Selling The Dream Online:
Business/Luxury Branding
Viewpoint by Andrew Scharf, Head of the WCW Group
Selling dreams is both easy and difficult. First you must have the capacity to dream and to imagine something, which is unique. To test drive this concept, I have instituted a workshop to get young aspirants involved in stretching their understanding of the luxury sector, and particularly to see if they could take their insights and apply them to online environments.
For example, if you were going to launch a new luxury leather goods brand online, would the Internet be sufficient? Or do you need to be an established institution with a credible name brand and point of sales in a recognized city such as Paris, Milan or London? What about a store within a store such as those brands operating within Galeries Lafayette and other key department stores across Europe?
Ask yourself an important question, before we go any further:
Are Internet websites seen by people as legitimate points of sale for luxury brands?
Or do people feel that if they are going to spend the money for such high cost items that they prefer to do so in person, where there is more personal attention and human contact?
Oddly enough many French luxury brands did not sell online prior to 2004. Speaking with experts in this field here in Paris, many players told me that selling in this manner was “too American”. This was a coded answer to say “too down market”. European luxury firms have positioned themselves and see themselves as “so exclusive” that the Internet does not really come into the equation.
It is true that the USA has its own brand of retail performance. Think about these slogans: “Buy Now Save” or “Special Offer, or For A Limited Time Only!”
Mass-market promotions have their own psychology. Remember however, purchase behaviour is shaped by perception and psychological reflexes.
The first firm to break this barrier was Louis Vuitton in 2002. Yes, it is true that their e-retail business was first test driven in the States before being introduced back in France and Europe. Gucci would quickly follow suit. Now luxury means many things to many people. “Luxury” die-hards of the old school see firms such as LV and Gucci as “sell-outs” going the route of selling at any cost.
However, the nature of luxury has been so transformed that the democratisation of luxury branding can no longer be ignored. If you doubt this, visit these stores Paris flagships and observe the clientele. They are young, affluent, probably text messaging someone while shopping, and the demographics indicate that a high percentage of current customers come from the Middle East and the BRICs.
Do you need to be further persuaded?
Internet snobism is not a commercial or strategic approach. Since the market has been so transformed, luxury firms must adapt or adopt a very low profile business model. This model can still work if you are a small manufacturer or designer based in Florence or Naples and depend on word-of-mouth or street traffic to trade. However, if you desire to capture a wider market than you need a window, which is interactive and promotes, using the latest tools, videos, and social networks. The luxury market landscape has been transformed. All online channels must be used to promote and enhance customer brand loyalty.
These are the times in which we live, and your business model must adapt. It is possible to show luxury online with panache. Just a look at the way Karl Lagerfeld portrays Chanel online. It is state-of-the-art marketing and promotion without loosing any of the brand equity and integrity. Statistics show that wealthy customers are buying online without hesitation airline tickets, home entertainment equipment, and even designer furniture. Clearly this includes luxury clothing, leather items, handbags, briefcases, and accessories.
To go to the next level fashion media such as Vogue, Elle, and Glamour have been posting web addresses for advertisers and references to products and services within their magazines. The question of selling or not selling luxury online is now mute. The point is not “whether” but “how”. Social networks have been responsible for the market shift with their “exclusive” communities and focus where the wealthy congregate aka Google Buzz, Facebook, Linkedin, Viadeo, and Twitter to name just a few. For example, Forrester Research in the UK indicates that in 2008 the Brits spent 40.5bn Euros online, including luxury-clothing brands. In Germany and in France, figures run at 27.9bn Euros.
To make this possible, it is best to stand back a moment and examine Internet strategy assessment. Internet has the power to transform brand image reinforcement beyond the status quo into global brand awareness, client acquisition and retention. This does not deny that selling online is a challenging experience.
For example, pay a visit to Cartier online. It is just one brand, which has distinguished itself with its “Love Collection”. Using Luxist provides the firm with a forum for discussing, presenting, and sharing information on the collection. What this engagement does is support the actual website of the enterprise. Ever consider why the shopping network, Net-A-Porter is doing such a bang up business online? Maybe it is time that you should.
The web today is a 360-degree experience. It incorporates TV channels, blogs, exclusive private sales, and allows customers to interact at each stage of the shopping experience.
There are 6 principle steps to follow:
Website access, watch, blog and post, browse, select purchase, share
Tools Of The Trade
The tools on the site in question should stress “watch”, “comment”, “share”, “send”, “tag”, and “suggest”. Online consumers have shifted expectations. You need to be able to fulfil those expectations in the “right” environment. Give them the sensation that they are amassing affluence and prestige and you will have secured their intimacy.
Finally, the brand must be able to show an easy navigation system to product or service selection. The goal here is to tantalise the public with their signature products and services. Remember, customers need a real reason to visit, select, and purchase. Highlight the “best-sellers”. Why? Because they stand out and draw attention.
Pricing Approach
Do not worry about the price. The Internet is no longer a discount cut and slash haven for bargain hunters. No luxury brand is obliged to offer sales or discounts. It only serves to weaken and break the firm’s brand equity and credibility with its online audience. However, you do need a coherent pricing strategy in tune with what a customer is willing to pay.
The e-Boutique
Creating an e-boutique is now a given practice. The shop must engage and be sexy. It is a way to bring the audience into your universe. Immerse them in the “lifestyle” experience. This requires a front office interface, which is snazzy but has the back office support to see that things run smoothly and quickly. There are many tools you can use to get these points across such as zoom, 3-D, spin and flip, personal avatars and virtual models. The web experience must be rich. Yes, the multi-media effect must be dramatic because this is how sophisticated your audience has now become.
Service Optimisation
Technology has made it possible to know the particulars of your clients shopping histories, habits and preferences. Go beyond the staid FAQ. Make the shopping experience interactive, and even go as far as making recommendations.
About The Author
Andrew Scharf is a regular contributor to WCW INSIGHT on Business Strategy, Luxury Branding, and Lifestyle. He heads the Career Management divisions of Whitefield Consulting Worldwide, helping people harmonise their professional objectives with their personal aspirations.
For Further Information, visit:
http://www.whitefieldconsulting.com
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