BrainTrust Query: Luxury Isn't Social

I think in general the answer to that question is "No" but there's more to the "No" than the article suggests.

Social media demands interaction and there is simply no market necessity for luxury brands to be interactive with a wide audience. Real luxury brands are in part defined by the fact they don't cater to, and are out of reach of, the masses who might not even recognize true luxury brand names.

In addition, today's best social media marketers embrace--or at least accept--the idea that participation in social networks requires an almost total release of control--a principle antithetical to the basic tenants of successful luxury brand building.

Ryan Mathews, Founder, ceo, Black Monk Consulting

Agree on most points. But I'm glad the ultra-affluent is such a small market segment. Most of us can't play in that narrow of a target, even though it would be fun!

The sweet spot for mixing luxury with the social opportunity might just be in the shopper target segment coined by Forbes Magazine as "The Henry's"--high earners, not rich yet. Very social,very design-oriented and all about lifestyle scrapbooking. It's over 20% of U.S. households and already spending against pent-up demand for goods and services across most categories.

Yes, it's a step down from true luxury. Bit it's one most of us are more than willing to take.

Anne Howe, Founder, Anne Howe Associates

I think Doug has hit the nail on the head. The surest way to kill a luxury brand would be to make it ubiquitous. A stainless-steel Rolex watch has an intrinsic value (based on its utility and materials) far far lower than its retail price. These watches sell because they are "exclusive." The brand has been very careful creating the message that a Rolex is a sign of accomplishment, of superlative performance. A Rolex is an "aspirational" object designed to remain exclusive. That, in and of itself, flies in the face of ubiquitous accessibility and social media. Perhaps luxury brands should make is easy for "commoners" (like myself) to share information about these luxury goods, but that doesn't mean the brand should get in the game itself.

Fabien Tiburce, President, Compliantia, Field Audits & Task Management

I beg to disagree. Perhaps in aggregate Social Media has been slow to catch on with luxury brands, but brands like Tory Burch, which are closely associated with the brand owner herself, are using Social Media to great benefit. And BMW has been using its own private "club" (the Owners Circle) for a very long time.

When the brand is personal, Social Media can make it even more personal. It may never be an "I spend all day reading about my Cadillac" experience, but everyone loves being part of an exclusive club.

Paula Rosenblum, Managing Partner, RSR Research

It is not a matter of opportunity. It is a matter of the definition of the brand. Doug Stephens describes it perfectly. "Luxury by definition is not inclusive, just the contrary. Luxury is not for the unwashed masses but rather for the elite. In fact, many of the most successful and enduring luxury retailers are without question the most exclusive. Arguably the greatest danger faced by any luxury brand is its own ubiquity. It's not about openly sharing your purchases with friends to inspire fun but instead quietly and smugly coveting prized items to foster envy."

Several weeks ago there was a discussion about women and shoes. Surprisingly, the average price women spend on shoes was less than $100. That doesn't leave much room for Jimmy Choo, Christian Louboutin or Manolo Blahnik. The Social Media opportunity is for the marketers of the copies.

It is all about brand strategy and the brand strategy does not change for Social Media versus any other media.

Gene Detroyer, Professor, Entrepreneur, Adviser, Consultant, Independent

While I'm sure that Doug is right (he usually is) about the exclusive nature of the luxury markets, I think there are some simpler reasons why there is so little traction for SM in that particular channel. First is the demographics. Social Media is largely the world of a younger demographic. Luxury, in general, tends to go to a somewhat older demo that has accumulated the net worth to afford true luxury. This group does their social networking at the yacht and/or country club. Secondly, there is simple math. Given the price points, it is a much smaller market. Social Media is most effective when there are big numbers of participants.

Bill Emerson, President, Emerson Advisors

I agree with Doug. The social engagement models that are getting traction for the mass appeal brands/products do not fit luxury. Look for new models centered in personalization and service to emerge for this segment.

Paul R. Schottmiller, Senior Director, Global Retail and Consumer Products, Cisco Systems, Inc.

I agree with Mr. Mathews. I don't see social media as a way for brands to interact with their target market. The market is small and the media it utilizes is well known. There is no need to denigrate (which is how I would see this market reacting to the use of social media) their products by using social media.

Steve Montgomery, President, b2b Solutions, LLC

Doug makes some valid points on why the luxury market isn't using social media, however, to a degree this too will change with time.

David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates

Rolls Royce - 170k fans, Hermes - 280k fans, Michael Kors - 250k fans, I'm not sure if I define luxury different than Doug or what, but those sound like impressive numbers connecting with luxury brands on Facebook.

Any luxury brand stuck in Mad Men era thinking about "unwashed masses" mucking up their brand needs to get a wake up call. And it isn't this article's posit on social media.

The biggest danger is that the very dealers of luxury brands are throwing the billions spent on careful marketing for decades away by selling on discount. Or stuffy employees waiting like serfs on royalty.

That's why I wrote this blog and subsequent selling guide.

Bob Phibbs, President/CEO, The Retail Doctor & Associates

Widespread social media platforms like Facebook and Twitter are possibly too "democratic" for an elite audience, although luxury brands still need to maintain an active presence. In addition to personalized digital interactions like text messages and email, luxury brands should also look at building their own restricted-access social networks for preferred customers. Ironically, broadline retail Sears has been very active in trying to build proprietary social networking features for the masses in recent years with limited success, luxury retailers should look at what Sears has done and modify it to fit their own customers.

