We all know that today, we live in a digital world. More and more people around the world have cell phones and computer. They use these devices to surf on the Internet to search information or to purchase. That’s why companies have to digitally transform their business models. We are now going to focus on luxury companies and their digitalization.
The big luxury groups are at a turning point. The digital is changing the way luxury companies do business. Today, digital has become a core component of our life, for consumers and companies. In this article, we will see the interest for luxury brand in becoming digital.
Why do the luxury brands worry about digital?
The characteristics of luxury companies are exclusivity and customer experience. But through Internet, users can access to all information and the sense of exclusivity is not there anymore.
While the digital is reflating the future, luxury brands derive its value from an old history. If we take the example of Chanel. Chanel has been created in 1909. The brand strategy is to keep traditional know-how and its founder legacy, Gabrielle Chanel.
Brands prefer to maintain the exclusivity of what lakes them unique. Luxury brands offer a wide range of icon products and top carryovers with no (or very limited sales or discounts, exclusive offers or fidelity programs), most of the products are non-seasonal, classical. Social media opened up luxury brands to bloggers, trends-setters, influencers, and other digital Instagram and Facebook leaders through 24-hour accessibility of online shopping which permits a luxury brand to spread itself horizontally within different socioeconomic groups at the same time. All that really approves the efficiency of the digital tools and the idea of digital. The Internet is a transparent media and into the source code of its pages!
Luxury brands are sold in “a box”; it is no coincidence that so many luxury brands distribute their products in their own brand stores. On Internet, the competitor’s brand is a click away. The customer cannot have a user experience.
Luxury brands play to stimulate the sales, because the products have no price. Digital, for its part, is a channel “rational”, often linked with a bargain.
But digitalization is changing our world…
However, nowadays, we live in a world where digital is becoming really important. Keeping luxury brand heritage is not by maintaining exclusivity through another approach.
For example, thanks to the Internet, you can engage easier your consumers and create private member group to keep them loyal to the brand. When consumers purchase a luxury item, the brand can deliver it in a wonderful box with loyalty perks in order to keep this user experience. Brands also create concierge services for a more prestigious delivery service.
Consumers increasingly use social media to be informed about fashion and about trends. Social networks such as Facebook or Instagram play an important role in the search for information. For example, bloggers have accounts on Instagram and post their recent purchases. Others Instagram users can follow these bloggers in order to make their choices easier.
According to a study conducted by Dimensional Research* in 2013, before buying 90% customers will make a decision influenced by social media with reviews. This shows the importance of a unified multi-channel shopping experience. Most of consumers know what they want before buying a good. They had some feedbacks from other consumers who bought the same product and they can decide if they want to buy it or not (e.g. with Instagram).
During our lectures, we had the chance to meet Mr De Marie from Datawords*. Datawords is a web agency working on projects for luxury brand. The agency helps leading fashion and luxury brands to reach their local final customers using e-Multiculturalism. Mr De Marie spoke about some projects he was working on, and told us that when they do digital for luxury brands, the objective is to respect brand international identity.
The digital is part of marketing and mostly luxury brands are using it as firing tool of their marketing activities. Thus, recently at the launch of its latest gloss, Dior was first supported on Facebook, Twitter and on enabling international bloggers. The digital also aims to implement the brand platform by multiplying the contents to enrich the brand; Christopher Bailey, Burberry CEO’s, recently told the Guardian that Burberry became a registered manufacturer as much content as clothing.
To conclude our article, we are going to talk about Burberry, which is a luxury brand that integrated digital in its strategy. Thanks to Grenoble Ecole de Management, we had the chance to be invited to an event in Burberry flagship in Paris. We met the director and he spoke us about the evolution of digital into the brand. Burberry has been one of the first luxury brands to become digital. They created their Facebook Page in 2009, and they were the first to create an account. Salespeople at Burberry also use iPads in case a customer wants to customize an item, it is possible to order it and come back to pick it up. Also with the iPad if the customer wants to customise its article, he can do it with the iPad and receive it few days later.
With this demonstration and this real example, we can observe that Digital is about technology but it is also about engaging people and creating emotions. This is key for a luxury brand. The challenge for this industry is to use digital technology without compromising the core values.