PMX Agency s Trend Report: Luxury Brands Online

PMX Agency s Trend Report: Luxury Brands Online 2017

Trend Report: Luxury Brands Online Luxury brands find themselves in a world evolving faster than ever. The traditional high-end luxury shopper endures, but the emergence of a new luxury consumer, the complexity of her shopping behaviors, and the range of channels by which brands communicate with her have created both new challenges and opportunities for the industry. Brands that have historically relied on the allure of heritage, exclusivity and premium craftsmanship are now navigating the waters of the new luxury driven by digital, experiential offerings, and a deeper, more personal relationship with customers. Personalization, omnichannel strategies and technological innovation require that luxury brands embark on a greater cultural evolution at an organizational level. As brands seek to engage the modern, sophisticated luxury consumer, the ability to pivot to this new reality will continue to widen the gap between top performing luxury brands and those that are slower to evolve. Per Bain & Company, the $289 billion in global sales of personal luxury goods reflects an uptick from the year prior, but the total projected growth of the market in 2017 has experienced a slowdown. This is driving brands to think and act differently. Across the industry, there has been notable consolidation, with Michael Kors acquiring Jimmy Choo and Coach acquiring Kate Spade. These brands will now have opportunities to engage larger audiences and integrate product offerings, while also streamlining distribution networks and innovating new marketing strategies. In 2017, we find that even the very definition of luxury is changing. What was once pegged the Millennial mindset is becoming the new normal across generations. As consumer attitudes shift, the expression of luxury fluctuates based on age, affluence, lifestyle and personal values. Luxury brands will be pressed to take on new meaning meaning that reflects both the new wave of consumer demands around authenticity, value for price, and cutting edge style and innovation, and the more traditional expectations of the bespoke and timeless experience. As luxury marketing looks to the future, what will remain constant is that the consumer is firmly in the driver s seat. Those that embrace this concept, while artfully designing captivating experiences across media and platforms, will be best positioned to remain relevant in the modern luxury consumer s life. 1 Methodology & Data Over 80 luxury apparel, leather goods and accessories brands (excluding jewelry) were selected to serve as a benchmark for the sector. A few well-known brands with insufficient data were omitted; luxury department stores have also been excluded. Some of the key data in this report has been sourced from Hitwise. For more information, please refer to About PMX Agency at the end of this report.

2017 Findings Web traffic to luxury brand sites is up in recent months, but total website visits over the last 12 months lagged compared to the prior year. The top luxury brands remain relatively consistent from previous years, with 10 accounting for over 80% of the total luxury market share. The leading brands are Ralph Lauren, Michael Kors, Coach, Louis Vuitton, Gucci, Chanel, Burberry, Hermès, Dior and Louboutin. Dior is new to the top 10, edging out Versace. Gucci saw the greatest increase in total website visits year-over-year. The addition of a new creative director and CEO in 2015 has reinvigorated the wellknown brand, helping it soar ahead both in site visits and overall sales. Nearly every female age segment from Millennials to Baby Boomers over-indexes for luxury brands. Males, on the other hand, are more concentrated by age with the largest share coming from those aged 35-44. Millennials and Gen X are becoming the dominant generations visiting luxury sites. Across both genders, the largest percentage of visitors come from younger members of Gen X (22.7%) and older Millennials (22.4%). Google on its own accounts for nearly 48% of all referrals to luxury brand sites. The search engine remains the single biggest source of traffic to the luxury category. At 7.4%, social media is the second largest source of website traffic for luxury brand sites. Facebook accounts for nearly half of all social traffic (3.5%), followed by YouTube which drives 2.1% of luxury brand visits. The number of luxury social media followers grew by over 27% in the past year, fueled primarily by growth in Instagram followers. Many luxury brands are seeing similar sized or larger followings on Instagram compared to Facebook. For the third year in a row, Chanel added the most Instagram followers YoY, gaining 9.5 million. Popular content promoted videos from fashion shows along with star-studded photos. Handbags and shoes continue to be the most popular product keywords bringing consumers to luxury brand sites. Gucci is the top brand for shoes, while Michael Kors, Coach and Louis Vuitton are the leaders for handbags. 2

Implications The Millennial Paradigm Research shows that Millennials and Generation Z will account for 45% of the global personal luxury goods market by 2025, which means that speaking the language of these increasingly affluent and influential shoppers will remain a primary focus for luxury brands. But personalization, technological innovation and immersive experiences are no longer just Millennial demands; rather they reflect a much broader change in the luxury consumer as a whole. Brands have pivoted even more to the direct to consumer model, focused on cultivating individualized relationships with their audiences that tap into their values, self-identity and desire to feel part of a larger community. Brands are still solving for the Millennial puzzle, but recognize that the shift is about more than just a single generation. From Exclusive to Inclusive In 2017, we saw the proliferation of Live luxury on platforms like Facebook, Instagram and Snapchat. To create more authentic connections, luxury fashion labels have opened their worlds up to social media followers through live runway experiences and behind the scenes action. Exclusivity took on new meaning, as brands looked to Instagram and Snapchat Stories to secretly launch collections to their followers, or give viewers access to the lives of top models and social influencers. With more having a virtual seat at the runway, luxury brands have been able to amplify their reach to more potential customers, while creating an enriching, highly sought after experience that consumers crave. Luxury brands must still walk a fine line, however, between the inclusivity of social media and the exclusivity vital to the overall luxury brand experience. On the Hunt Search (primarily Google) drives over half of all referred traffic to luxury brands, and luxury brand sites now pay for the majority of their search traffic as SEM cost pressures continue to increase. Many luxury consumers are highly loyal and seek out their preferred brands by name, whether hunting for the latest collections, hot new products or special offers. But competition remains fierce. In fact, 41% of luxury shoppers continue to shop at another luxury brand or department store after leaving a given luxury brand site, and 16% head back to a search engine. Top competition in paid search comes from luxury brands store partners, bringing price, shipping, and convenience into consideration. Luxury brands typically do not want to compete on price -- and many wish to reverse recent trends in that direction. As always, exclusive product and content are the key to capturing today s empowered consumers. Range of Influence Influencer programs played a larger role in the marketing strategy of luxury brands, particularly as more consumers flock to social media. From Michelle Obama, to Bella Hadid, to up and coming YouTube vloggers, brands are reaching their audience through a diverse range of voices. While many of the top fashion labels seem to have the most success when celebrities and other pop culture icons are the focal point, others are also engaging their community to tell an authentic brand story. And beyond the traditional influencer, campaigns that are fueled by user generated content have become a way to celebrate customers. 3

