awareness and engagement in specific markets. For luxury brands looking to tap into a younger audience – a paid social strategy can help reach these consumers where they’re spending time online, with messaging that resonates with them.

With the changing nature of the luxury landscape, it’s clear that social media platforms will only become more crucial to brands’ marketing strategies. Naturally, factors like quality and price are still paramount to a luxury brand’s profitability, but storytelling through social media is key for success.