Back to the Future - Luxury embracing the Digital Age

How do you keep producing “classics” year after year? How do you remain authentic yet contemporary? How can you create an exclusive boutique where millions can shop? The relationship between past and future has never been easy for luxury brands, but for some, digital has made it seemingly impossible. Attitudes to online vary from revulsion to trepidation and a sense these channels are contrary to the spirit of the industry; luxury is exclusive and scarce whereas digital media is inclusive and shareable.

Using these new platforms can dilute brands quicker than you can say “add to cart”. But these technologies are shaping customers’ behavior rather than responding to it, bringing continuous and exponential change. The successful luxury brands of the future are those which can embrace digital without undermining what defines them. The debate on how to do this has been over simplified. Prevailing logic holds that time spent shopping and browsing online is rising and so are luxury sales, ergo luxury brands should do more on digital. But this fails to address the legitimate concerns of the industry, unhelpfully painting it as led by dinosaurs who fail to keep up with their connected audiences.

Working with many leading luxury brands across Asia Pacific, we see the challenge is no longer whether they do digital, but how they do digital. As the first few luxury brands have begun some truly innovative work online, we can see there is in fact no inherent conflict between luxury and digital – it turns out “.com” is not short for “.common”, download is not a synonym for low brow and cookies are not childish. The problem lies in the way luxury has been defined in the debate.

Luxury brands constantly communicate they are about excellence and experience, yet their arguments against digital have taken a different form. Suddenly luxury becomes a numbers game, one where greater participation alone undermines the brand. However, scarcity is only one feature of what it means to be luxury – and one that applies more to the product than to the whole brand. Luxury communications and experiences, although tightly controlled, must never be as rare as the products or they could not foster aspiration among potential customers. To define luxury purely quantitatively is reductionist and limiting. Luxury is more about creating a superior brand experience based on excellence and authenticity. By retaining this imperative, online brands have created premium digital touch-points and a unique experience that adds real value. Once upon a time this was far harder, but we have come a long way from the early world of anarchic social media and deceitful internet traders (remember how much anyone trusted early versions of Myspace or eBay?) and luxury brands can benefit from this as much as their consumers. Some of the usual rules of engagement, especially in the social space, do not apply to luxury brands in the same way. The focus is more on exceptional content than constant conversation. Personalised correspondence is favoured over public responses and quality content over constant updates.

In the best examples, every blog post, e-newsletter and tweet should embody the brand’s values, elevating it above online voices clamouring for “likes” and page views. This fierce competition on new platforms has left brands in a different position today; simultaneously more and less famous than they have ever been. More consumers listen to them, but they listen less intently.

The brand has changed from a rock star to a party host. Previously everyone arrived to hear the same show from them, but online things are more like a party with lots of difficult friends and family members. On some tables they are speaking Facebook, others Sina Weibo. The host must circulate and be witty and charming, but also relevant in a different way to each of them. With digital there is an opportunity, some might say an obligation, to tailor the conversations across different platforms without diluting the brand’s singular essence. Fortunately for brands taking the leap, there is no need to be everywhere with digital. Each platform can be carefully assessed on its audience and merits, as there are diminishing returns for each additional social presence. Content and goals start to be duplicated and ROI suffers when platforms are used for the sake of it.

Those who set their KPIs first can avoid this and be more selective. If their goal is reach, then video content may travel further than Twitter conversations that create deeper but less widespread engagement – it’s all about objectives. In 2012 the luxury category laid to rest the question of whether or not to go digital. As 2013 arrives, we’re excited to see how luxury brands will benefit and improve. It truly is a turning point, as luxury embraces the challenge of defining itself in the digital age and beyond.

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