2017 The Mobile Experience In the past year, we saw a continued shift of the luxury sector to mobile commerce, as consumers demonstrated increased confidence in purchasing and engaging with luxury brands via mobile. But mobile devices are much more than just a convenient way to search and transact. Luxury brands are also making mobile a part of the omnichannel dialogue with customers. As an example, fashion startup Farfetch embarked on the beginning stages of its Store of the Future, leveraging its mobile app as the connecting platform between in-store experiences and online transactions. By the same token, luxury brands will continue to seek ways to harmonize mobile with instore by providing mobile-exclusive offers, access to product inventory, and AR and VR-powered experiences. Owning It Wholesale partners are a crucial part of the luxury business, and historically this has been evident in search marketing data. During the 2017 study period, department stores received 22% of all luxury brand shoe searches. But year-over-year, this share was flat to slightly down, while luxury brand sites themselves saw considerable growth in click share. Looking at another popular product, 54% of all branded handbag searches went to luxury brand sites, up dramatically from 31% last year. This increased desire to go first to an official brand site to look at product could be due in some small part to department stores well-documented woes. But more likely, this growth is a tribute to luxury s own brand building efforts across channels and platforms. And given the uncertain state of retail in all its various forms, luxury brands have been right to invest more aggressively in their higher margin direct-to-consumer businesses, supported by paid media efforts including search, display, mobile and social media. Table of Contents Findings & Implications 2 Luxury by The Numbers 5 Online Market Share 7 Demographics 9 Sources of Traffic 12 Search 16 Social Media 22 About PMX Agency 36 4

Luxury Facts & Figures A Look at Some of the Key Stats Driving the Current Luxury Market $289B Global Sales of personal luxury goods 2 % - 4 % Projected Growth in 2017 Gen X 37% Largest Market USA 33 % Share Largest Market for Personal Luxury Goods 6 % Airport Sales 8 % Online Sales 15% CAGR 11 % Off Price Stores Millennials 25% +2% Handbags +2% Shoes $3.5B Luxury Denim $2.3B Luxury Backpack $3.5B Luxury Sneakers 5 Data source: Bain & Company, Luxury Goods Worldwide Market Study 2016 and 2017 Spring Update

2017 Online Web traffic to luxury brand sites is up in recent months, but total website visits over the last 12 months lagged the prior year. TOTAL VISITS TO LUXURY BRAND SITES 25M 20M 161.4M Visits to luxury brand sites, last 12 months 15M 10M 5M 0 Jul-16 Aug-16 Sept-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Down - 13% YoY last 12 months as of June 2017 Peaks During Holiday like the broader Apparel and Accessories category DEVICE SHARE OF TOTAL VISITS Luxury Brands 38% 62% Online Population Luxury Visitors are More Likely to be on a Mobile Device compared to the average internet user 35% 65% Mobile Desktop Data source: Hitwise, a division of Connexity, based on total U.S. visits to 80+ luxury brand sites (Note that total visits reflects web traffic from all devices, including computers, phones and tablets, but does not factor in mobile apps.) 6

Online Marketshare by Brand 19.5% 17.2% 12.7% 10.7% 7.0% 4.6% 4.1% 2.4% 1.7% 1.7% 1.5% 1.5% 1.4% 1.3% 1.2% 1.1% 0.9% 0.8% 0.8% 7.9% Ralph Lauren Michael Kors Coach Louis Vuitton Gucci Chanel Burberry Hermès Dior Louboutin Versace Saint Laurent Paris Ferragamo Prada Tom Ford Armani Marc Jacobs Dolce & Gabbana Jimmy Choo Other luxury brands Ralph Lauren had top online market share among luxury brands, accounting for roughly 1 in 5 visits to the category. Michael Kors remains the second most popular luxury website; however, it is down from 2016 when its marketshare was 18.5%. As in past years, a surge in Holiday traffic made Michael Kors the most-visited luxury brand during that season. The top 8 brands account for 78% of traffic to the luxury category and are the same as reported in 2016. New to the top 10 is Dior. Mobile Device Share Mobile Desktop Coach, Hogan and Michael Kors have the highest mobile shares. Coach 49% Hogan 46% Michael Kors 46% Manolo Blahnik 44% Versace 43% Giuseppe Zanotti 43% Bally 43% Hermés 42% Nanette Lepore 42% Shanghai Tang 41% Coach was the leader in mobile traffic during the study period. Along with Michael Kors, both brands target the middle market of the luxury sector, but have designs on building broader, multi-label luxury groups. Both have made notable acquisitions recently, with Coach acquiring Kate Spade and Michael Kors acquiring Jimmy Choo. Coach promotes free shipping and returns in search ad copy and on the site. Hogan has the second highest mobile share of traffic. Part of Tod s Group, the brand specializes in leather accessories and high-end fashion sneakers. 7 Data source: Hitwise, a division of Connexity, 12 months ending June 2017

