Overview
Client: Vintage luxury fashion reseller
Business structure: Small business
Lifecycle stage: Growth
Budget: $3000
Planning Duration: 1 week
This case study discusses the process of preparing a marketing plan for a vintage luxury fashion reseller that operates entirely online and is wanting to make more use of gen AI, AI automation and predictive analytics, as well as social selling, in order to overcome business challenges and achieve growth. Even though the business website and ecommerce store is well-designed and high-performing, and despite a moderate social media presence, the brand struggles with low email subscriber engagement, limited digital visibility, and under-utilised marketing strategies.
Analysis
Companies that excel at personalisation increase revenues by 40% vs those that don’t
Source: McKinsey & Company, 2021a, cited in McKinsey & Company, 2023.
Market
“Some industry observers predict that, in the next ten years, fashion resale will become bigger than fashion retail.” - McKinsey & Co., 2020.
According to the ThredUp Resale Report (ThredUp, 2024), the global secondhand apparel market is expected to grow three times faster than the overall global apparel market between 2023 and 2028 to reach $350 billion at a CAGR of 12%. The online fashion resale/repair/rental market is comprised of social media sales (23%), direct-from-brand resales (20%) - with growing consumer preference for this method, managed marketplaces (20%), and peer-to-peer marketplaces (13%), and is forecast to make up over half of all secondhand spending by 2025 (ThredUp, 2024).
As part of its series examining economic and consumer changes accelerated by the pandemic, McKinsey (2020) discuss the sustainable fashion movement and its circular business model, and its uptake particularly among Generation Z and Millennials. The report highlights the interconnectedness between circularity and digitalisation in fashion retail or resale success, with both contributing to building positive customer relationships and brand loyalty, and insightful application of emerging technologies facilitating improvements in the “circular consumer experience” (McKinsey, 2020, p.2) to streamline the resale/repair/rental process.
To counter the moves of larger players to take more of the global market with acquisition strategies (see Business Wire, 2024, and Danziger, 2024), smaller, niche resellers in the luxury genre can differentiate their products and services
through implementing the advice of McKinsey (2020) above, as well as McKinsey (2021a, 2021b, and 2023), and McKinsey and The Business of Fashion (BOF) (2024), and by adopting marketing principles applied by international luxury brands which have been refined over centuries.
McKinsey (2021a) suggests leaders in personalisation exceed the outcomes of peers by “tailoring offerings and outreach to the right individual at the right moment with the right experiences” (p.2), and this can be achieved through steps such as using data analytics to identify opportunities to bring value to an interaction, developing AI-driven capabilities to respond to customer signals in real-time, and leveraging predictive analytics to select which messages or content to serve customers.
McKinsey (2021b) expands on the benefits of a data culture and infrastructure in fashion and luxury, describing how significant results have been achieved by companies that integrate data into their core processes, including 30-50% digital sales growth achieved in ecommerce and personalisation by measures like customer care optimisation and personalisation of ecommerce journeys to maximise customer lifetime value, and data-driven and AR-enabled fit prediction to reduce returns.
McKinsey (2023) and BOF and McKinsey (2024) consider how generative AI can be applied to most effect in fashion and luxury, with the former observing that the most emphatic use cases lie in innovation, marketing, and sales and customer experience, and both providing a guide or Executive Playbook to putting use cases in place and achieving growth. BOF and McKinsey (2024) further note that the majority of the fashion and luxury industry is still in the experimentation and piloting stage, and encourage businesses to move beyond these projects into deep transformation.
Finally, at 180 years old in 2024, Sotheby’s has established a reputation for being the world’s premier destination for art and luxury, promoting ownership and access to art and luxury objects through private sales, auctions, and ecommerce. Sotheby’s (2024) speaks with authority when it prescribes the four E’s of luxury marketing: emotion, experience, exclusivity, and extension. Essentially encapsulated - creating desire and aspiration in the customer, and offering value beyond the product or service to make the customer feel important and unique, to know they are not just making a purchase, they are choosing a lifestyle that values craftsmanship, quality, and sustainability.
