The importance of data for luxury retailers is paramount, with data impacting many areas of their business. As digital marketers we endeavour to create a personalised experience, moreso in the luxury space, however, the continued and growing changes of user expectations and behaviour mean the privacy landscape has changed.

It’s becoming more challenging for data collection as individuals look to gain more control over how their personal data is processed and used.

While retailers have been adapting and changing strategies in light of these changes, there is still uncertainty around the elimination of third-party cookies across Google in 2024, what it will mean for marketers and our strategies. With the roll out of Google Analytics 4 (GA4) earlier this year, which introduced a range of new privacy features, there is still a lot of conversation and concern around the platform, such as data discrepancies and limited historical data.

Luxury ecommerce retailers need a big change in strategy, targeting, and reporting and they need to pull back the reliance on platforms with limited access and transparency.

Following Apple’s opt-in tracking in 2021 advertisers lost 30% of accuracy on targeting algorithms overnight and reporting became more challenging, particularly over different attribution models, and a number of advertisers saw rising acquisition costs and decreasing ROAS.

It’s more important than ever that brands look inwards at how owned data is used and collected and how we begin to communicate with customers creatively to build experiences they want to engage with. Many brands have already begun to do this well, with strategies such as value exchange lead gen, questionnaires to find products which suit the customer etc.

The luxury purchase is often a more considered purchase (we have seen a number of luxury brands that we work with typically see ~30% of their revenue after 2 days or more from their first ad interaction). Therefore, creating these experiences to build rapport and create opt-in opportunities is highly beneficial.

We have outlined four areas luxury ecommerce brands should focus on to navigate these changes and support their marketing efforts.

#1 - Review how you are reporting back and understanding success

There is a notable shift back towards Marketing Mix Modeling (MMM), a model that gained popularity in the 60s but lost momentum as single-channel digital measurement became more reliable.

However, in a modern multi-channel world, a campaign could now encompass everything from paid and organic social media to Google Ads, broadcast advertising, billboards, public relations, and more, making it much harder to track the contribution of each channel.

Add to this cross-device customer journeys and the increase in cookie restrictions and it becomes evident that alongside an MMM approach, other, newer forms of data modelling need utilising to help brands better understand the contributed impact of marketing activity on the top-line.

These include solutions such as Robyn from Meta, an open-sourced, semi-automated Marketing Mixed Model, which, and this is key given recent updates, is private by design.

This means it isn’t wholly reliant on cookies or pixel data, working instead with what Meta calls the ‘ground-truth’ to allow companies access to advanced, privacy-safe, marketing analytics that align with the ever-evolving digital landscape, digital consumer behaviours, and digital marketing ecosystem.

In turn, this allows for actionable decision-making when it comes to budget allocation and reach.

#2 - Implement Conversions API (CAPI) across Meta

As advertising is substantially reliant on data, the ever-changing privacy landscape can make it more difficult to obtain and use data. This is why companies such as Meta have been implementing additional data collection strategies and, for Meta, this is where their Conversions API (CAPI) comes into play.

Meta define CAPI as: "the Conversions API allows advertisers to send web events from their servers directly to Facebook. Server events are linked to a pixel and are processed like browser pixel events. This means that server events are used in measurement, reporting, and optimization in the same way as browser pixel events.”

This works to create a more direct, and reliable, connection between marketing data and Meta itself, which can cover everything from website and app events to offline conversions.

Why is this helpful? Well, due to the constantly evolving restrictions, attributing conversions to campaigns has become more difficult, however, CAPI works to fill the conversion gap helping to enhance targeting, create more personalisation, and optimise ads to decrease cost.

#3 - Implement Meta first-party data

As well as incorporating your own CRM data, VIPs, lapsed customers, and more into your strategy, there’s also a good opportunity to lean into platform first-party data, using ad engagement as re-marketing tactics, using influencer audiences and data, page followers, and more to better improve reach, targeting, and conversion.

A recent report from Meta in 2023 highlighted the importance of this data is, with those using effective first-party data marketing seeing:

• 27% increase in conversion rate
• 23% increase in customer satisfaction
• 20% increase in spend per customer
• 18% reduced acquisition

It also highlighted how brands can better power ads by integrating first-party data into their ad mix, and showed how this can be done through Meta to create a much more strategic approach in the current market.

#4: Adopt Advantage Plus Shopping

Finally, there are now ways to reach customers with a higher intent of purchasing through not only Meta, but other digital platforms too.

Last year, Meta launched Advantage Plus Shopping, which automatically optimises your targeting, creative, and the placements of your campaign to provide more dynamic responses to reach audiences more likely to purchase the product on sale. Overall, this appears to have worked globally and improved ROAS.

Alongside Meta, other platforms have introduced similar systems to reach potentially untapped audiences.

TikTok, hugely popular with Gen Z, recently launched Smart Performance Campaigns (SPC), making it easier for advertisers to maximise results within the app. Here, however, you have to put your trust in TikTok and let the machine learning systems do the work.

There’s also Google Performance Max (Pmax). This utilises Google AI across bidding, budget, optimisation, audiences, creative, attribution and more to benefit your ads regardless of the strategy. The benefits this can bring alongside better performance include unlocking new audiences and more transparent insights amongst others.

Final thoughts

With the landscape continuing to change and develop, privacy will continue to increase as we move forward, meaning access to data will become tougher.

• Brands need to consider the value incentive for data sharing, and how customers will benefit from giving their data.
• First-party data is so valuable, as it allows brands to continue with a more personalised approach and nurture customers.
• Brands should be looking to invest more in retention through incentives such as loyalty and VIP membership programmes, and what they offer, as these can help enhance the customer journey and provide that valuable data required.

If you want to discuss how to approach data for your luxury brand, get in touch.