By Claire Teo
June 30, 2021
McKinsey alumnus Portia Antonia Alexis believes that neuromarketing is the future when it comes to luxury goods consulting
The field of luxury goods consultancy is well-established, and one that has always relied largely on traditional marketing techniques. However, as the market becomes oversaturated and consumer shopping habits change over time, these strategies are becoming increasingly outdated, says Portia Antonia Alexis, a London-based consumer goods analyst. This was something she realised during her tenure as a luxury goods consultant at consulting firm McKinsey, when conducting research as part of her work.
“While the focus groups, consumer reports, and customer observations that we used in our consulting work was helpful, it didn’t provide the full picture,” she recalls, citing that consumers might feel pressured to answer a certain way when participating in focus groups.
“I knew that I needed to find something that would give my clients the type of data that their competitors did not have access to. In my search for said data, I came across the emerging field of neuroeconomics, and soon fell down a rabbit hole.”
With a keen eye on market trends, Alexis’ focus has recently shifted to the Asia-Pacific region, which is considered to be the second largest regional market for cosmetics after Europe. The Briton, who also boasts stints in Newton Investment Management and Bank of America Merill Lynch, is “bullish about the prospect of market growth in the region”.
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“I began reading the works of early proponents such as Jonathan Cohen, Christina Paxson, and Colin Camerer. These researchers proposed that by studying the brain’s response to different marketing techniques, brands could formulate advertising that was well-suited to their target audiences,” said Alexis.
“I soon became confident that this approach was exactly what my clients in the luxury goods industry needed in order to launch successful marketing campaigns.”
Inspired, Alexis took a leap of faith, putting her consulting job on hold to further her studies in neuroscience. By combining her two passions, she aims to gain a deeper understanding of how the brain subconsciously responds to stimuli such as branding, price, and advertisements, and how these responses translate into sales behaviour. She is, however, careful to point out that neuromarketing is not a replacement for traditional marketing techniques. Instead, she says, it serves to enhance them by providing unbiased data that can be utilised more effectively.
Here, Alexis answers five questions about neuromarketing and what it means for the future of luxury goods consulting.
Why did you make the shift from traditional consulting methods to using neuroscience?
Portia Antonia Alexis (PA) A few years ago, I came to the realisation that many consulting firms were starting to offer very similar services. While traditional techniques can only determine the success of a marketing program after analysing sales, click-through rates, or reviews, neuroeconomics taps into the consumer’s subconscious immediately after they see an advertisement or commercial by collecting data on their initial response and then seeing whether or not that translates into a sale. Therefore, if consultants are looking to increase the quality of their analytics, then there’s no question that neuroscience can provide an extra dimension to their analyses.
What are the possible neuroscience-driven methods of data collection that you can envision being used in the future?
PA In the early days of neuroscience-driven data collection, elaborate machines such as fMRIs (functional magnetic resonance imaging machines), which detect blood flow in the brain, and EEGs (electroencephalograms), which record electrical signals on the scalp, were the norm. However, these machines are designed for use in a lab setting and cannot easily be used on consumers in real-time.
Instead, I envision less invasive tools that can be used by luxury brands either in-store or in front of advertisements to be the future. An example is a facial coding system set up in front of a storefront or billboard. Once the data is collected, the facial expressions can then be analysed to determine a person’s subconscious reactions to a given marketing technique. In the context of the beauty industry, this can be useful in determining how certain demographics respond to certain models or makeup tones in a commercial.
Will facial coding systems be an infringement of customers’ privacy? How will consent be obtained?
PA A very clear distinction has to be drawn between facial recognition and facial coding. While facial recognition takes measurements of your features to personally identify you, facial coding is much less invasive, as it focuses on facial responses to stimulus rather than facial identification. Therefore, the legal implications of these types of systems are far less severe; however, this reality may not hold up in the court of public opinion. In any case, the world of neuroscientific research collection is still growing, and so as it becomes more prevalent, I wouldn’t be surprised if individual governments begin to regulate it more stringently.
Do you have an example of a successful neuromarketing campaign carried out by a luxury brand?
PA One such application is the concept of anchoring—when a consumer experiences a cognitive bias where they depend very heavily on an initial piece of information to make their future decisions. If a company can create an expensive anchor product that is also attractive to the consumer, all future estimates on what constitutes a fair price will be made in relation to it. In the luxury industry, we see this in play through the Hermès Kelly and Birkin bags, the Gucci Marmont belt, and the Louis Vuitton Speedy bag. Since their launch, these luxury companies have been able to take advantage of their consumers’ cognitive biases to then sell them other branded products at similar price points, which by extension helps their bottomline.
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Do you see neuroscience playing a larger role in branding in the future?
PA We already see that neuroscientific techniques are being used to influence branding today. Be it deciding what colour to use on a logo or creating a feeling of scarcity towards a product, the principles of the neuroscientific field are already prevalent. However, as consultants, researchers, and marketers continue to develop a greater understanding of neuroscience, I expect to see neuroscientific principles gain an increasingly prominent role in the realm of branding.
Follow luxury goods analyst Portia Antonia Alexis on her Twitter account @PortiaAntonia.