Target Audience
An instructive source of insight into the target audience or typical customer of online vintage luxury resale is offered by ThredUp in its Resale Report (ThredUp, 2024). ThredUp categorises market segments by generation, stating that 51% of Generation Z and 55% of Millennials preferring to shop secondhand online than in-store, compared to 31% of Generation Xers and a mere 18% of Baby Boomers. This could present a market opportunity in more mature shoppers for small resellers such as the business in this scenario to investigate further and exploit using a channel shift campaign. In the interim, Generation Z prefers livestream shopping via social media, while Millennials can be found in a managed marketplace. Hence, the business could focus on capturing more of the Generation Z market through emphasising use of social media in marketing campaigns, and look at converting others in the future.
SWOT
Marketing Plan
Social Media Management
Three important ways this business can achieve its goals through social media are firstly, by using the visual storytelling capabilities of each platform to showcase products, their craftsmanship, and history; secondly, building a community through regularly creating interactive content such as polls, quizzes, and tutorials, encouraging user-generated content about the store’s products, and making sure to respond promptly to feedback and messages; and thirdly, partnering with influencers and fashion bloggers whose values and beliefs are aligned with those the store wants to uphold. Five practical steps that can be taken to put this into practice include:
Use AI tools to analyse influencer metrics to choose the most effective partnerships.
Host workshops on upcycling and sustainable fashion on YouTube and post to Instagram and Facebook, with a preview on TikTok.
Host regular contests encouraging users to share their upcycled outfits or favorite vintage finds, incentivising participation with prizes.
Foster a sense of community by engaging with followers’ content and sharing their posts on the business profile.
Create a posting schedule tailored to the capabilities of each platform and stick to it, using generative AI for drafting and analytics.
Search Engine Optimisation
An effective SEO marketing strategy for this business combines effective keyword research, on-page and off-page optimisation techniques, and local SEO tactics to enhance visibility and drive organic traffic. By incorporating genAI and AI capabilities, the brand can stay ahead of trends and continuously optimise its online presence:
Identify core keywords by using tools like Google Keyword Planner, SEMrush, or Ahrefs to identify relevant keywords related to vintage luxury fashion.
Analyse competitor websites to discover which keywords they rank for, then identify gaps and opportunities where the brand can compete.
Leverage genAI tools to generate keyword ideas and assess search intent, helping to refine your keyword list based on current consumer trends.
Create compelling title tags and meta descriptions using targeted keywords, ensuring they accurately reflect page content to improve click-through rates.
Develop high-quality, informative content that addresses customer needs and incorporates targeted keywords.
Search Engine Marketing
In regards to a search marketing/PPC strategy, the brand can leverage paid advertising , optimising ad copy and landing pages, and implementing a robust bidding strategy to reach its target audience while harnessing the capabilities of gen AI and AI to enhance performance and drive conversions.
Google Ads is the primary platform for search advertising, and Bing Ads is complementary to Google Ads, often with lower competition and cost-per-click (CPC), reaching a different audience.
Instagram and Facebook Ads can be used for retargeting ads to users who have previously visited the website or engaged with content.
Different types of suitable campaigns include brand campaigns focused on branded keywords to capture existing interest, product campaigns targeting specific product categories, location-based campaigns targeting users in specific cities, and display campaigns with Google Display Network to retarget visitors who didn’t convert.
Automated bidding using Google’s automated bidding strategies (e.g., Target CPA or Target ROAS) based on conversion goals and manual bidding for certain high-value keywords to maintain control over budget allocation and adjust based on performance metrics.
Employing AI analytics tools to monitor campaign performance continuously, providing insights into which ads are performing best and which keywords are generating the most conversions.
Email Marketing
Email marketing can be used in the marketing campaign by developing personalised email campaigns using AI to segment audiences based on behavior and preferences. This can help to build a subscriber list, leveraging automation, segmentation, and personalisation to enhance engagement and drive conversions. By integrating gen AI and AI capabilities, the brand can also optimise email performance and create meaningful connections with the target audience.
Use AI-drafted content for tailored recommendations and storytelling in newsletters.
