Why TikTok is a crucial tool for luxury brands

Brands are at saturation point but there is still time to snare a new generation on social media.

Chris Donnelly, foudner and CEO of Verb Brands.

So does Jimmy Choo need TikTok?

Yes indeed, says brand supremo Chris Donnelly, whose company Verb Brands works with the shoemaker whose products can set you back several thousand dollars.

A Jimmy Choo may be well out of the price range of your average teenage to 20-something follower on the social video network, but getting into the hearts of the next generation of shoppers is an essential element of marketing according to the London-based Donnelly.

The founder, owner and chief executive of the luxury digital media firm says TikTok, the fastest growing platform in the history of social media, increasingly is attracting a broader demographic of people up to age 30.

“In the past people would fall in love with Jimmy Choo or Prada or other brands through stores or movies or advertising, even if they could not afford to buy,” he says.

“Now it’s platforms like TikTok and Instagram that will make them customers of the future. Browsing habits have changed so much that you have to be on these platforms.”

Donnelly, 30, has built a globally recognised firm since he launched it just as he graduated with a degree in politics from the University of Warwick eight years ago. He was already well versed in selling and marketing online, having dabbled in businesses since the age of 14 or 15, his entrepreneurial streak not unusual in a family where his father and brothers run their own businesses.

“I was at university and I was going to be the one to buck the trend and be a political journalist,” says Donnelly. But he’d moved from setting up websites as a hobby for friends to earning up to £15,000 a month from his side hustles, which included a mini import-export business run from his dormitory room. Setting up a luxury branding operation online came naturally.

“Luxury at the time was so poorly represented digitally,” he says. “It has been incredibly slow to turn to online compared with sports brands and mass-market brands. From a young age I believed the internet would revolutionise every part of business, no matter the product.

“I thought it was an open playing field that most people were not surveying. I had a bit of experience in premium brands and had consulted for some celebrities from my dorm. Within a couple of years we had 35 people working for us.”

Verb Brands now has 80 permanent staff and offices in London, Manchester, New York and Shanghai, with hopes of opening one in Australia.

The agency focuses on luxury and premium brands in fashion, hospitality and lifestyle and, along with Jimmy Choo, names Bugatti, Net-a-Porter and Claridge’s among its high-profile clients.

Donnelly says China is top of the agenda for all his clients now because of the continuous surge in demand for luxury goods. His firm also works with newer British and American brands breaking into China and represents Chinese brands looking for markets in the West.

“China touches every client,” he says. And while bricks-and-mortar luxury retail rebounded strongly in China after Covid, it’s still the case that Chinese consumers increasingly buy from the country’s incredibly sophisticated online sales platforms.

On the other hand, Chinese brands trying to break into Britain, he says, have to be counselled that they cannot sell as hard as they want to: “The customer will just ignore you.”

Indeed any new brand building is challenging. Donnelly says: “We get approached by start-ups launching new retail brands but the requirement to get cut-through for a brand now, I have never seen anything like it.” In other words, the market is saturated and the sophisticated digital presence of the big brands is extremely hard to match.

The challenge for brands is coming from the “slight rebellion” among Generation Z consumers who are dismissive of big luxury companies and for whom the power of the brands is waning.

Says Donnelly: “Luxury brands have to go through a period of introspection so that they remain relevant (and appeal to a younger generation).

“The reality is that some people will always want products from great luxury brands because the products are so great and the marketing is so great: it’s very hard to build a Bugatti and very hard to be Bugatti, and people will always want them.”

But many big brands need help in handling “culturally sensitive moments”. Says Donnelly: “A lot of brands don’t know how to deal with a Black Lives Matter event or a Pride Month or various topics, so many of them do something token and then they get called out for it.” Relevancy also means embracing new platforms, and Donnelly gives a shout out to Gucci, a brand that transitioned seamlessly to digital: “A lot of brands say TikTok is not for us, but if it’s right for Gucci …”

The pandemic has shown retailers cannot survive without an online operation. “It’s an unequivocal shift that Covid has accelerated,” Donnelly says.

“Even if someone does go into a store, that touch point has been influenced so heavily by online that it’s nearly a digital sale anyway. I hope the world remains physical but no brand cannot make digital customer acquisition a priority.”

There is no going back and luxury brands are getting the message about how much the world has changed. Says Donnelly: “The CEO used to come from a financial and sales background, but now you are seeing them coming from marketing backgrounds.”