Why celebrities are a perfect match for the luxury market7 min read . Updated: 13 Aug 2017, 10:49 AM IST
Famous people drive instant attention but their fame is transient, which makes an association both successful and potentially risky for brands
International luxury brands have captured the fantasies of the Indian diaspora quite well. Flaunting Louis Vuitton or Longines is common in select well-travelled circles. Dining at restaurants helmed by international chefs is a trend.
But going beyond the limited audience and creating larger awareness is something luxury brands are still working on in India. Considering India’s population of more than 1.3 billion, that’s not an easy task. But that’s where big banner celebrity endorsers fit into the marketing strategy.
The effects of endorsing
From footballer David Beckham to actor Shah Rukh Khan, celebrity endorsers have raked in different kinds of reactions for multiple brands over the past years. The strategy continues to work with many luxury brands jumping onto the bandwagon by roping in Indian stars to entice consumers.
Professor Don E. Schultz of Northwestern University, also known as the father of integrated marketing communications, rates the importance of celebrity endorsement at roughly 7 or 8 on a scale of 10.
“Indian consumers are not yet ready for online purchasing, although it is clear they follow celebrities and fashions quite closely, particularly for luxury products," he says in an email interview. “Thus, celebrity endorsement must rely on experts in particular fields. If the celebrity is well-known, their endorsement can often be quite beneficial. You must remember, celebrities are ‘borrowed interest’, that is they are essentially supportive in terms of their value to the product or service. They do not replace quality, uniqueness and the like."
“But, there is also risk with a celebrity. If the celebrity’s fame fades or gets into some sort of trouble, it can and commonly will reflect on the brand being endorsed," he says.
In a paper titled “The Effectiveness of Celebrity Endorsements: A Meta-Analysis", published in January 2017 in the Journal of the Academy of Marketing Science, authors Johannes Knoll and Jörg Matthes say that cognitive effects of celebrity endorsement include awareness and knowledge about an endorsed object.
“Establishing awareness starts from creating attention and interest. Directing one’s attention involves controlled as well as automatic processes. Both processes can be influenced by celebrity endorsements... First, people who are interested in a particular celebrity are assumed to purposefully direct their attention to this celebrity’s ad. Second, people’s attention is automatically directed. Humans tend to give preferential treatment to stimuli that are related to their goals. In addition, celebrities are well-known, resulting in more accessible representations in memory. This should foster automatic attention too."
Professor Schultz agrees with the theory as he mentions that celebrity recommendations are essentially encouraging consumers to live vicariously through them. “There is a feeling that while I can’t be like the celebrity, I can at least use the brands they say they use," he explains.
What luxury demands
Luxury brands usually require unusual marketing strategies as compared to mass brands. Typical blueprints don’t work on them. But then, there is nothing higher than the power of celebrities in pushing any kind of brand into the consciousness of potential customers.
Neither is it a recent phenomenon. An early example of celebrity endorsement for luxury brands comes from the 19th century. Charles Worth, who invented haute couture, took help from a high society influencer Princess Von Metternich, wife of the then Austrian ambassador to France and close friend of Napoleon’s wife Empress Eugenie, to promote his fashion house La Maison Worth.
As a result, her patronage contributed immensely to the success of this couture house as the most influential in the world at its time.
In a white paper, luxury fashion consultant Uche Okonkwo gives five celebrity attributes to judge when selecting the perfect brand ambassador for luxury brands: credibility, global appeal, personality, uniform power (the celebrity must not overshadow the brand), and constancy (the celebrity must have lasting appeal).
“Shared values" is something many luxury brand managers cite as the most important criteria for selecting a celebrity as a brand ambassador. In India, film stars and cricket players enjoy an exalted status. Combining both spells a win-win situation for the luxury brand.
Most of the times, a star’s engagement as a brand ambassador is directly linked to his or her career. It was after Deepika Padukone’s step on the global stage, with the movie XXX: Return of Xander Cage, that L’Oreal announced her as their next ambassador.
Priyanka Chopra’s success with American TV series Quantico catalyzed her to become the ambassador of Indian jewellery brand Nirav Modi. The jewellery brand, with its stores in India, New York and Hong Kong, has much to benefit by appointing a globally well-known celebrity.
