Destination Emmett: Healthy Social Marketing (Planet Pickett Collection) presents:
ARE YOU REACHING RICHISTAN? How To Go Online Without Going Downscale…
Adweek has published a detailed article: Is Digital Killing The Luxury Brand? Some important highlights and insights to your bottom line benefit(s):
- Data from management consulting firm L.E.K. Consulting shows that those earning more than $150,000 are the only people spending more than they did before the so-called Great Recession — signs of which first appeared in 2007, now well into its fourth year! The broad American middle class as “aspirational consumers” are largely disappearing. Sales at WalMart are even down!
(The respected Albert Qian at AQ Quality Group, who is developing the AQQ indicator “beyond Klout scores,” and Destination Emmett (Planet Pickett Collection) have often discussed the urgent needs in this economy for businesses to better identify — and deploy (often by changing their) “intrinsic brand value(s)” through experiential and destination marketing of consumer empowerment through customer care “beyond 0s and 1s” alone, yet (not paradoxically) embracing both the clicks and the bricks.)
- High-end fashion brands have a problem. Let’s call it the “Kreayshawn quandary,” after the young Bay Area rapper made famous by the Internet and her hit song “Gucci, Gucci,” which has gotten over 16 million views on YouTube. Sample lyrics: “Gucci, Gucci, Louis, Louis, Fendi, Fendi, Prada…the basic b***ches wear that shit so I don’t even bother.”
- It may have taken a rapper to say it “in your face,” but the message has been clear for a while: Luxury designers are losing their cachet. And the problem is only being intensified by the medium that made Kreayshawn a star.
- Digital isn’t as easy to do as some brands would like to think. And if the brands do it badly, digital can backfire on them, further eroding an aura of exclusivity that could define them for generations.
- The reasons for going online are, as most other industries already know, compelling. Eighty percent of people with an income of over $250,000 are social media users according to Unity Marketing research, and 50 percent have used social media to learn more about a brand or see new products.
- From a revenue standpoint, it makes perfect sense. Many luxe fashion brands have huge beauty and accessories businesses, and make their real money not from couture but from shoes, handbags, jewelry, makeup, and so on. And what better place to advertise and sell a $23 nail polish than online?
- Demi Moore tweeted a picture of herself wearing a dress from Prabal Gurung’s first collection; her husband Ashton Kutcher retweeted it, and Gurung immediately had 500 followers (he now has 31,000). “I said, ‘Here’s the power,’” Gurung remembers.
- Anytime a brand’s “personality” is perceived to have changed for the worse, it’s quickly reflected in sales. This category, almost more than any other, targets a specific audience.
“We see brands fight over the number of friends on Facebook and judge their initiatives based on number of ‘likes,’ but who are those friends?” asks Ferdinando Verderi, creative director at WPP’s Johannes Leonardo, an agency whose clients include Chanel. “Are those people luxury brands ever wanted to talk to?”
Image still counts, and some companies aren’t navigating their dive into digital as carefully as they should be.
- The solution is to make brands live the same luxe life digitally that they do in print or on billboards. For example, Chanel pulled off a sensational runway show for the jet set in Saint Tropez, which it streamed online at French social media fashion site Ykone. Exclusive? Mais Oui! Most watching online could only dream of arriving at a French beach town (or anywhere else, really) in a speedboat while dressed head to toe in expensive ready-to-wear clothes, as the models did. It’s the rarefied world of Chanel, brought to you by the rarefied world of Chanel.
- James Gardner, CEO of CreateTheGroup, says “Give consumers special privileges.” Burberry, he points out (a client), does this by giving inside access like its own live stream of its fashion show that will let consumers “sit” in the front row.
Other brands are also realizing the Web can actually help them maintain control over discounting and the dissemination of their product and look, which is why an increasing number of luxury fashion websites are pumping up their e-commerce and mobile offerings. Oscar de la Renta, for one, built exclusivity right into its website with its Backstage Pass, a members-only shopping destination that offers one-off items, private sales, and a boutique “curated” by guest editors.
“The luxury consumer really yearns to have this privileged access,” says Gardner. “They want to be there first, get it first, get something different than the (perceived) masses. It’s a combination of being invited and rewarding customers, which I think is important.”
- Social media can disseminate the information, but there are still only an elite few who can afford the high-end goods.
Derek Lam learned this, ironically, when it partnered with eBay earlier this year to create a less-expensive line that was actually crowdsourced: Users were given a selection of different garments and voted on which ones would be produced. Derek Lam’s CEO, Jan Schlottmann, says it was an experiment to see “how we can use the immense traffic and technology of eBay to find out more about our consumer.” Traffic to the company’s website increased, Schlottmann says, and e-commerce sales doubled. But those sales still only made up 1.5 percent of the company’s total—and most of those sales were of discounted items or accessories. “It’s still a harder sell to sell a $1,500 dress online,” says Schlottmann.
- If brands’ websites and social net offerings are geared toward less-expensive lines, is this hurting their exclusive images? If they don’t decide soon, the people—the bloggers, the tweeters—will decide for them. The important thing is for brands to make clear, “doable” decisions on precisely on whom to focus. To paraphrase another rapper, Theophilus London, “The clothes don’t make the man (or woman); it’s the (woman or) man that makes the clothes.”