Online Marketshare - Total Visits YoY Variance Site June 2016 June 2017 YoY Variance 2017 Gucci 9,905,571 10,821,120 915,549 Chloé 335,677 541,155 205,478 Saint Laurent Paris 2,070,475 2,243,766 173,291 Thomas Pink 404,284 533,856 129,572 Fendi 994,104 1,113,436 119,332 Canali 121,375 178,246 56,871 Loewe 88,265 143,312 55,047 Furla 391,992 440,464 48,472 Loro Piana 131,482 176,433 44,951 Turnbull and Asser 89,193 124,007 34,814 Kering s Gucci got the greatest number of additional visits year-over-year. In 2015, Alessandro Michele took over as creative director and the brand has seen positive results since. Record growth was reported in early 2017, and the brand surpassed sibling Saint Laurent Paris for the first time. Online Marketshare - Total Visits YOY Growth Site June 2016 June 2017 YoY % Growth Marchesa 42,836 73,783 72% Loewe 88,265 143,312 62% Chloé 335,677 541,155 61% Trussardi 27,352 41,057 50% Canali 121,375 178,246 47% Marni 81,785 116,092 42% Turnbull and Asser 89,193 124,007 39% Loro Piana 131,482 176,433 34% Shanghai Tang 84,190 111,633 33% Thomas Pink 404,284 533,856 32% Founded in 2004, relative newcomer Marchesa has seen impressive growth in visits as well as additional product lines after most recently adding shoe and jewelry collections. Marchesa.com does not sell directly to consumers, instead linking to Farfetch.com. Data source: Hitwise, a division of Connexity, 12 months ending June 2017 8

Online Demographics Women make up the majority of online visitors to luxury brands. Millennials and Gen X are two key generations visiting luxury sites. Across both genders, the largest percentage of visitors come from Gen X (35-44). 9

2017 Gender Female Luxury Brands Visits Share Representation 61.3% 114 Male 38.7% 81 Age 18-24 Luxury Brands Female Visits Share Representation 6.7% 105 Luxury Brands Male Visits Share Representation 6.1% 68 25-34 13.7% 131 8.7% 106 35-44 12.8% 137 9.9% 113 45-54 9.4% 95 6.4% 82 55-64 13.2% 126 4.5% 68 65+ 5.8% 78 3.4% 59 Education Less Than High School High School Graduate College Graduate Luxury Brands Visits Share Representation 3.8% 54 14.3% 63 25.5% 120 Gender differences in visitors to luxury brand sites are apparent when looking at age breakouts. Nearly every female age segment over-indexes, while males are concentrated in the younger 25-44 age range. Grad College or More 52.5% 130 Female Baby Boomers (aged 55-64) over-index to luxury sites but male Baby Boomers underindex significantly. Household Income Visits Share Luxury Brands Representation The majority of luxury brand visitors have a college degree+. Visitors to luxury brand sites predictably skew towards higher-income households. The $250,000+ income range indexes highest, followed by $150,000-$249,999. < $25,000 $25,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $149,999 $150,000 - $249,999 > $250,000 9.0% 14.5% 15.5% 14.1% 21.0% 17.6% 8.3% 79 80 84 99 114 130 139 Data source: Hitwise AudienceView, a division of Connexity 10

Clickstream Traffic Sources & Exits

Search Engines 5 Search engines account for half of all referred visits to luxury brand sites. Google drives the lion s share 95% of search traffic. Luxury brand sites now pay for the majority of their search traffic a reversal of one year ago, when natural search accounted for the majority of clicks. This reflects a trend seen more broadly for online fashion retail, and isn t limited to just the luxury vertical. Paid 60% Organic 40% Shopping Sites 22.4 % Social Sites 7.4% Social is luxury s second largest source YouTube referrals were up 0.6 percentage points. It remains second to Facebook, the top driver of social traffic to luxury websites. Social Sites Facebook YouTube Reddit Pinterest Instagram Twitter Linkedin The Purse Forum Tumblr 7.4% 3.5% 2.1% Luxury Brands 6.3% Department Stores 4.5% Other 10.9% More than a fifth of luxury brand web traffic comes from some type of shopping site. Marketers range from large retailers and department stores to other luxury brands and deal sites, revealing the wide variety of factors that consumers consider along their journey. Luxury Brands Louis Vuitton Prada Hermès Burberry Gucci Dolce & Gabbana Michael Kors Chanel Coach Saint Laurent Paris 6.3% 2.1% 0.6% 0.4% Sources of Traffic to Luxury Brands Louis Vuitton remains one of the top sites for referring traffic to other luxury sites. Shopping Sites Amazon ebay Macy s Nordstrom Deal Moon Saks Fifth Avenue Brad s Deals Ebates Neiman Marcus Bloomingdale s 22.4% 1.1% 0.9% 0.9% 0.5% 0.4% Email Services Primarily Gmail 2.9% Email is a key source for timely seasonal offers. Gmail and other email sites also offer wide distribution for targeted display ads. 13 Data source: Hitwise, a division of Connexity, June 2017

