Last month, Kylie Jenner became the world’s youngest self-made billionaire of all time when she sold a 51 per cent stake in her cosmetics brand to Coty Inc. With more than 150 million Instagram followers, Jenner’s success highlights the growing influence of the platform. Here, we speak to Vogue Business about how Instagram is now impacting the fashion industry at large.
New for 2019, Vogue Business was launched to help Condé Nast capitalise on the B2B side of the fashion world. With titles like GQ, Glamour, and the original consumer-facing Vogue already in its portfolio, Vogue Business represents an astute addition to the Condé Nast portfolio that allows the group to expand upon its existing fashion industry experience.
It’s also a timely launch. As Lauren Indvik, the then Chief Editor for Vogue Business, told FIPP earlier in the year: “The fashion industry is a three trillion dollar industry.” Indvik has herself subsequently been recruited to act as Fashion Editor for the Financial Times, in a move that itself nods to the growing prominence of the fashion sector within the global economy.
With social media and Instagram in particular having played such a seismic role in reshaping the fashion conversation in recent years, we asked Kati Chitrakorn, Retail and Marketing Editor for Vogue Business, why the platform has come to be regarded as such an important marketing channel for retailers.
“Instagram has completely changed the playing field for fashion brands and has become a key element of these companies’ strategies,” says Chitrakorn. “Influencer marketing for one has become a proven marketing channel, delivering real results for brands.”
“It’s been a particularly effective strategy for those looking to reach Millennials, who according to Bain will represent 40 per cent of the global personal luxury goods market by 2025. This is because they are digitally savvy and socially connected – they tune out many forms of traditional advertising and instead look to people they can trust or whose values align with theirs.”
With a such a high emphasis on younger audiences, who have historically held lower disposable incomes than older demographics, does this mean that Instagram is best leveraged by low-cost/high volume brands that may be seeking less affluent consumers?
“I do think that many customers prefer a more affordable product when shopping online,” says Chitkrakorn. “But there’s also an opportunity for luxury brands in terms of storytelling and increasing brand awareness. Luxury houses like Chanel, which doesn’t sell core products online, have been taking Instagram seriously: it uses the platform to post runway looks, campaign outtakes and inspiration boards. It also has a dedicated beauty account.”
“Earlier this year, Dior used Instagram as the main vehicle for the promotion of the relaunch of its saddle bag. While the campaign was slightly controversial, it was a commercial success.”
As the power of influencer marketing has grown, so too have calls for greater regulation in this area. In September 2018 for example, the UK’s Advertising Standards Authority (ASA) in conjunction with the Competition and Markets Authority (CMA) issued new guidelines on transparent and ethical influencer marketing practices.
So has this increased scrutiny of influencer marketing led to brands being deterred from deploying this practice to promote their products?
“Fashion brands are spending more on influencer marketing than ever before. One reason for this is that ROI is becoming more measurable. Thanks to new technologies and tools, brands are more easily able to gain more insight into what works for their target market and also optimise future campaigns.”
“As for influencers, they’ll need to determine which metrics they want to highlight to brands seeking partnership. While engagement is key, they can also hone in more specifically on the kind of audience they have (looking at specific demographic or geographic information) or more intangible characteristics such as expertise or tone of voice. “
“I think it’s imperative for influencers to disclose a post as sponsored content if they’ve received any form of monetary payment, loan or gift for the product they’re posting about. Not only is this good ethics, but data has shown that it won’t detract from the credibility of a post and consumers will still engage, so long as the content is relevant and interesting.”
Of course, for traditional fashion magazines that have themselves been used to wielding huge influence over fashion trends, the question of ‘Friend or Foe’ will inevitably spring to mind.
As a media brand itself, how does Vogue Business find that Instagram has impacted media brands in the fashion industry? Has it taken eyeballs away from traditional publishing outlets like fashion and beauty magazines? Or on the contrary, is it sending more traffic their way?
“Millennials and Gen Z have completely rewritten the rules for how retailers sell fashion. Consequently, this has also impacted magazines. While consumers once turned to monthly glossies for tips and recommendations on what to wear, where to eat and things to do, Instagram has now become the primary place people go to for style, food or travel advice.”
“Younger consumers are already spending less time consuming print and more time on a mobile phone screen, so it’s not surprising that they were quick to embrace Instagram. Fashion brands picked up on this quickly, realising that creating good content on a highly visual platform would allow them to reach more people. On Instagram, audiences are highly engaged. They use Instagram stories to shop and can interact directly with brands in the form of direct messaging. The rise of Instagram has basically spawned the US$1.7 billion influencer economy.”
More generally, young audiences are said to be buying less and investing more in experiences. Recently, FIPP published a study in collaboration with UPM, examining the contemporary relationship between luxury brands, the media, and their audiences.
Within that, Chase Buckle, Senior Trends Analyst at GlobalWebIndex, told us: “Luxury is a term often associated with items like handbags or jewellery. But it’s come to take on a new meaning, particularly among younger audiences. It’s now about travel, household items and particularly automotive products that this segment stands out for. They’re also much more likely to have purchased an experience in the past 12 months – three-in-ten of this audience group had done so.”
For Chitrakorn, this trend reaches far further than younger audiences simply swapping items for experiences.
“People are more stressed out than ever before,” says Chitrakorn. “Analytics firm Gallup found that global reports of negative emotions have increased over the last decade, reaching a record high in 2017. What this means is that consumers are prioritising their wellbeing and looking for transformative experiences over simply purchasing goods.”
“That doesn’t mean to say that people are no longer shopping. The luxury industry is growing every year. What’s changed is that consumers are holding brands to account with increasing scrutiny over their values and ethics. Many younger consumers today are seriously concerned with social and environmental causes, and they’re backing their beliefs by where they shop. Brands therefore now have a responsibility to take a stance and put genuine purpose at the heart of their strategy and operations, whereas in the past, companies may have chosen to keep quiet and remain objective on topics such as politics or sustainability.”
Finally, we asked Chitrakorn if especially in light of further regulations being introduced around influencer marketing, whether fashion brands are at this stage more likely to opt for organic or paid opportunities on Instagram?
“On social media I’m seeing a mix of paid reach and organic posts, although this may change. Earlier this year, Instagram experimented with hiding the number of likes on posts, with the intention of minimising the social pressures that come with social media. If this becomes a permanent feature, it could incentivise more brands to spend more on ads and less on posts that feature influencers.”