Luxury Brands Stumble Online
Luxury marketers pretty much sat out the dot-com boom, the following bust and the period since then for a variety of reasons. Many, according to a piece on AdAge.com, did so because staying offline kept their mystique and exclusivity alive. All that seemed to be working pretty well until the recession hit and many consumers said the heck with mystique; just give me a great price.
According to a study of 109 luxury items in 11 product categories by NYU’s Stern School of Business, the number of upscale brands that had a presence online jumped from 33 percent last year to 66 percent today.
Scott Galloway, an associate professor of marketing at the school, told Ad Age, "It was fine when revenues were growing 11 percent a year. And then everything changed. They’ve woken up and said, ‘Last holiday season sales were down 34 percent but traffic to our website was up 61 percent.’ Brands are innovating out of necessity."
Many luxury brands are still trying to match the sophistication of their digital efforts with that of their products. Missteps have been common along the way. That is changing, however, and a number of brands are demonstrating the power of online and mobile marketing to improve the customer experience and support sales. Cases in point include:
- BMW sending text messages to remind owners about service needs.
- Estee Lauder has developed a makeover widget to show consumers how they will look using its beauty products.
- Apple and Sony have used search, video and user-created content for a more meaningful experience online.
Discussion Questions: Do luxury brands have special considerations communicating with consumers and/or selling online? Are there specific luxury brands and/or retailers that have established models in websites, social media, search, mobile marketing, etc. that are worthy of emulation?