Shopping Sites 41.0% Department Stores 9.5% Pre-Owned/ Consignment 1.1% 2017 Other Luxury Brands 13.0% 2/5 of exiting luxury brand visitors continue shopping. Sites visited after leaving a luxury brand include another luxury brand, department store and online consignment. Department Stores Macy s Nordstrom Saks Fifth Avenue Neiman Marcus Bloomingdale s Barneys Dillard s Belk 9.5% 2.0% 1.1% 0.6% 0.6% 0.4% Online Stores 6.05% Off-Price/ Private Sale 0.9% Social Sites 8.1% Luxury brand sites also drive visitors to their social properties. Facebook and YouTube are the most popular social destinations. Instagram lags but is growing. Social Sites Facebook YouTube Instagram 8.1% 2.9% 2.5% 0.5% Online Stores Amazon ebay farfetch Ssense Mr Porter Zappos Net-a-Porter Pre-Owned/ Consignment Tradesy The Real Real Poshmark Fashionphile 6.05% 2.1% 1.8% 1.1% Exiting Traffic from Luxury Brands Off-Price/Private Sale Nordstrom Rack Zulily DSW Gilt Saks Off 5th 0.9% Search Engines 15.9% A good deal of luxury site visitors go back to a search engine. Some visitors exiting a luxury brand site will return to search engines to continue researching alternate products, or to seek out better pricing or shipping options. Data source: Hitwise, a division of Connexity, June 2017 14

Search Keywords, Click Share & Traffic Trends

Top Keywords & Products Handbags and shoes continue to be the most popular product keywords bringing consumers to luxury brand sites, followed by smaller accessories and apparel. Handbags Footwear Keywords Search Clicks % Paid Keywords Search Clicks % Paid bag bags handbags purse purses backpack crossbody tote handbag satchel shoulder mini clutch neverfull messenger wristlet pouch hobo luggage briefcase 2.8% 2.2% 1.5% 0.9% 0.8% 0.7% 0.6% 0.6% 56% 67% 64% 59% 70% 56% 61% 57% 58% 59% 63% 53% 49% 54% 59% 54% 52% 63% 44% 62% shoes sneakers sandals slides flip flops loafers boots heels shoe sandal flats sneaker espadrilles pumps slippers heel loafer mules wedge oxford 2.5% 0.6% 0.4% 0.4% 0.4% 66% 67% 70% 65% 73% 72% 58% 61% 35% 72% 71% 57% 66% 61% 69% 53% 54% 76% 75% 34% 17 Data source: Hitwise, a division of Connexity, 12 weeks ending 7/1/2017

2017 Keywords wallet sunglasses belt wallets glasses scarf hat belts tie card holder key ties keychain smartwatch eyeglasses frames pochette money passport phone/iphone Accessories Search Clicks 1.9% 1.3% 1.2% 0.4% Apparel % Paid Keywords Search Clicks % Paid 62% 61% 59% 73% 60% 59% 60% 56% 42% 69% 51% 71% 52% 57% 57% 56% 22% 66% 50% 49% shirt shirts dress jacket dresses jeans clothing suits coat suit pants shorts clothes fashion sweater jackets trench tall blazer Hoodie 0.9% 0.9% 0.7% 0.5% 0.4% 49% 64% 57% 57% 75% 59% 62% 66% 58% 52% 53% 62% 63% 52% 48% 75% 48% 60% 61% 47% Other Relevant Keywords Trademarked brand names and product keywords are the top keywords driving traffic to luxury brand sites. Next in line are shopping-destination-related terms such as outlet, store and online. Keywords outlet sale 2017 Search Clicks 2.1% 1.2% 0.6% % Paid 61% 65% 51% Searchers sometimes include the current year in their queries, especially when they re seeking the latest season as opposed to vintage or pre-owned luxury. store online 0.6% 0.5% 48% 61% Data source: Hitwise, a division of Connexity, 12 weeks ending 7/1/2017 18

Brand Name Click Share Luxury Brand Name Terms When consumers search for a luxury brand by name without including additional modifying keywords (e.g. dior ), they overwhelmingly (72.1%) want to visit that brand s site. That s less often true when product words are included along with the brand name consumers are more likely to visit other destinations such as department stores, online shops and affiliate shopping portals. 72.1% 5.1% 2.8% 0.8% 0.6% 0.6% 2.6% 15.4% Luxury Brands Department Stores Online Stores Pre-Owned Affiliate Off-Price & Private Sale Other Shopping Other non-shopping 19 Data source: Hitwise, a division of Connexity, 12 weeks ending 7/1/2017

