Three Minds On Digital Marketing @ Organic

Luxury goods is a heated topic on the web lately. First Burberry's new "Art of the Trench" campaign became a heated discussion on threeminds and last week the New York Times published two articles pointing to the allure of luxury online.

One discusses how luxury goods retailers are reducing inventories and discounts and are still selling through a variety of high priced items. An example is given: you want that $5,000 Brioni jacket...well, there's just one left, so you better hurry up and get it! (It doesn't say how many were originally ordered, so that fact might not be as impressive if Saks only had two...) The article reports that retailers are wising up to the ways of the affluent; they became their own sort of bargain hunters, waiting for things to go on sale. Well, after 100 years of being in business, Saks realized that if you purchase less inventory and sell through what was purchases, you don't have the nightmare of having to continually reduce prices and then create a whole other retail outlet to get rid of what you over-purchased.

Luxury Shouldn't Be Abundant
In other words, in luxury, it's better to limit supply. Who'd a thunk besides those with elementary understandings of business, microeconomics and readers of Deluxe: How Luxury Lost Its Luster?  I have to laugh at it all.

The Web is Your Friend
The second article discusses how technology, including the Internet and material technology (carbon fiber, etc.), have opened new doors for the creation, marketing and selling of luxury goods. That sports brand Oakley (I remember them from their more BMX roots) now offers a pair of $4,000 sunglasses. Gucci has half a million Facebook fans. The very fast paced dissemination of information - between fashion show and store arrival - is making the clothes' arrival seem a non-event. Consumers have already seen these fashions online via media and blogs, so there's not much surprise. Apple realizes this, and even though it's not a luxury brand in the same way Hermes is (well...maybe it is), it guards its latest offering until the last minute, unveils them in a fashion show of sorts introduced by a guy who wears mock turtlenecks, faded jeans and New Balance sneakers, and gets them into stores, usually within a month.

Promotion vs. Aspiration
I have been of two minds with regards to luxury and social media. On the one hand, any promotion is good promotion, and the fact that so many people can participate in being next to the dream is appealing. It's all about aspiration, even though many of those 500K fans probably aren't buying many Gucci products.

On the other hand, there is still something to the exclusivity of knowing, and this still exists in youth culture: witness the limited edition sneaker business, a mass business that masquerades as being really exclusive. The dynamic is pretty simple: Jake knows which blog to look at to find out where and when Reebok is releasing those 100 limited edition Michael Chang Reebok tennis shoes made out of tennis ball material. Not everyone knows where to look for this information, and that gives Jake (and Reebok) quite a bit of cache. When everyone knows what a brand is up to, the knowledge becomes mass, and I have to think that "mass knowledge" diminishes the luster of luxury brands to some degree. I think this is pretty interesting, because the psychology is not strictly for the ultra affluent; people of all demographics are caught in its allure.

With all this, I'm not sure what the solution is. I think it's pretty cool that millions of people can know what a luxury brand is up to, even if it's still out of reach. That's part of the allure of luxury brands. I obviously feel that luxury brands need to figure out a way to shorten development and distribution cycles, so that what is on the runway can hit retail much more quickly. I also feel that there is an incredible opportunity to use digital to test the waters. What are consumers most responding to?  What's not working?

If you can figure that out, you might be able to assess demand and NOT meet it.  After, luxury at its most basic level must keep people waiting and wanting.

Which luxury brands do you follow or buy online?

Jonathan Cohen