Recent research has highlighted issues suggesting that Internet and Luxury would be incompatible. It argues that luxury goods have nothing to do online as they are not suitable to the online environment. Others have tried to demonstrate that the Web is exclusively a communication tool and that luxury brands would make a mistake if they decided to go online to sell their products. Most papers thus present Internet as a dilemma or as a tool which stands both as a threat and an opportunity for luxury brands.
The question of how to implement successful digital strategies, however, remains largely unexplored. First, this research aims at filling this gap by giving a broad understanding on how luxury brands should behave online to avoid damaging their brand value. As Internet is today fully integrated into our daily lives, it has become an unavoidable branding tool that luxury companies cannot ignore anymore and must even learn to master in order to become successful online. Second, this paper highlights the necessity of having an integrated approach of all Internet tools because the institutional website, social media and e-commerce all participate in the construction of a brand’s online equity. It also highlights the fact that each medium has different audiences and different characteristics, meaning that all media are not able to broadcast the same messages. Yet, this research suggests that all channels should be orchestrated in such a way that they transmit a uniform brand perception, meaning not only that online equity should be in line with offline equity but also that there should be no manifest distinction between them two. Third, this paper aims at showing that the Web can be an appropriate tool both for communicating with Internet users interested in a brand and for selling goods to potential and existing luxury goods customers who have an appetite for e-commerce. Last, this research demonstrates that taking into account the user’s needs is an essential parameter to build a successful digital strategy: it is only by combining a coherent brand image throughout all channels with a qualitative user experience that luxury brands will achieve online efficiency.
Table of Contents
Introduction
1. Luxury and Internet: from paradox to opportunity
1.1 Definitions
1.1.1 Luxury
1.1.2 Luxury good
1.1.3 Luxury brand
1.1.4 Branding luxury products
1.1.5 Internet and digital communication
1.2 Luxury and Internet
1.2.1 Two worlds in apparent opposition
1.2.2 Going online: an unavoidable market trend
1.3 Online Branding: a real opportunity for luxury brands
1.3.1 A powerful communication channel
1.3.2 An interactive tool
1.3.3 A means to reinforce the brand’s core values
1.3.4 Uses and Gratification Approach – Maximizing the Value of Media Usage
2. The institutional website: from brand identity to user experience
2.1 Building the brand’s e-equity on the institutional website
2.2 To each brand image its website strategy
2.3 Institutional websites aim at increasing brand desirability
2.4 Assessing the performance of an institutional website…
2.4.1 … from the brand’s perspective
2.4.2 … from a user’s perspective
2.4.3 An unsolvable dichotomy?
2.5 Characteristics of an efficient luxury website
3. Are social media allies for luxury brands?
3.1 Overview
3.1.1 The rise of social media
3.1.2 Typology
3.2 Virtual brand and anti-brand communities: from audience to potential allies
3.3 Generating positive feedbacks online
3.4 Social media, consumer’s perception and purchase intentions
4. The e-commerce dilemma
4.1 Luxury retail and brand experience
4.2 Luxury products and e-commerce
4.2.1 Are luxury goods adapted to online selling?
4.2.2 Recreating a qualitative shopping experience online is difficult
4.2.3 The ROPO phenomenon
4.3 How can luxury brands capitalize on the appetite of existing and potential customers for e-commerce?
4.3.1 The potential of e-commerce
4.3.2 Luxury e-commerce clients consume all kinds of goods online
4.3.3 Enhancing the customer’s online shopping experience
Research Objectives and Core Themes
This paper aims to explore the compatibility and strategic synergy between the luxury industry and the digital world, specifically investigating how luxury brands can effectively utilize the Internet to bolster brand equity without compromising their exclusivity. The research addresses the paradox between the democratic nature of the web and the elitist nature of luxury, proposing integrated strategies that leverage websites, social media, and e-commerce to align online presence with core brand values.
- The evolution of the "paradox" between luxury exclusivity and digital accessibility.
- Strategic optimization of institutional websites for user experience and brand desirability.
- The dual role of social media as both a branding challenge and a potential source of brand advocates.
- Navigating the e-commerce dilemma to enhance customer value without diluting brand perception.