Click Share for Key Products: Brand Name + Handbag Terms 2017 Wholesale partners are a crucial part of the luxury business especially in search marketing. More than one third of handbag product queries in which a luxury brand name is specified (e.g. chloe nile bag ) lead to a retail partner site visit, mainly department stores and online shops. Luxury brands own click share for these terms grew YoY, so that they now capture the majority of clicks. Additionally, pre-owned luxury goods sellers led by Tradesy continue to be competitive in the search space. 54.1% Luxury Brands 10.9% Department Stores 8.9% Online Stores 8.3% Pre-Owned 2.5% Affiliate 1.2% Off-Price & Private Sale 4.0% Other Shopping 10.0% Other non-shopping Top Sites Search Clicks Coach 12.9% Michael Kors 9.5% Louis Vuitton 8.6% Tradesy 3.9% Gucci 3.9% Chanel 3.2% Saks Fifth Avenue 2.1% Nordstrom 2.1% ebay 2.1% Macy s 1.9% Neiman Marcus 1.8% Burberry 1.5% YouTube 1.4% Furla 1.3% % Paid 76% 84% 72% 84% 76% 76% 75% 42% 36% 40% 49% 77% 8% 70% Click Share for Key Products: Brand Name + Shoe Terms Luxury brands capture less than half of footwear search queries that include their brand names (e.g. gucci loafers ). Department stores are the primary competition, and have a much larger click share of branded shoe keywords than branded handbag keywords. Online stores like Ssense and Farfetch also have significant click share as a category. Preowned luxury sellers aren t as significant as in the handbag category; Poshmark owns half this category. 41.4% 21.8% 12.5% 4.4% 3.0% 2.0% 2.3% 12.6% Luxury Brands Department Stores Online Stores Pre-Owned Affiliate Off-Price & Private Sale Other Shopping Other non-shopping Top Sites Search Clicks Gucci 12.7% Nordstrom 4.9% Saks Fifth Avenue 4.9% Neiman Marcus 4.2% Michael Kors 3.4% Coach 2.8% YouTube 2.4% Barneys New York 2.4% % Paid 75% 58% 82% 79% 84% 78% 11% 81% Chanel 2.3% 68% Christian Louboutin 2.2% 68% Poshmark 2.1% 80% Louis Vuitton 1.9% 58% Ferragamo 1.8% 79% ebay 1.7% 42% Data source: Hitwise, a division of Connexity, 12 weeks ending 7/1/2017 20

Social Media Platforms, Followers & Engagement

Social Media Platforms YoY Growth The number of luxury social media followers grew by over 27% in the past year. The 80+ luxury brands in this study now have a combined total of 564 Million likes and followers across three key social platforms: Facebook, Instagram and Twitter. Instagram now surpassed Facebook in audience size. 27 % Overall 54 % 4 % 16 % 23 Data source: Rival IQ

2017 Luxury Social Audience 2017 564 Million Followers Facebook 33% 188.1M Likes 2017 Instagram 50% 281.6M Followers Twitter 17% 94.4M Followers Luxury Social Audience 2016 445 Million Followers Facebook 41% 180.9M Likes 2016 Instagram 41% 182.4M Followers Twitter 18% 81.7M Followers Data source: RivalIQ 24

Social Media Engagement Across the four key social platforms Facebook, Instagram, Twitter and YouTube followers took 936 million+ engagement actions with luxury brands in the last 12 months. The highly visual Instagram allows for quicker likes, making it the most popular Luxury social platform in terms of engagement. Luxury Social Engagement 2017 936 Million Total Engagement Actions Instagram Facebook Twitter YouTube 93% 873.1M Likes & Comments 6% 52.9M Reactions, Comments & Shares 1% 9M Retweets & Favorites 0.09%.8M Likes, Dislikes & Comments 25 Data source: Rival IQ

2017 Snapchat Live Content Captured for Reuse Fendi s Snapchat Tour campaign this year followed influencers like Kendall Jenner, Zara Martin and Irene Kim, as they took over the brand s account to share their Fendi moments around the globe. Fendi captured and reused the content on their site for fans to engage with. A Whimsical Way to Reveal Collections New York designer Misha Nonoo revealed her collection exclusively on Snapchat rather than a traditional show. Illustrator Ana Strumpf then decorated the images in real-time using the app s drawing tools via an ipad. 26

Facebook Like Counts & Average Engagement Rate per Post Facebook Page June 2017 Likes Avg Engagement Rate per Post Facebook Page June 2017 Likes Avg Engagement Rate per Post Louis Vuitton 19,425,053 0.10% Ferragamo 1,483,295 0.08% Dior 16,009,841 0.08% Balenciaga 1,217,973 0.05% Burberry 15,602,127 0.02% Miu Miu 1,209,444 0.05% Michael Kors 15,116,247 Oscar De La Renta 1,136,272 0.14% Chanel 15,103,002 0.33% Tod s 1,133,376 1.40% Gucci 13,749,391 Hogan 1,097,099 0.04% Dolce & Gabbana 9,483,206 Diane von Furstenberg 960,907 Armani 7,004,013 Jean Paul Gaultier 958,447 0.04% Ralph Lauren 6,141,145 Moschino 921,844 0.16% Prada 6,140,988 0.08% Stella McCartney 898,991 0.14% Versace 4,778,527 0.07% Alexander Wang 822,180 0.05% Coach 4,576,706 0.05% Balmain 744,347 1.16% Louboutin 3,296,638 0.12% Giuseppe Zanotti 717,916 0.82% Jimmy Choo 3,005,809 0.25% Kenzo 694,192 0.05% Moncler 2,948,062 0.07% Escada 684,176 Saint Laurent Paris 2,748,094 Lanvin Paris 676,557 0.04% Valentino 2,661,888 0.05% Furla 660,539 0.21% Givenchy 2,646,675 0.10% Bottega Veneta 637,095 0.19% Roberto Cavalli 2,370,732 0.05% Trussardi 586,581 0.12% Fendi 2,251,619 0.07% Dunhill 565,423 0.07% Hermès 2,112,253 0.27% Bally 520,779 0.05% Marc Jacobs 1,924,244 0.05% Marchesa 517,655 0.09% Alexander McQueen 1,920,312 0.11% Mulberry 495,151 0.12% Chloé 1,661,832 0.10% Ermenegildo Zegna 446,668 0.19% Tom Ford 1,565,356 0.16% Maison Margiela 402,999 0.15% Louis Vuitton, Dior, Burberry, Michael Kors and Chanel lead with 15 million+ U.S. Facebook likes. Tod s and Balmain, with smaller fan bases, got the highest average engagement rate per post, at 1.4% and 1.16% respectively. Average Facebook Engagement Rate for Luxury Brands: 0.20% 27 Data source: Rival IQ, US Audience

