24 Jun Unpacking the Digital & Luxury Conundrum
Surprisingly perhaps, marketing is a relatively nascent discipline in luxury companies. While the value of ‘brand’ is highly recognised, of course, the level of marketing sophistication behind the scenes has not been high on the agenda of executives until recently. Hermes, for example, did not even have a website until three years ago. Why this ‘slow adaptation’ of digital in the luxury space?
Firstly, real luxury has time – quite literally. Ten years is nothing in the grand scheme of how some of the greatest luxury brands have evolved. Secondly, luxury companies are afraid of adopting new media too quickly – and rightly so. The web means [giving people] access to information that was previously reserved for a select few, privy to an ‘elite’ of connoisseurs. Enjoying insights and behind-the-scenes stories forms an intrinsic part of ‘being luxury’. Stories are part of the traits that make luxury brands authentic, exciting, exclusive and hugely (story)-rich. Now this information is available for everyone who wants to look – it’s just one click away. Social media means the democratisation to luxury brands. Sounds strange? But think about it: if you are at the top of the luxury scale, then do you really want to give this richness away to just anyone? And if so, why? That’s a question a lot of luxury companies may not have answered properly yet. Research suggests luxury brands should pay close attention, though. For while the digital ‘transactional value’ for luxury brands is still low, the influence of digital is huge.*
For luxury brands, the single most effective way to market to the people who have the propensity to buy luxury products is experiential. For high-end cars, for instance, it is – still, and very much so – about getting people into these high performance machines so they can smell the leather, touch and feel the quality – and feel the incredible thrill when opening up a V12 engine hidden underneath that beautiful ‘skin’. You cannot substitute that with a two-dimensional experience on any digital media – at least not as it currently stands.
But make no mistake; digital does have its place …
When we talk about aspiration and reach, digital and social media becomes a very effective channel to build aspiration and desirability for luxury brands and extend reach in a highly efficient way. Very complementary to what traditional PR has and is achieving. But not too quick … whilst it’s tempting to jump into the ‘doing’ before you go about implementing a digital strategy for a luxury brand, think very carefully why you do it, what it needs to achieve and how you will deliver against these objectives continuously and for the long term. Don’t just think ‘technology’ and ‘design’ – I’m sorry to say, but these are the easy bits. And there are plenty of well-paid agencies that can help you with it. Think about the organisational implications, the resources required and the global scale of the web. How will you make sure you feed your story-hungry destination in the globalised digital world continuously, with relevant and on-brand content, and with the highest degree of integrity so inherent in luxury brands?
Read more of my thoughts on this topic in my recent interview with MarketingWeek (UK) here.
* McKinsey 2011: luxury goods online transactions €6.2b, influence multiplier = 6 or €36b