Personalising the campaign by using the subscriber's name in subject lines and email greetings
Tailoring product recommendations based on past purchases and browsing behaviour.
Using forms on the website to encourage visitors to subscribe
Promoting an email newsletter on social media platforms, encouraging followers to subscribe for exclusive updates and offers.
Content Marketing
Vintage luxury fashion is very well-suited to storytelling, graphics, and videos, following the four E’s espoused by Sotheby’s on luxury marketing, and there would seem an abundance of ways that engaging content could be created around the store, its mission, and what it does. AI tools could be leveraged to brainstorm, draft content, and to explore and develop ideas, making sure to check any facts it might provide. Five practical steps that can help to start generating captivating content include:
Create a blog focusing on sustainable fashion, upcycling tips, and brand stories.
Use gen AI tools to generate engaging captions, hashtags, and content ideas tailored to current trends.
Utilise AI to analyse engagement metrics, helping refine content types and posting strategies.
Showcase products with high-quality images and videos of upcycled pieces
Create behind-the-scenes content showing the upcycling process, sourcing materials, and the brand story.
Customer Experience
This final section is most relevant to applying the four E’s of luxury marketing:
Ensure the website is mobile-friendly and intuitive to find product information, with a simple and speedy checkout process.
Implement AI chatbots for customer support, helping with inquiries and guiding users through the purchasing process.
Use AI tools available in the ecommerce platform of choice to recommend products based on user behaviour and preferences.
Create a loyalty program that rewards customers for sustainable choices and repeat purchases.
Continuously monitor and analyse relevant user data to identify new ways to delight and improve the customer experience for the target market
Performance Reporting
Tools
Google Analytics for for tracking website traffic, user behavior, and conversion rates.
Google Data Studio for for the creation of interactive reports and dashboards, integrating data from various sources.
Email marketing platforms have built-in analytics for tracking email campaign performance, subscriber engagement, and segmentation effectiveness.
Social media analytics tools to monitor social media engagement, reach, and audience growth across platforms.
AI tools for predictive analytics, customer segmentation, and trend analysis
Reporting
Comprehensive monthly reports covering all key metrics across website, email, and social media performance.
Real-time weekly dashboards to monitor critical metrics, allowing for quick adjustments to marketing strategies.
Quarterly in-depth analyses focusing on trends, customer behavior insights, and campaign effectiveness.
Dashboard Design
Summary & References
In this case study a marketing plan was prepared for a small vintage luxury fashion reseller looking to establish a niche position in what is a rapidly growing and extremely competitive global market where larger players are fast strategically acquiring smaller companies to establish a commanding position. With a wide range of sales channels available to consumers, trust is leading some to buy secondhand direct from the brand, perhaps a sense of discernment and high quality standards taking older shoppers to bricks-and-mortar, while Millennials find convenience in managed marketplaces, and Generation Z using the medium they’re most familiar with to seek value. Hence there would seem to be ample space in which to carve a uniquely differentiated position to serve the needs of an identified segment, and the most recent published management research demonstrates that this can be achieved through use of today’s data, advanced analytics, and generative AI technologies towards implementing established luxury marketing principles in inventive and exciting new ways.
REFERENCES
Business Wire (2024). Trove Acquires Recurate, Expanding Industry-Leading Resale Technology. Business Wire, a Berkshire Hathaway Company, 13 August 2024.
Danziger, P.N. (2024). Trove Makes Major Moves To Help Fashion Brands Grow Through Resale. Forbes, 19 September 2024.
McKinsey & Company (2023). Generative AI: Unlocking the future of fashion.
McKinsey & Company (2021a). The value of getting personalisation right - or wrong - is multiplying.
McKinsey & Company (2021b). Jumpstarting value creation with data and analytics in fashion and luxury.
McKinsey & Company (2020). The future of fashion: Sustainable brands and ‘circular’ business models. A report in The Next Normal series.
Sotheby’s Institute of Art (2024). Luxury marketing: A deep dive into high-end branding.
The Business of Fashion and McKinsey & Company (2024). The state of fashion 2024.
ThredUp (2024). Resale market and consumer trend report.