Swiss Promotion, a distribution company in India, has been representing watch brand Ulysse Nardin in the Subcontinent since 2002. They appointed Indian cricketer Yuvraj Singh as their brand ambassador after the 2012 World Cup.
CEO Nitin Chainani says, “Yuvraj is a fighter, a survivor and has innovated himself to make a comeback to play cricket. Other than that he has brought so much glory to India and the cricketing world."
Other watch brand ambassadors include Hrithik Roshan and Abhishek Bachchan, for Rado and Omega respectively.
A key factor, which luxury communication specialist Roasie Ahluwalia spelt out in the book The Luxury Market in India: Maharajas to Masses, is uniqueness. In India, a handful of top movie stars are relied upon by brands of all kinds to promote them.
A case in point is Aishwarya Rai Bachchan, who successfully endorses luxury brands such as Longines and De Beers, as well as mass brands including Lux and Lakme Cosmetics. Making a star relevant for the luxury brand is something brand managers have to work on at times.
Luc Rochereau, brand director, Middle East and India, for luxury watch brand IWC Schaffhausen, which appointed Indian actress Sonam Kapoor as their brand ambassador, concurs with the theory and says, "Our relationship with IWC brand ambassadors is based on a mutual friendship. It’s really a pure relationship, where if she (Sonam) likes IWC—which she does—she will genuinely speak about it and wear it."
Kapoor mentions that her grandfather and father wore IWC Schaffhausen, leading her to endorse the brand. Since the brand isn’t loud, she identifies with it. She defines her decision making process by saying, “It’s imperative that the brand philosophy matches your own. That’s when the brand ambassadorship seems authentic."
Kapoor is also the ambassador for L’Oreal in India apart from getting photographed in luxury brands such as Chopard, Elie Saab, Salvatore Ferragamo, Gucci and more.
Celebrities, with their large following on the streets and social media, are apt to pull in eyeballs. With their number of followers usually being in millions, luxury brands know they have much to gain by signing celebrities.
Rochereau says, “Sonam has definitely increased visibility to a new target audience, especially on our Instagram account @IWCwatches_India." But he does not give actual numbers.
Kapoor has 10.3 million followers on Instagram, while the IWC Schaffhausen India account has approximately 5,000 followers.
Chainani of Swiss Promotions acknowledges Yuvraj’s contribution to Ulysse Nardin: “Other than Ulysse Nardin’s niche market, Yuvraj Singh has his own following. The combination of the two celebrities (Ulysse Nardin & Yuvraj) adds value to both. Yuvraj has added a lot of first-time customers, perhaps people who have never looked at a mechanical timepiece before."
Increased visibility, a direct consequence of celebrity endorsement, is not the only benefit. As per a Marketwatch claim during Social Media Week 2016, celebrity endorsement can spell an increase in sales by 4%. While brands contacted for this story refused to give out any tangible numbers, all concur that celebrity endorsements have worked for them.
Chainani mentions, “We have had three limited editions dedicated to Yuvraj and his foundation YouWeCan and all three have been sold out."
Luxury brands use the power of Indian celebrities in multiple ways such as print advertising and awards night dressing. However, in an era where local, young social media users are rising as next generation influencers, does celebrity endorsement work as a marketing strategy in India?
Professor Schultz highlights the importance of both: “Celebrity recommendations are more important than ever as consumers shift to networks of friends and associates as arbiters for styles and fashions. Consumers have become much more reliant on word-of-mouth and crowds to determine what is ‘in’ and what is ‘out’. Celebrities play a big role in this."
Going beyond just a celebrity strategy is what Rochereau of IWC Schaffhausen advises: “Depending on the brand DNA, celebrity endorsement can be relevant, for IWC it is definitely part of our worldwide strategy and that is why we implemented it in India. However, this strategy wouldn’t make sense alone. Brands have to be creative in their marketing strategy and make sure everything ties up together on all levels and have a holistic approach."
In general, celebrity endorsements are certainly an effective way of marketing communication for luxury brands. Choosing the right celebrity, based on his or her attributes and its match with the brand, is even more imperative for luxury brands since they have to guard their reputation.
Not an easy task, yet an immensely profitable one.
Soumya Jain is the chief editor and CEO, LuxuryFacts.com, and co-editor of The Luxury Market in India: Maharajas to Masses.
Comments are welcome at firstname.lastname@example.org