2017 And We re Live Fans experience Gucci s live runway experience in Milan, garnering over 70k views and 4k reactions. With mobile dominating social engagement, fans gain exclusive access to events and runways from the palms of their hands. Video Storytelling Burberry s Facebook feed is dominated by video vignettes, many of which showcase their short films around new collections. Video Storytelling Hermès takes a similar approach with their newest houseware collection debut, further emphasizing the popularity of luxury lifestyle content. Facebook Like Counts YOY Growth Avg Engagement Rate per Post Facebook Page June 2016 June 2017 Additional Likes Chanel 13,793,744 15,103,002 1,309,258 0.33% Louis Vuitton 18,562,603 19,425,053 862,450 0.10% Dior 15,248,079 16,009,841 761,762 0.08% Gucci 13,154,442 13,749,391 594,949 Versace 4,295,263 4,778,527 483,264 0.07% Prada 5,667,055 6,140,988 473,933 0.08% Armani 6,640,440 7,004,013 363,573 Valentino 2,356,663 2,661,888 305,225 0.05% Givenchy 2,374,615 2,646,675 272,060 0.10% Tom Ford 1,295,217 1,565,356 270,139 0.16% Data source: Rival IQ Chanel continues to gain substantial Facebook followers, adding 1.3 million likes year-over-year. Posts that promoted fashion shows and behind the scenes peeks at creating the couture collections engaged fans. Louis Vuitton gained 862,450 likes in the same time period. Top engaging posts were related to fragrance, new collections, including the America s Cup Collection for men and the brand s partnership with UNICEF. 28

Instagram Follower Counts & Average Engagement Rate per Post Instagram Profile June 2017 Followers Avg Engagement Rate per Post Instagram Profile June 2017 Followers Avg Engagement Rate per Post Chanel 22,844,793 0.56% Roberto Cavalli 4,040,906 0.45% Louis Vuitton 17,832,738 0.40% Balenciaga 3,807,666 0.41% Dior 16,041,601 0.47% Giuseppe Zanotti 3,533,959 0.72% Gucci 15,921,999 0.43% Alexander Wang 3,471,217 0.46% Dolce & Gabbana 14,046,715 0.32% Salvatore Ferragamo 2,344,326 0.39% Prada 12,844,152 0.28% Saint Laurent Paris 2,320,519 0.68% Michael Kors 10,284,055 0.50% Oscar de la Renta 2,187,196 0.73% Louboutin 9,997,031 0.38% Manolo Blahnik 2,020,397 0.68% Burberry 9,639,938 0.32% Coach 2,014,147 0.70% Versace 9,555,779 0.51% Maison Martin Margiela 1,787,121 0.82% Valentino 9,076,090 0.25% Marchesa 1,782,925 0.64% Givenchy 8,666,972 0.31% Diane von Furstenberg 1,766,564 0.28% Armani 8,576,359 0.40% Kenzo 1,528,076 0.44% Fendi 7,565,906 0.51% Emilio Pucci 1,471,732 0.32% Balmain 7,081,428 0.49% Bottega Veneta 936,295 0.43% Jimmy Choo 6,744,684 0.73% Marni 928,189 0.54% Marc Jacobs 6,526,236 0.36% Jean Paul Gaultier 886,373 0.61% Ralph Lauren 6,356,651 0.49% Moncler 858,114 0.60% Tom Ford 5,552,595 0.44% 3.1 Phillip Lim 821,464 0.24% Moschino 5,117,539 0.41% Tod s 784,269 0.47% Hermès 5,089,489 0.45% Proenza Schouler 701,050 0.47% Chloé 4,835,471 0.56% Loewe 667,166 0.53% Alexander McQueen 4,795,535 0.68% Celine 597,936 0.78% Miu Miu 4,290,637 0.54% Furla 523,813 1.07% Stella McCartney 4,235,599 0.41% Mulberry 522,536 0.37% Given Instagram s focus on imagery, it s no surprise that many luxury brands are seeing similar sized or larger followings on Instagram compared to Facebook. With 14 million+ followers each, top brands Chanel, Louis Vuitton, Dior, Gucci and Dolce & Gabbana have the largest Instagram fan bases. Average Instagram Engagement Rate for Luxury Brands: 0.63% 29 Data source: Rival IQ

