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How and Why Luxury Brands Should Embrace TikTok Luxury brands can no longer ignore this burgeoning giant.

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TikTok has become an exception in the world of social media. The short video app features over 1 billion monthly active users and a presence in more than 150 countries.

Very few platforms have gained as much rapid popularity across the world as TikTok. The short-video sharing app's immense following among Gen Z makes it a critical part of any luxury brand's marketing strategy.

Here are some key strategies to interact with the younger generation.

TikTok in numbers

Unlike other social media platforms that took their time to grow, TikTok literally exploded at the global level after its international launch in 2017.

Here are some interesting facts about TikTok.

  • TikTok has more than 1 billion monthly active users.
  • TikTok has been downloaded over 2.6 billion times.
  • Generation Z makes about 60% of the TikTok user base.
  • TikTok has the highest engagement rate among social platforms, including Instagram and Twitter.

Related: TikTok vs. IG Reels: 3 Reasons Why Your Brand Must Leverage Both

Why luxury brands need to embrace TikTok

TikTok is notoriously famous among younger users, with nearly two-thirds of its users coming from Gen. Z. TikTok's affiliation with a younger audience makes it a potential sales channel for luxury brands across the world.

Generation Z will account for 20% of global luxury spending

A recent report finds that Gen. Z is set to become one of the primary spenders in the luxury industry by 2025, accounting for 20% of net luxury spending. When clubbed with the millennial cohort, these two generations will account for 180% growth in luxury markets between 2019 and 2025.

Another critical insight for luxury brands is that over 85% of luxury purchases in 2020 were influenced by digital content or marketing efforts. Luxury brands with a robust online presence can leverage their digital footprint to boost sales.

Younger users spend more time on TikTok

The luxury industry lags behind other sectors when it comes to riding new technological waves or trends. New brands or existing brands that embrace TikTok are likely to boost their customer interaction levels and conversion matrices.

How Burberry and Gucci reached millions on TikTok

Some luxury brands are already taking advantage of TikTok's massive user base, and Burberry is the perfect example.

Burberry ran #TBChallenge for the new Thomas Burberry Monogram Collection, challenging its audience to create the Thomas Burberry Monogram Motif design with their hands to unlock a new lens. The challenge resulted in over 57 million views and 30,000 videos generated for the brand.

The 'Gucci Model Challenge' was another example of an unparalleled organic reach of TikTok. Gucci generated over 12 million views through its organic campaign, challenging users to create videos with layered outfits. Similarly, Prada's creator partnership with an influencer resulted in over 36 million post views.

Related: Here's Why Not Being on TikTok Is a Huge Mistake

A practical strategy for luxury brands to ace TikTok

A growing number of luxury brands are already leveraging the power of TikTok's explosive influence and viral reach.

Here are some TikTok marketing strategies that brands can leverage for better digital outreach.

Influencer collaborations

TikTok influencers provide an established strategy for luxury brands to reach a broader audience base. Several brands are engaging with influencers to boost their organic reach.

  • Charli D'amelio and Prada: Prada is one of the first brands to work with influencers, including Charli D'amelio. The Italian luxury fashion house invited D'Amelio to Milan Fashion Week, where the influencer interacted with models, went backstage and created a live experience for her audience. Not only did Prada reach millions of viewers, but it also connected with a younger user base.

Influencer collaborations require three simple steps.

  • Finding the right influencers: The key is to work with influencers with the right user base for a brand. TikTok creator marketplace features all important matrices brands need to know before collaborating with an influencer.
  • Creating content that suits the influencer's followers and the brand. It can be through product unboxing or inviting the influencer to backstage experiences, photoshoots.
  • Engaging in cross-platform promotions. In addition to leveraging TikTok, brands should promote their content across all influencers' social profiles, boosting their reach on multiple platforms.

Paid campaigns on TikTok

Another strategy for luxury brands is to run paid campaigns on TikTok.

Branded augmented reality (AR) allows companies to create custom brand filters, lenses or even stickers for users. TikTok users can unlock these filters or lenses by creating a video with a hashtag or brand mention.

In addition to branded AR, luxury brands can organize paid hashtag challenges. The advertising brand can sponsor a hashtag, inspiring TikTok users to use it for content creation. Brands can offer promotional products or other prizes to the top content creators throughout the campaigns.

Apart from these strategies, TikTok provides different types of advertisements for brand promotions.

Direct content creation through brand accounts

Luxury brands can engage directly with their users through their own TikTok brand accounts. Some of the leading luxury brands to do so include Gucci, Louis Vuitton, Burberry and Alice + Olivia.

Brands can create content around:

  • Backstage videos generate a lot of curiosity among users because of their exclusive nature.
  • Live events prompt reactions from most brand followers. Prada already used this tactic with D'Amelio.
  • Styling tips for users are likely to resonate well with followers. It could be about easy styling tips with or without brand products. The idea is to boost engagement.
  • Dress-up challenges for followers are among the best types of content for mass user outreach.

As more brands embrace TikTok, the laggards are likely to pay the price for not capitalizing on this new avenue for promotion. While TikTok is facing stiff regulations across some regions, its presence in over 154 countries will continue offering broader audience reach to luxury brands.

Related: How to Use TikTok to Promote Your Business

Portia Antonia Alexis

Entrepreneur Leadership Network® Contributor

Consumer Analyst : Mckinsey & Company, Newton Investment Management

Portia Antonia Alexis is a London-based consumer-goods business analyst, neuroeconomist and mathematician. She analyzes solutions to economic, finance, entrepreneurial and business issues using neuroeconomic methods.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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