Case Study: How Luxury Brands Succeed in Affiliate Marketing

Luxury Brands have a lot of strength and opportunity in affiliate marketing, but many brands don’t realize their full potential for success. In this case study, the Rakuten Affiliate Network took an in-depth look at Luxury Brands in the affiliate space to identify how advertisers in this vertical can make the most of their affiliate strategy, and outperform their competitors in ways they may not have realized were possible.

Online commerce has put purchasing power in the hands of the consumer in ways that hadn’t existed only a few short decades ago. With the power of social media, content publishers, and a plethora of digital media readily available at their fingertips, today’s consumer are more educated and shopper-savvy than ever before. This isn’t just limited to the product categories a customer is familiar with either. If a customer wants to find a car but doesn’t know the first thing about buying an automobile, there are more than enough websites ready to explain different buying options, how to identify a car, what to look for in a used vehicle, and more. And some of the biggest beneficiaries of this are luxury brand advertisers.

Luxury brand advertisers have been empowered through affiliate marketing. Partnering with publishers that promote their products to very specific types of consumers, highlighting not just the features of the product but why those features are right for those shoppers, is a reach that wasn’t nearly as available years ago. This model of advertising achieves two goals simultaneously: shows shoppers why that particular luxury brand is right for them, and maintains that brand’s prestigiousness. However, there’s a challenge that many luxury brand advertisers face: how do they maintain prestige while simultaneously capturing new customers?

The answer has assumed to be exclusivity: partner with a few publishers that reflect the high value that a luxury brand advertiser brings in their products, and capture that market that values exclusivity and high quality. However, there are publishing partnership opportunities in affiliate marketing that maintain that exclusivity and value while capturing new customers and extending the brand’s reach. In this case study, we take a close look at how luxury brands can yield high amounts of success in affiliate marketing by partnering with Coupon and Loyalty/Reward sites without compromising the brand’s high value.

Luxury Brands and Content Creators: Challenges Beneath a Gorgeous Exterior

Luxury Brand advertisers that are new to the affiliate channel often seek publishers they believe will accurately represent their brand’s prestige and status. The goal is two-fold: identify publishers that reach brand-consuming customers, and cultivate or reaffirm a very distinct brand identity through the publisher. Content creators, specifically high-end fashion bloggers, would seem to meet these stipulations in the eyes of Luxury Brand advertisers. With a range of content publishers in the Rakuten Affiliate Network, Luxury Brands are able to be selective enough to find the aesthetics, content tone, and reach specific audiences that would make for a home run partnership.

However, under the high potential of having a partnership with a Luxury Brand content creator, there are several challenges that Luxury Brand advertisers need to be aware of. Specifically:

1. Content Creators Are Not High Converting: Luxury brands looking to get exposure and increase prestige may earn that by partnering with content-driven publishers, but does this convert into sales? Rakuten Affiliate Network experts that work on Luxury Brands say that the additional reach for brands is beneficial, but comes at a cost of low conversion rates for sales.
2. Selectiveness Can Make for Few Options: Luxury Brands that are trying to find content publishing partners may run into the issue that, by the time they narrow down their selection, there are only a select few options available for them to work with. This creates a challenge for Luxury Brands who are looking to develop a successful affiliate model: fewer publishers mean fewer opportunities, and fewer opportunities will result in an uphill battle.
3. Extra Legwork: The opportunity to work with content publishers is enticing to Luxury Brands, and with good reason – content offers a perspective and level of exposure that sells the brand’s message and caters to what’s important to customers. This is a huge benefit, but comes at a price – Luxury Brand advertisers have to manage a lot of what makes this content so dynamic. This “managing” includes providing free products to their publishers, ensuring that photo shoots properly represent the product, and that content is produced in a way that reflects the brand’s goals.

These challenges shouldn’t negate Luxury Brands from working with content publishers – just the opposite in fact. Luxury Brands should continue to work with content publishers. Content publishers help luxury brands increase brand reach and awareness, as well as foster the “high-end reputation” that Luxury Brand advertisers seek after. A recent eMarketer study shows exemplifies just how valuable fashion publishers can be for raising awareness during back-to-school shopping, pointing out that most students learn about good fashion from blogs and content publishers (illustrated via the graph on the right). But if the awareness is there and the conversions aren’t, what should be done?

The best solution is for Luxury Brands to expand their focus on different types of publishers, rather than relying solely on content publishers.

