GAMIFICATION AS A DIGITAL MARKETING TOOL FOR LUXURY
Publication MARCH 2022 | FRI COMMUNICATION
written by Simone Guercini and Orazio Vella, University of Florence
GAMIFICATION REPRESENTS A MARKETING TOOL TO OFFER A DIGITAL LUXURY EXPERIENCE, OTHERWISE DEFINED AS THE ART AND SCIENCE OF TRANSFORMING CUSTOMERS’ EVERYDAY INTERACTIONS INTO GAMES FOR COMMERCIAL PURPOSES.
Most studies on gamification in marketing have focused on branding, demonstrating that the application of game dynamics allows for greater customer loyalty and increased sales. Furthermore, gamification can be used on e-commerce sites to create content and promote loyalty.
The topic was recently addressed in an article by Milanesi, Guercini, and Runfola published in the Electronic Commerce Research journal. The article presents the case of a luxury fashion distribution company based in Italy, whose name is kept confidential, which recently launched a gaming app for international customers.
Due to COVID-19, the luxury industry experienced a 23% decrease in revenue in 2020 compared to the previous year. However, online sales nearly doubled, accounting for 23% in 2020, up from 12% in 2019. It is predicted that online channels will become the leading purchasing channel for luxury goods by 2025, especially for the new generations, Millennials and Generation Z, who are particularly receptive to strategies that place digital at the center of a company’s business model. According to data published by Fashionnetwork, individuals aged 18 to 34 will represent 50% of the luxury market in 2025, compared to the current 32%.
In the aforementioned Electronic Commerce Research article, this application develops a gaming universe centered around luxury products closely connected to the company’s e-commerce site. Launched at the end of 2020, this game represents an entirely new element in fashion and luxury.
Through their avatars, app users challenge each other, collect items, socialize, and make purchases of their preferred products, creating virtual wardrobes made possible by the application. The intention was not solely to create fashion games for branding purposes, but to create a new channel for generating sales on the e-commerce site.
With the launch of this app, referred to as a fictional name in the cited article for confidentiality reasons, the company managed to create a community of players that reached 350,000 users by October 2021, 20% of whom were male. This demonstrates the significant interest in luxury and gaming within this target audience.
Confirming the expected penetration of digital-focused strategies among certain generations, the primary users of the app are 40% aged 18 to 24, 30% aged 25 to 34, 17% aged 35 to 44, 10% aged 45 to 54, and 3% over 55.
The company classifies these users into three prevalent segments: those who use the app as a source of fashion inspiration, those who use the app to become popular within the game, and those interested in both fashion and gaming, who subsequently make purchases through the application.
Two interesting observations can be made. First, the average time spent on the app by users is approximately 30 minutes per day, ten times longer than the time spent on the e-commerce site without gaming.
Second, customers who play the game tend to double their orders when they start using the app, resulting in additional sales from both new app users and upselling to existing customers. The app provides a close link to the e-commerce site in all game sections, allowing users to reach and purchase products simply by clicking on them during the game. The gaming experience, therefore, integrates with the shopping experience..
Exclusivity is a key factor in using the gaming app, as with similar apps in general.
In the analyzed case, exclusivity is achieved through the rarity of collectible items, a characteristic that allows the gaming approach to maintain the uniqueness typical of luxury brands within the mobile platform. Simultaneously, exclusivity fuels the competitiveness of players, who can use virtual currency to buy or sell items through a market-based mechanism.
The analyzed case allows for reflection on the relationship between gamification and the digital luxury experience, demonstrating three levels of player engagement consistent with the literature on gamification:
• – At the first level, players can create their virtual avatars to initiate their immersion in the game, envisioning new styles and virtual clothing. The digital luxury experience is thus linked to virtual interpretations of oneself and personal gratification.
• il secondo livello si riferisce alla possibilità di sfidare altri giocatori, livello che contribuisce al coinvolgimento dei giocatori attraverso la concorrenza; il meccanismo che guida il dibattito è la rarità degli oggetti da cui deriva l’esclusività, una caratteristica questa tipica del posizionamento di lusso, rappresentando un pilastro nella competizione tra giocatori;
• – At the third level, players can aspire to become virtual influencers and satisfy their ambition of leading a community of followers. The analyzed case showcases the four characteristics of gamification as a marketing tool for providing a digital luxury experience.
Furthermore, these individual and collective gaming experiences juxtapose exclusivity through rarity, the importance of social networks and influencer marketing, and the close relationship between gaming and e-commerce.
In conclusion, gamification can be an appropriate tool for digital marketing for companies seeking to engage their consumers and increase their level of engagement. After the pandemic crisis, companies face increasingly tough online competition in global markets, necessitating differentiation and value creation for their customers.
Milanesi, M., Guercini, S., & Runfola, A. (2022). Let’s play! Gamification as a marketing tool to deliver a digital luxury experience. Electronic Commerce