2017 Immersive Full Screen Experiences with Stories Louis Vuitton uses Instagram Stories to immerse followers in the brand experience. During Paris Fashion Week, the brand s Stories went beyond the traditional runway show to include various types of behindthe-scenes content. Star Power at #CannesFilmFestival Model and top social media influencer, Bella Hadid in her Dior gown and Dior makeup before attending the Film Festival. Instagram follower Counts YOY Growth Instagram Profile Chanel Gucci Louis Vuitton Dior June 2016 June 2017 13,355,373 22,844,793 9,270,382 11,733,782 10,563,032 15,921,999 17,832,738 16,041,601 Additional Followers 9,489,420 6,651,617 6,098,956 5,478,569 Avg Engagement Rate per Post 0.56% 0.43% 0.40% 0.47% Significant growth in Instagram followers was tracked from a number of luxury brands. For the third year in a row, Chanel added the most followers YoY, gaining 9.5 million. Chanel promoted videos from fashion shows along with celebrity photos. Gucci spotlighted Michelle Obama attending the Kennedy Center Honors and Rihanna at Coachella. Louis Vuitton s top engaging posts featured the hastag #SpiritofTravel and highlighted new luggage for the 21st Century traveler. Dolce & Gabbana 9,683,504 14,046,715 4,363,211 0.32% Prada 8,800,218 12,844,152 4,043,934 0.28% Versace 6,178,732 9,555,779 3,377,047 0.51% Armani 5,244,053 8,576,359 3,332,306 0.40% Givenchy 5,817,102 8,666,972 2,849,870 0.31% Burberry 7,050,479 9,639,938 2,589,459 0.32% Data source: Rival IQ 30

YouTube View Counts & Average Engagement Rate per Post YouTube Channel June 2017 Views Avg Engagement Rate per Post YouTube Channel June 2017 Views Avg Engagement Rate per Post Chanel 321,578,915 0.30% Trussardi 9,468,782 Dior 261,448,883 0.18% Moschino 8,885,054 0.92% Louis Vuitton 121,302,796 0.23% Kenzo 8,161,498 2.84% Burberry 95,955,065 0.37% Mulberry 7,664,637 0.30% Dolce & Gabbana 54,884,808 0.24% Hermès 6,639,580 0.08% Michael Kors 46,480,200 1.27% Dunhill 6,458,373 0.40% Gucci 40,725,858 0.39% Moncler 4,776,713 n/a Fendi 35,857,374 0.70% Hogan 3,987,272 n/a Ralph Lauren 34,888,001 0.21% Diane von Furstenberg 3,898,372 0.15% Prada 31,702,875 0.23% Alexander Wang 3,372,515 2.57% Jimmy Choo 23,748,225 1.00% Alexander McQueen 3,015,130 n/a Coach 23,155,910 0.20% Saint Laurent Paris 2,546,678 1.35% Tom Ford 22,209,426 1.18% Bally 2,277,066 0.61% Armani 22,131,630 0.32% Roberto Cavalli 2,048,722 0.89% Marc Jacobs 18,772,551 0.42% Balmain 1,558,765 n/a Miu Miu 18,436,834 0.52% Stella McCartney 1,488,303 2.04% Ermenegildo Zegna 17,484,782 0.65% Berluti 1,103,044 1.60% Tod s 16,443,179 n/a Proenza Schouler 964,140 n/a Chloé 16,043,323 1.42% Thomas Pink 908,548 0.10% Valentino 14,414,605 0.26% Escada 730,863 0.57% Bottega Veneta 13,680,246 0.07% Schiaparelli 706,550 0.77% Salvatore Ferragamo12,683,340 0.35% Lancel 629,349 2.16% Jean Paul Gaultier 11,981,969 0.52% Oscar de la Renta 593,994 1.84% Versace 11,421,035 0.41% Furla 565,035 0.87% Longchamp 10,544,257 0.29% Balenciaga 545,049 1.08% Chanel and Dior remain leaders in attracting luxury consumers to view content on YouTube. Given the power of video, engagement rates are highest overall on YouTube. Notable standouts include Kenzo and Alexander Wang. Average YouTube Engagement Rate for Luxury Brands: 2.34% 31 Data source: Rival IQ

2017 Mixing Music & Fashion Jimmy Choo celebrates its 20th anniversary with a product-infused music video, starring Amber Valletta, Milla Jovovich, Sasha Pivovarova, Lexi Boling, Taylor Hill, Jasmine Tookes and Xiao Wen Ju. YouTube View Counts YOY Growth YouTube Channel June 2016 Lifetime Views June 2017 Lifetime Views Additional Views Avg Engagement Rate per Post Musician/actor Carrie Brownstein directed a short film that parodies modern social media called The Realest Real for KENZO s fallwinter campaign. Dior 164,166,223 261,448,883 97,282,660 0.18% Chanel 242,418,906 321,578,915 79,160,009 0.30% Louis Vuitton Burberry Michael Kors 77,421,508 60,207,130 16,425,453 121,302,796 95,955,065 46,480,200 43,881,288 35,747,935 30,054,747 0.23% 0.37% 1.27% Alexander Wang s video supporting the #WANGF16 campaign got a lot of attention. Shot by Director X, the star-studded films depict an uninhibited house party. Tom Ford 6,646,050 22,209,426 15,563,376 1.18% Marc Jacobs 6,500,054 18,772,551 12,272,497 0.42% Fendi 26,527,942 35,857,374 9,329,432 0.70% Jean Paul Gaultier 4,629,062 11,981,969 7,352,907 0.52% Ermenegildo Zegna 10,392,784 17,484,782 7,091,998 0.65% Data source: Rival IQ 32