Where the Customers Are: Myths and Facts Behind Coupon/Loyalty Sites and Luxury Brand Partnerships

The inherent challenge that many advertisers have is identifying their customer’s buying habits. This disconnect comes from where advertisers believe their customers are going for their shopping versus where customers are actually buying from these advertisers. This misunderstanding on where consumers are coming from is not uncommon, but it does hinder an advertiser’s ability to be successful in affiliate marketing if they try to dictate where their customers should be looking, rather than focusing on where their customers already are.

In the case of Luxury Brand advertisers, it’s not hard to see why many advertisers would assume their customers would be turning towards content sites over other publisher models. Not only do content publishers have a controlled, targeted message, they also have the presentation and “culture” that advertisers in Luxury Brands strive to capture. Meanwhile, other publishing models such as loyalty and reward sites might be less desirable due to a lack of creative control both on presentation and content, as well as their expansive product offerings.

But for Luxury Brands, assuming their customers aren’t shopping on loyalty and coupon sites is a symptom of a larger issue – a misunderstanding of what their customers value, and where they’re able to find said value. The table below evaluates some of the myths that Luxury Brand advertisers commonly face, along with some of the facts as evaluated by Rakuten Affiliate Network experts:

These misunderstandings about customers and the sites they shop on can hold back an advertiser’s Luxury Brand efforts from truly taking off. However, recognizing this issue is as easy as reading the information in this blog post, then gaining a better understanding of your specific customers and figuring out how to optimize your affiliate efforts.

Ahead of the Curve: Gaining the Competitive Advantage in the Luxury Brands Affiliate Space

Luxury Brand advertisers looking to break into affiliate marketing may have several notions about what works and what won’t in mind, but as stressed above these notions may be incorrect. In this section, advertisers looking to start or optimize their Luxury Brand affiliate strategy will learn everything they need to know to be successful, with information and tips from some of Rakuten Affiliate Network’s top Luxury Brand account managers.

The first tip is to not come into affiliate marketing with broad opinions of what won’t work. Rakuten account managers stress that overarching statements such as “We refuse to work with a certain publisher or publishing model” can be detrimental to early success. Affiliate marketing affords a lot of opportunities and countless potential, and limiting yourself to these opportunities will prevent you from gaining a competitive advantage in the affiliate space.

Next, it’s completely normal to have reservations about publishers that are in coupon/loyalty based programs, but just because they’re more widespread across their advertiser offerings doesn’t mean they won’t give special treatment to Luxury Brand advertisers. Rakuten affiliate experts noted that many publishers in these models recognize the importance of presentation and aesthetics for Luxury Brands and are more than happy to provide customized brand pages for their luxury partners. The best way to find out how to accomplish this is to work with your Rakuten account representative.

Rakuten experts also noted that many Luxury Brands will rightfully want to know which of their competitors are on these coupon/loyalty publishers. No brand wants to be missing out on potential customers while their competitors are reaping the benefits of being there, but at the same time, no Luxury Brand advertiser wants to be the “first” on a publisher site with a coupon or loyalty model. It creates an interesting position where every advertiser wants to be where other advertisers already are, but nobody wants to be the first on a publisher’s site. This also creates an opportunity because if your target audience is on a new site that every other brand is interested in but not willing to jump in yet, you could gain the competitive advantage by being on there before them.

And speaking of customers, one of the best ways your Luxury Brand can gain an advantage by simply thinking about who their customers are, not who they envision them to be. According to Rakuten affiliate experts, the challenge comes from Luxury Brand advertisers thinking that their customers prioritize the presentation and exclusivity of the brand, which is why they’d prefer to learn about products from places like content sites versus coupon/loyalty programs. While it’s true that customers do appreciate the value and presentation of the brand, they’re not on coupon sites or loyalty sites for a discount or because they can’t afford the brand otherwise – just the opposite in fact. Most affluent shoppers are looking to buy Luxury Brands through these sites because they’re looking to earn value in places other than savings. This could be because of a rewards-type structure on loyalty sites, or free shipping on a coupon site. Knowing your customers are key, knowing where they shop and why is even better. the graphic on the right illustrates the mindset of affluent consumers: they shop for the best deal the can, even if that deal means finding their savings somewhere other than the pricetag.

Conclusively, if you’re an advertiser in Luxury Brands looking to make it in affiliate marketing, there are plenty of keys to success that you may not have anticipated but will help you in your efforts. Keeping an open mind to publisher partnerships you may not have considered and recognizing where your customers find value. When in doubt, contact your Rakuten Affiliate Network account manager with questions or concerns.