Faulty assumptions in luxury marketing

  MoMA – New York 
  Originally uploaded by Pete Kim.

Are you a luxury shopper?  I first gained insight into this world
working at PUMA, supporting our collaborations with Christy Turlington,
Neil Barrett, and Philippe Starck.  One time I walked into a business
meeting in Tokyo and was mistaken for Mihara Yasuhiro
(long story).  As global head of online marketing, I was responsible
for bringing these partnerships to life online.  Unlike competing with
the massive budgets of Nike and adidas, it was easy to crush the
competition here – most luxury brands weren’t paying much attention to
their web sites.  For example, the Prada site was simply a logo and
small picture for years.  (If anyone complained about one of my sites, I could always say "at least it’s better than Prada.")

Working to market these designers revealed a disconnect to me.
Luxury goods consumers have more money to spend on goods than most –
e.g. they are the ones who first owned the Nokia 8800,
remodeled into a Bulthaup kitchen, bought Bugaboos before they
deflected falling masonry, etc.  But the marketing tactics used to
reach these consumers are resoundingly old-school.  Luxury marketers
are often synonymous with their consumer, spending a lot of time online
and owning the latest technology – but tend to ignore these facts when
deciding where and how to spend their marketing dollars.

I was at the Luxury Interactive Summit last year
and this existence of this disconnect was constantly reaffirmed by the
luxury marketers I met.  Whether it was watches, cosmetics,
automobiles, or apparel, many marketers were frustrated that their
brands’ management refused to invest in their websites and simple
digital marketing campaigns.

Assuming that digital doesn’t fit into the marketing mix for a
luxury brand is a bad idea.  Yet new research from a Forrester
colleague Victoria Bracewell Lewis in London shows that many luxury retailers are still skeptical about digital.  Today’s FT runs a story that includes data from Victoria’s latest research
drawn from a survey of 178 luxury executives and interviews with 20
brands including Emporio Armani, Harrods, and Louis Vuitton.  43% of
respondents doubt that more of their products will be sold online than
in store 10 years from now.  Only 22% of those not selling online (2/3
of the sector) plan on launching e-commerce next year.  I mean, people
are buying big ticket items like diamonds and cars online.  Right now.  Why would someone not want to buy your silk scarf as well?

My favorite quote from the FT piece:  "Finally, e-commerce aside, few luxury companies grasp what may one day
prove to be the greatest of the web’s benefits – the opportunity to
interact with and listen to customers. This shows how far the industry
has drifted from a consumer-centric point of view."

That’s what I’ll be speaking about
at this year’s Luxury Interactive summit – the intersection of social
media and luxury brands.  Because the smart marketers are the ones who
realize luxury always was and always will be about the relationships –
the tools have evolved and our marketing strategy needs to get
contemporary as well.

If you’ll be around the event and want to catch up in person, let me know!