Avoiding the digital luxury Trash-Trap

I had a really enjoyable conversation recently with a luxury brand team. The topic was broadly what the role of digital could be in this elevated space.

I had read a number of interesting sources as preparation, and one of them intrigued me and set up my key contention. Check out p10 of this deck from Publicis on digital and luxury. Among other things, the deck asserts that Gucci, due to its large Facebook following, has “454,328 potential customers”.

This strikes me as a dangerous strategic leap to make, and a potentially self-defeating strategy for the brand. Fast-forward to 2013, and Gucci has 10m Facebook fans!

Look at it like this: does Gucci really have 10 million potential customers, or 10 million people very likely to buy a knock-off watch made in Hong Kong?

My point was made quite by chance when I came across a brand whose reach into social media appears quite comparable – look!

Spot the difference...

 

The obvious retort to this is that Gucci is no longer a luxury brand. And this may be fair – there is plenty of evidence that Gucci has to some extent gone the way of Taco Bell in its product as well as its brand.

But the problem with digital that all luxury brands must address is the inherent conflict between the democratizing nature of the internet, and social media in particular, and the need to remain both desirable and exclusive. A brand at a certain level must remain, to most people, just out of reach, while still attracting enough people to grow.

The quest in acquisition, perhaps, is for the right kind of people.

 

Once you have a good high-value audience captured, you of course need to retain them. My neighbor in Toronto is a Porsche dealer, and apparently they have little problem in this area, but it’s not that easy in every sector of luxury.

Thinking on this reminded me of a concept I’d first discussed with the excellent James Dunne (no relation) of Target McConnells in Dublin, whose contention was that by creating a segregated and elite membership club within a brand that is hard to enter, you can reward its key adherents.

A good planner never lets a good idea go to waste! But my build on the idea, and why it works for luxury from a brand perspective, is that by pulling the best of its brand essence back behind a virtual ‘velvet curtain’, you can avoid the need to engage with the huge numbers of consumers who can never truly aspire to be a customer – while avoiding the ‘chav-appropriation’ that so damaged Burberry around 2005. But better still, you can also benefit from the ‘leaks’ – the stolen glances through the VIP curtain that happen to (or are allowed to) leak out.

You cannot create mystique and exclusivity by just putting yourself out there. While digital is a great leveler in our society, basic rules of supply and demand are still in place.

Rarity makes a product more desirable, and avoids the risk of commoditization. For brands whose ambitions are (or should be) to find and engage with consumers whose refined taste matches their own.

Then budgets are likely best spent developing unique brand experiences for just the highest tier of consumers in an ownable space that less elite brands could never dream of entering.

Digital has a great role to play in defining this next generation of high-end value proposition, and of course, in communicating it to its intended audience.

Author, Tim Dunn.
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I'm Director of Mobile at Roundarch Isobar. While I've specialised in mobile for over 13 years, I now work across broad digital marketing strategy, and am interested in interactions, UX, media and marketing theory, and innovation of almost any description. Click About Me for more and info and what this blog is about. Follow me on Twitter @timmcdunn or connect on LinkedIn

4 Comments.
  1. Matt Bowden says:

    Interesting that you mention Burberry. I think they are doing some of the most innovative digital in-store stuff I’ve seen and seem to have recovered from the “chav” tag by swapping Daniella Westbrook for Hermione Granger.

    • tim dunn says:

      Ya – they’ve done a spectacular job since then – but that chav thing nearly killed them back in the day!

  2. nimi says:

    Timbo Dunn – for once I whole heartedly agree with you. love this piece dude.

    • tim dunn says:

      Thanks Nimi – sorry I didn’t see this comment earlier! Next opportunity I get I am going to broef it like this. but you need a certain type of creative (ie probably not with an ATL background) to get it…

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