Excerpt from the Book
1.2.1 Two worlds in apparent opposition
Internet’s central features are at first sight the total opposite of the core values that the luxury industry tries to convey. Indeed, as seen previously, Internet is a mass medium which is available to anyone from anywhere and at any time. On the web, all products and services are at global reach, being only one click away from each other, thus having a very low switching cost. Potential customers have no physical contact with the goods they are looking at, nor are they in contact with salespeople who could advise them in their purchases. Sales are thus much less powerful as it is not difficult to say “No!” to a computer or to switch to the website of a competitor. Being also the realm of price comparison and impersonal service, Internet used to be judged as an ill-adapted tool to communicating and selling luxury goods.
The principles of democracy and accessibility that are the DNA of the Internet are contrary to the core characteristics of luxury which are exclusivity and rarity. Being a mass medium, Internet has a mass consumer base which is very far away from the niche consumer base that luxury brands have always tried to target. Moreover, luxury goods are regarded as sensory in nature. Because all human senses are required to sell them, it might be very difficult to digitalize the sales. Another issue is linked to the lack of personalized service that one can find online. Luxury brands have always been really proud of the level of service offered in their physical retail outlets. Good clients usually have a dedicated sales associate who knows their tastes and the history of their purchases, thus being able to give advice on the new collections, showing the client only products that he or she might like. The store atmosphere, which is also central as it aims at enabling clients to feel comfortable while buying a luxury product, may also be difficult to reproduce online.
Summary of Chapters
1. Luxury and Internet: from paradox to opportunity: This chapter defines core concepts of luxury and digital communication, exploring the initial perceived incompatibility between the two worlds and shifting towards an understanding of the web as a strategic opportunity.
2. The institutional website: from brand identity to user experience: This chapter examines the role of corporate websites in building brand equity, emphasizing the importance of user experience and the AIPD model in reconciling brand identity with digital engagement.
3. Are social media allies for luxury brands?: This chapter investigates the impact of social media on luxury brand management, analyzing the transition from viewing virtual communities as threats to embracing them as potential brand allies.
4. The e-commerce dilemma: This chapter addresses the challenges of selling luxury online, examining the compatibility of e-commerce with luxury retail and outlining strategies to leverage online platforms for convenience without harming the brand image.
Keywords
Digital Marketing, Luxury Goods, Customer Experience, Branding, E-Commerce, Digital Strategy, Brand Equity, Social Media, User Experience, Luxury Retail, Online Communication, Brand Desirability, Consumer Behavior, Web 2.0, Exclusivity.
Frequently Asked Questions
What is the central research question of this study?
The work seeks to answer whether the digital world represents a true "Eldorado" or market opportunity for luxury brands, given the apparent contradiction between the Internet's accessibility and luxury's inherent exclusivity.
What are the primary thematic areas covered in this thesis?
The research focuses on three major levers: the role of institutional websites, the impact of social media, and the challenges of integrating e-commerce into the luxury business model.
What specific scientific approach does the author use?
The methodology is primarily inductive, deriving general propositions from the study of multiple luxury brands combined with qualitative academic research, rather than relying solely on quantitative data.
How does the work address the conflict between online and offline brand presence?
It advocates for an integrated strategy where digital channels (websites, social media) are treated as extensions of the brand that must remain consistent with offline values to avoid eroding brand equity.
What does the author conclude regarding e-commerce for luxury brands?
The author argues that while luxury and e-commerce may seem incompatible at first, they can become an asset if the e-commerce function is mastered, the right target customers are reached, and the user experience is kept qualitative.
Which key concepts characterize the digital strategy for luxury?
Key concepts include brand e-equity, user-oriented design, interactivity, storytelling, and the necessity of tailoring digital approaches to the unique history and values of each individual brand.
What is the AIPD model mentioned in the second chapter?
The AIPD model stands for Attraction, Information, Position, and Delivery. It is used to assess the performance of institutional websites and highlight the differences in expectations between brands and users.
What is the significance of the "ROPO" phenomenon for luxury?
ROPO stands for "Research Online and Purchase Offline." It describes a trend where luxury consumers use digital channels for cognitive research and information gathering but prefer traditional physical retail for the final transaction.
How does the author characterize the role of social media influencers?
Influential bloggers are seen as powerful entities that can significantly impact a brand's perception; therefore, luxury brands should maintain privileged, long-term relationships with them as part of their public relations efforts.
- Quote paper
- Clémentine Cailléret (Author), 2013, Is the Digital World a real Eldorado for Luxury Brands?, Munich, GRIN Verlag, https://www.grin.com/document/262829
