Why Luxury Brands Have a Difficult Time Online

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hotel turkei of 9:47AM February 14, 2010

As the owner of an online beauty and fashion site (ambermag.com) for the past two years, it's evident every second how much online activity has transformed the way we consume, connect and, yes, handle commerce. Luxury brands and the stores they have, indeed offer a luxe experience like none other. So why would you not create a similar experience online? As this economic downturn forces every sector to r-echink how it does business in order to survive and thrive, there will be less people going into those stores to feel the experience. Instead, more people (no matter their economic standing), and certainly the next generation who are reared on texting, will embrace an online store with amazing photography and top cusotmer cervice (think Zappos, but more chic) with open arms dipped in diamonds.

Marcia Cole of NY 7:34PM January 30, 2009

How about using web for lead generation? Simply to get a prospect to 'rise their hand'?
The super affluent spend a lot of time online because they have little personal time. If all of your efforts center around getting them in your store, you're missing an opportunity.

Susan Adams of PA 10:46AM January 22, 2009

I think you should differ the "luxury brand value" and the "emotional aspect" with the necessity of the changed customer behavior. These HNWI´s or premium target group in common is very emancipated and strungle a luxury product access on a all channels.
The challange is to connect all channels (point of sale, online etc.) for a holistic and integrative brand & marketing strategie. If these instruments are observed & handeld separatly, the luxury brands will loose further high potential in the communication (and of course distribution) with the customer. The web is a opinion-leading platform,even on a digital and virtual base.

Andreas 3:36AM January 21, 2009

Let's not confuse affluence purchases with luxury products. To understand the 94% it would also need to be seen what kind of purchases do they really make. Brands, Price points etc. People affluent or not.....when they wish to buy/purchase Luxury products, goods, services look for a far superior experience, probably discreet mostly, unless celebrity:) which are not really available in the online space. Similarly, the luxury manufacturers/sellers do not wish to advertise for all and sundry both their prices as well as some of the exclusive range of products.
Whilst it may appear to be a fruitful space, it is not really so in actual terms. There are some, who have a discreet presence, offering a selective catalog etc. but that is the extent of their presence.
Personally I do not see it happening in the global scenario for the next half decade or so.

Anaggh A. Desai 2:24AM January 21, 2009

It isn't enough simply to state that an item is a luxury brand. It needs to be explained, given a pedigree, vouched for by historical background, presented in a topical context. We do this in a small way with our site on Savile Row (www.savilerow-style.com in case you are interested) that isn't a catalogue of expensive brands but a site in praise of hand crafts, value and exclusiveness - all virtues that are due for re-appreciation. Price doesn't come into it.

Marie Scott 10:05AM January 19, 2009

Agree with you entirely, Damian XX. That said, it strikes me that one of the inherent conflicts of luxury brands and internet presence is the notion of exclusivity that tends (needs?) to accompany the high price tag and "flagship" store concepts. Luxury shoppers are looking for a unique and exclusive experience -- exclusive at least insofar as it is highly personalized. Any luxury brand must have or develop a superior knowledge of its customers. Therefore, being able to accompany its customer throughout all channels, providing a fully integrated and superior customer relationship management (CRM) system is vital for a luxury brand website, whether or not there is e-commerce. A luxury brand website must be excellent in design and experience, but also in its recognition of and communication towards its loyal customers.

Minter Dial 11:43AM January 18, 2009

The basis of Luxury should be quality, craftsmanship, tradition or heritage and this can be conveyed online easily. I would agree that you need to touch, feel and taste, but how many people purchase on first touch, feel and taste? Once experienced is the internet not then just another channel to acquire said products?
The Internet is just another selling channel and should integrate seamlessly with the rest of a company’s retail experience. It is not meant to be the centrepiece of the business and the sooner the luxury industry embraces this and relaxes the sooner they can channel their energies in to producing beautiful products.
There should be enough talent, experience and integrity within a company to make the internet work – it is not going away – so deal with it.

Damian 8:07PM January 15, 2009

One way luxury brands dilute themselves is by having websites that look and function like every other website. The luxury brand is inherently compromised when their site looks and functions like Wal Mart's.
One problem is that they hire developers to design their sites; that's like hiring an engineer to design your dream home.
What they could do is strategize about how to expand the "physical" customer experience to the web. Just as in the physical experience, they could hire designers and creative people to invent ways to expand and improve the visitor's experience online.
And a strictly Flash site is not the way to go (even though I am a big Flash user). One big problem is that Flash content, at this point in time, cannot be searched by search engines (a huge oversight that may at some point may change). Another problem is that Flash has a bad reputation because many of the animations created with it are cheesy, pointless and do not add any real benefit. The sites that do use it well, in general, go overboard and leave off many important pragmatic aspects.
One idea is to design a creative, high end robust site with a mix of practical and relevant multimedia to engage the visitor. Then also include "standard" formatting that can enable quick and easy checkout, be searched by search engines, allow user feedback/reviews, various types of accounts and account levels, etc. Perhaps combining all of these elements in a creative and functional way has the potential to create as much of a luxury experience as possible within the setting of a website.
From an over all branding perspective, the website is still one aspect of the brand. Since we live in a physical world, there is no way that physical elements will go by the wayside and they should not be ignored as aspects of a brand. More and more, however the website is becoming one of the heaviest hitters of the brand collateral and more and more of the physical brand elements are directing people to it.

Chris Lona—CL Design of WA 6:59PM January 13, 2009

Perhaps we need to make the distinction between the cycles of a luxury brand vs. the luxury brand itself.
For a quality newcomer in startup phase, the experience is key. The first "adapters" are the "leaders" of the flock and a form of evangelism and shared experience is required for "buzz ignition" and building a brand value. This requires the experience of getting your hands on something...taste, touch, smell, feel the product or brand experience.
However, once a luxury brand has an established market ie...Louis Vuitton, Hermes etc. even though they want to maintain luxury price points and prestige status...there is a certain familiarity and "know-what" about the brand which makes it accessible to more people via the Internet. This in turn offers the luxury brand an expanded market opportunity for revenue generation. People don't need to learn about the brand at this point, they just need to buy it. And, the truth is...we are just not shopping anymore in the stores of old... these brands need the exposure in order to grow.
I think if luxury brands concentrate on sustaining the value vs. diluting it and using the Internet to fuel their sustainability...we could redefine luxe as "quality" instead of the perception of price & prestige.
With mass manufacturing happening in China, India and other global markets...surely we could have Europe and the US assume the position of innovators of quality/luxury products uncompromised by cost factors but rather marketed to a discerning group of people concerned for quality.
A worthy cause for the case of guilt free luxury.

Cherie Arnold of CA 6:24PM January 09, 2009