Dan Berthiaume, Editor, Independent consultant

Actually, many luxury brands have "fans" on Facebook, and are the subject of countless blogs, tweets, and posts through out electronic social media. However, luxury (as noted in previous comments) is exclusive--and from a shopping experience is high touch and tactile. Neither of which can be conveyed through social media. Further, luxury products are high ticket items, and even veteran consumers of luxury goods, want to be sure that items they purchase are "just right" which also make them less likely to buy online. So, luxury can be social even if not for the masses, as embodied in one high end watch maker's tag line, "Very famous among a select few"....

Mark Baum, Partner, MARCAT Group LLC

To Bob Phibbs' point I don't think the issue is not how many of the people "like" luxury brands but rather how many luxury brands "like" the people.

Of course, as several have pointed out it all depends on how you define luxury. You can buy Michael Korrs' clothing at Marshall's but it's part to get a good deal on a Rolex Oyster there.

Again, for me, the question comes down to effective interactivity. You don't need to be an intellectual refugee from Mad Men to understand that more people like the idea of owning a yacht or private jet than will ever be in the market for one.

The most critical part of marketing is understanding who your market is--and isn't. Sol Price used to talk about "the intelligent loss of business"--i.e., who you shouldn't make your offerings available to as a cornerstone of business growth. The principle holds as true on the high end as it does on the low.

Ryan Mathews, Founder, ceo, Black Monk Consulting

Doug is correct: Luxury brand marketers in fact solidly understand the role of social media, and choose to not embrace it as have mass brands for the very fact that becoming widely inclusive goes against a deeply entrenched legacy of being exclusive.

This sentiment appears to be shared among this group, as nearly 60% feel there is less to much less opportunity for luxury brands in engaging via social media. The exceptions may be younger luxury brands such as Tory Burch who explore social media without diluting decades of heritage built on very discrete and carefully designed interactions with their customer base.

Jeff Hall, President, Second To None, Inc.

Social media + luxury brands = oxymoron.

Mel Kleiman, President, Humetrics

Nice discussion all...When we looked at the question of luxury a bit ago, we included exclusivity as one of its core traits...but also included superfluity: luxury products/services are non-essential or at least have nonessential features...Luxury adds a measure of comfort, convenience, performance, etc, over and above what is needed. (Do you really need 500hp car?) So, adding this component rounds out the definition a bit.

Overall, I guess I'd argue that the social aspect of luxury is going to become more and more important--as luxury is redefined in the coming decade. I don't think the luxury of the future is the $1,800 handbag--because anybody who saves up the cash can get one and if you want another there's going to be one waiting for you at the mall...(that doesn't feel very exclusive to me).

This will play in some societies where consumerism is newer and people are in "acquisition mode"--but in the US and Europe, post-modern values will redefine luxury. It will increasingly be focused on what's rare in consumer societies: experiences (not stuff), craftsmanship (not disposable), personalization (not mass produced), relationship (with producers).

Maybe the future of luxury will take a page from the past--e.g., the patron/artist relationship of the medieval and Renaissance times. The online platform has already emerged with sites like Etsy.com--and this kind of personal, 1:1 commerce would lend itself very well to social media.

Chris Carbone, Director, Innovaro, Inc.

Luxury on social media may not be quite that easy to categorize.

First, there are luxury brands that are embracing social media. As marketers it may be more important to differentiate between luxury brands, affluent consumers and the aspirational customers who are buying luxury products.

Christopher P. Ramey, President, Affluent Insights

Luxury brands have been utilizing social networks from the very beginning, I would not qualify the move to social media as slow, or late in embracing social media. Rather, the exclusivity of luxury doesn't call for an aggressive move to social media.

The aforementioned doesn't mean social media is not appropriate for luxury brands. All brands determine consumer environments and the opportunity to communicate and engage the appropriate target. There are a myriad of factors ranging from efficiency to brand attributes that would keep a luxury brand from engaging or avoiding social media.

Carlos Arámbula, Managing Partner, Arámbula-Phillips Communications, Inc.

Social media is a place for every brand. How every brand uses it--whether it is a mass market or luxury brand--is different. Not even all mass market brands should be using social media in the same way.

To discard this form of connecting with 'your' customer is a mistake. To connect with 'your' customer effectively with this form of media is the greater challenge, whether it be a mass merchant or luxury merchant.

Mere presence, having fans, 'likes', etc, is not an effective form of measurement of the effectiveness of its utilization. Many are in it. Few in it are using it effectively--luxury or otherwise. Many are creating noise. Few are creating real effective connections. Most are just becoming another form of nuisance in our daily lives.

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Luxury brands don't need it. The best part about being a luxury brand is that MOST people can't afford you. That's what it's all about. Just tell anyone they can't have something and they immediately want it. Social Media might best be reserved to selling fakes of luxury brands. Another benefit of a luxury brand is that those who can't afford the brand typically aren't found in the show room. Therefore, luxury buyers aren't subjected to a Walmart experience.

Ed Dennis, president, Dennis Enterprises

It seems like some of the supply-demand dynamics have been neglected a little here. Surely luxury brands can still manage the supply side of the equation even if the demand side is being raised by effective marketing across traditional and new channels? Can't they translate the increased demand this drives into value (e.g. margin), and even greater brand engagement?

Matthew Keylock, Senior Vice President, New Business Development and Partnerships, dunnhumbyUSA

Whether social media and luxury brands mix depends on your expectation for the the way social media tools would be implemented in this segment.

If we define the term to mean open participation in a social network and lots of "in the moment" interaction, then I agree that execution of "social media" may not be as we commonly think about it.

If however we think about forming community and creating an environment that encourages conversation, opinion, review, referral and recommendation, then social media is a winner.

I just sat with Kiwi Collection, a luxury hotel destination site as they talked about building a socially based community that thrived on referral and recommendation.

Bill Hanifin, Managing Director, Hanifin Loyalty LLC