Early last year, Bain & Company predicted that current rates of online sales in the luxury industry (currently at about 10-11%) will reach up to 30% of overall sales by 2025.[1] As the year went on, this prediction looked more and more likely to come true: online shopping for luxury goods had increased from 12% in 2019 to 23% by the end of 2020.[2]  Luxury fashion companies have even begun online presentations of their new collections — Chanel's Balade en Méditerranée (“a trip around the Mediterranean”) event, originally planned for the island of Capri, was moved online as a result of the pandemic. Whether this online migration would have occurred were it not for the Coronavirus epidemic forcing luxury companies' hands is a matter of debate: indisputable, however, is the fact that it is happening, and it's not just about sales.

Now let's narrow down our scope and focus on the luxury market in Russia and how these changes are manifesting there.

The Luxury Market in Russia

As we can see in this chart, sales in the luxury market in Russia is expected to not only recover from the dip in 2020 due to the coronavirus, but to exceed the pre-Covid-19 levels in 2019.

We can assess the luxury market in Russia in several ways, but in our case, we are most interested in the digital presence of the luxury fashion industry in Russia. We've boiled down the data and distilled it to a few important points:

• Search query dynamics — According to Yandex data, interest in luxury fashion brands from September 2020 — February 2021 was 21% higher than the same period a year before.
• Interesting geographical factors — Moscow leads in terms of interest in luxury fashion brands, but search traffic is growing faster outside of the capital. YoY comparisons of the periods of June to August 2019 and 2020 showed an 18% increase in search queries related to luxury fashion in Moscow, whereas the growth outside of Moscow in the same period amounted to 23%. This growth was most noticeable in the Southern Federal District, Siberia and the Far East.
• Gender and age divides — The most interest in luxury fashion is observed among younger users and women, whereas older users and men are more likely to be interested in luxury watches.

Which formats offered by Yandex.Direct work best for luxury companies?

A. The Yandex Home Page: The face of Yandex

If your primary concern is increasing brand awareness among a defined audience, look no further.

As the most visited page in the Russian-speaking internet, with a monthly audience of over 75 M users, the Yandex Home page guarantees broad reach and brand safety, as it shows only the highest-quality content that has already passed moderation with expanded requirements.

The Yandex Home Page offers a premium placement for your ads thanks to the absence of competing ads on the page. Your message gets all the user's attention, and best of all, you only pay for impressions that meet our strict viewability standards: at least 50% of the banner should be in the visible area of the user's main window for at least 2 full seconds. Our own standards are even stricter than those of the Interactive Advertising Bureau!

B. Dynamic ads: Automatically generated Search ads

Dynamic ads save advertisers with large product ranges significant amounts of time. Whereas previously it was necessary to check which products were in stock, then choose an ad title, keywords and a landing page for each one, Dynamic ads streamline this process by taking data from your site or product feed and automatically generate individual ads for each product and related query. Moreover, our advertisers report that these results come at a significantly lower cost.

Dynamic ads are a universal tool helpful to advertisers looking to expand their reach, enter new markets and cover low-frequency search queries.

They can improve the performance of your regular Yandex.Direct campaigns by giving you an opportunity to test out new keywords and adding them to your keyword list. Dynamic ads evolve along with users' behavior in search, continuously incorporating new queries that would pass by unnoticed in traditional campaigns, so checking Report Wizard to see which keywords brought effective impressions and adding them to your keyword lists can help keep them fresh.

C. Smart Banners: Retargeting with minimum preparation and maximum effect

You provide Yandex.Direct with your product feed, and the system uses it to automatically generate Smart Banners customized for your audience. Each and every user sees a personalized offer including (as an example) items they left in their cart, making it an effective tool for retargeting users who left your site without completing a purchase. Other advantages of Smart Banners include:

1. There's no need to choose keywords or ad texts for every product on your site. Yandex.Direct automatically generates Smart Banners with the products you select for promotion.
2. Smart Banners take up an entire ad block — the space that would normally be occupied by several Text & Image ads in Yandex.Direct — meaning they get a user's full attention.
3. Smart Banner impressions appear in the Yandex Advertising Network, whose audience has little overlap with the audience of Yandex Search, meaning that you are reaching people you won't reach with your traditional search campaigns.
4. Smart Banners update regularly and automatically, meaning your ads will always be relevant in relation to your inventory.
5. Smart Banners are display ads with payment per click. You pay for user visits to your site, not for ad impressions. Furthermore, Yandex.Direct display strategies offer additional options to target your ad impressions.

This combination of ads formats — the Yandex Home page, Dynamic ads and Smart Banners — offer luxury fashion companies a means to cover all their bases as they reach out to the Russian audiences likely to be interested in their products. Brand awareness and the higher levels of the sales funnel are covered by the Yandex Home page, Dynamic ads grab the attention of users on Search and give up-to-date information about products currently in stock.

If we've piqued your interest and you are interesting in try out one (or all!) of these formats, you can find more information in the corresponding Help sections about the Yandex Home page, Dynamic Ads and last but not least, Smart Banners.

If you would like a bit more assistance, get in touch with us. We'll be glad to help! As always, good luck with your campaigns!

[1] https://thebell.io/chto-analitiki-predskazyvayut-rynku-mody-rasprodazhi-bankrotstva-zavisimost-ot-kitaya

[2] https://www.moodiedavittreport.com/bain-company-luxury-study-underlines-rapid-growth-of-online-sales-and-continued-repatriation-of-tourist-spend-to-local-markets/