Twitter Follower Counts & Average Engagement Rate per Tweet Twitter Handle June 2017 Followers Avg Engagement Rate per Tweet Twitter Handle June 2017 Followers Avg Engagement Rate per Tweet @Chanel 12,997,639 @Coach 664,050 0.05% @MarcJacobs 8,803,650 @ProenzaSchouler 558,119 @Burberry 8,094,807 @Ferragamo 463,622 0.02% @Dior 7,644,471 @OscardelaRenta 454,849 0.02% @LouisVuitton_US 6,315,904 0.02% @Fendi 441,443 0.06% @DolceGabbana 4,787,197 @Balmain 437,465 0.08% @Gucci 4,473,395 @LanvinOfficial 425,870 @YSL 3,921,174 @ChloéFashion 401,004 @Versace 3,774,545 @Mulberry_England 397,371 @MichaelKors 3,517,650 @Moschino 393,836 0.02% @Armani 3,219,386 0.02% @MarchesaFashion 354,689 @LouboutinWorld 2,718,029 @Kenzo 294,679 0.04% @RalphLauren 2,100,881 0.02% @Margiela 270,057 0.05% @MaisonValentino 1,878,418 @ManoloBlahnik 210,196 0.04% @McQueen 1,687,644 @JasonWu 186,345 @Roberto_Cavalli 1,535,722 @EmilioPucci 170,884 @JPGaultier 1,418,129 @MiuMiuOfficial 163,098 0.09% @JimmyChoo 1,385,488 0.02% @Zegna 123,406 0.04% @Moncler 1,241,137 @GZanottiDesign 116,561 0.30% @StellaMcCartney 1,020,751 0.02% @TomFord 93,778 0.18% @DVF 982,197 0.00% @HelmutLang 81,813 0.07% @Givenchy 853,887 0.05% @LoeweOfficial 81,762 @Prada 805,600 @Furla 79,480 @AlexanderWangNY 703,235 0.02% @31PhillipLim 66,119 0.02% @Balenciaga 673,918 @BottegaVeneta 46,746 0.12% Chanel retains its lead with nearly 13 million Twitter followers. All topping 6 million+ followers, Marc Jacobs, Burberry, Dior and Louis Vuitton follow. Engagement rates overall are lowest on Twitter; however, some standouts include Giuseppe Zanotti, Tom Ford and Bottega Veneta. Average Twitter Engagement Rate for Luxury Brands: 0.08% 33 Data source: Rival IQ

2017 Thumb-Stopping Visuals Chanel, who continues to lead the luxury pack on Twitter, uses it as another platform to promote its #InsideChanel series that tracks the story of the brand since the birth of Gabrielle Chanel in 1883. Nostalgia & Brand History Ralph Lauren shares old photographs of Ralph, connecting followers to the brand s history and the man behind the brand, often generating more likes than other celebrity-focused posts. Twitter Follower Counts YOY Growth Twitter Handle June 2016 June 2017 Additional Followers Avg Engagement Rate per Post @MarcJacobs @Burberry @Gucci @Dior @Versace 6,499,858 6,701,763 3,449,918 6,697,722 2,921,323 8,803,650 8,094,807 4,473,395 7,644,471 3,774,545 2,303,792 1,393,044 1,023,477 946,749 853,222 Marc Jacobs, Burberry and Gucci all gained 1 million+ followers YoY. Top engaging tweets from Marc Jacobs included #ObamaFarewell and musician Harry Styles modeling the fall collection. @Chanel 12,170,879 12,997,639 826,760 @LouisVuitton_US 5,590,435 6,315,904 725,469 0.02% @DolceGabbana 4,062,262 4,787,197 724,935 @LouboutinWorld 2,061,576 2,718,029 656,453 @Armani 2,830,781 3,219,386 388,605 0.02% Data source: Rival IQ 34

2017 PMX Agency (www.pmxagency.com) leads with an insight-driven, consumer centric approach to marketing. With a history steeped in performance and brand marketing, PMX Agency combines an intuitive knowledge of the customer experience with customized, scalable strategies that address clients most pressing business challenges, across: research, customer analytics, SEM, display, affiliate marketing, SEO, content, social, email, direct mail, print & insert, creative, website development and performance management. With a client list of leading global brands that spans key verticals, including Retail, Financial Services, Education, Publishing, Technology, Nonprofit and B2B, PMX Agency continues to grow its reputation as the industry s most critical thinkers and leaders. PMX Agency is a proud member of the Stagwell Group, a collaborative group of agencies who are out to reinvent the holding company according to the Wall Street Journal. The Stagwell Group portfolio includes more than a dozen best-in-class, digital-first agencies who are focused on what modern CMOs need. Learn more about Stagwell at www.stagwellgroup.com. PMX Agency s 2017 Trend Report: Luxury Brands Online, in its eighth edition, sheds light on the way today s top luxury brands engage and communicate with consumers online. Our report leverages a range of metrics, like site visits, brand and product searches, and social media engagement, in order to understand how marketing techniques used by luxury brands resonate with customers. We ve looked at over 80 apparel brands as a benchmark for the luxury sector, ranging from centuries-old icons like Louis Vuitton and Hermès, to large relatively modern flagships like Michael Kors and Ralph Lauren that offer high and mid-level price points. CONTACT PMX Agency 5 Hanover Square New York, NY 10004 Main: 212.387.0300 www.pmxagency.com 36

PMX AGENCY S TREND REPORT: LUXURY BRANDS ONLINE 888.960.0177 INFO@PMXAGENCY.COM PMXAGENCY.COM PMX Agency 2017