Luxury in the Digital Era

Emma Aikens

Professional Thesis Institut Supérieur de Gestion

MBA Luxury Mindset Management

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TABLE OF CONTENTS

Abstract ...................................................................................................3

Acknowledgments .................................................................................. 4 Introduction............................................................................................. 5 Literature Review.................................................................................... 7

Luxury Through the Lens of Sociology ............................................................................ 7 Democratization of Luxury in the Digital Era ................................................................. 10 Luxury Consumer Behaviour........................................................................................... 14 “See Now, Buy Now” ........................................................................................................ 16 Measuring the Effectiveness of Digital Communication............................................... 18

Insight Through Interviews..................................................................20 Analysis, Observations and Recommendations ............................... 30

On the Democratization and Desirability of Luxury ...................................................... 30 On Luxury Consumer Behaviour in the Digital Era ....................................................... 33 On Luxury Brands that Opt Out of Digital ...................................................................... 36 On “See Now, Buy Now” .................................................................................................. 37 On Measuring Success and Effectiveness..................................................................... 39

Conclusion ............................................................................................ 41 Bibliography.......................................................................................... 46 Annex.....................................................................................................49

Interview Notes: Valentina Busi ..................................................................................... 50 Interview Notes: Alicia Casado........................................................................................ 51 Interview Notes: Marine Chapuis .................................................................................... 53 Meeting Notes: Eva Chen................................................................................................. 58 Email Interview: Laura Cohen.......................................................................................... 59 Interview Notes: Sybil Layous ......................................................................................... 61 Interview Notes: Christophe Lu....................................................................................... 67 Interview Notes: Paul Marovik ......................................................................................... 69 Interview Notes: Alex Tutuianu ....................................................................................... 70 Interview Notes: Alex Whitlock........................................................................................ 72

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ABSTRACT The rise of digital communication and social media has presented unique opportunities and challenges for the luxury industry, which for the vast majority of its history has thrived off of its exclusive, untouchable aura. Digital has not only increased the exposure of luxury brands and products to global audiences, but has also challenged the entire structure of the way the industry operates: how brands communicate, the profile of today’s luxury consumer, competition within the industry, how luxury products are sold, and even the emergence of trends.

As a whole, the industry is becoming much more democratized – a word that often goes against the “trickle-down” spirit of luxury. Many in the industry are asking: Have social media, e-commerce and other forms of digital communication gone too far? Is the rise of online culture overexposing luxury brands and jeopardizing their desirability as a result?

Digital communication has given way to a larger, more diverse population of luxury consumers. Through social media, the public has benefited from a more direct line of communication with brands. As a result, consumers are now beginning to make heavier demands on brands, which must in turn put their client back at the centre of their strategy in order to be successful in today’s market.

Due to the relative newness of social media, many of the industry’s professionals are still in the dark about how to fully measure the impact and success of online communication, particularly on a brand’s bottom line. This has contributed to luxury’s slow development of digital capabilities throughout the past years. But for luxury brands to justify allocating larger budgets to digital, a clear system of measurement must be developed within each company to meet its specific needs and capabilities. Digital is key for the future survival of the luxury industry because of its unique ability to recruit and educate younger and more diverse consumers. When luxury brands harness the power of online communication and integrate digital into all aspects of their business, they benefit not only from tighter image control, but also have the power to spread their message, vision, codes and values to larger audiences who will in turn foster higher appreciation for the industry as a whole.

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ACKNOWLEDGMENTS I would first like start by thanking my thesis advisor, Professor Sebastien Girard of the Institut Supérieur de Gestion, during the course of this project. I greatly appreciate his support, advice and guidance while researching and writing my thesis. I would also like to express my gratitude to all of the industry professionals who kindly took the time out of their busy work schedules to speak about their experiences and ideas related to digital in the luxury industry. The insight gained through the informational interviews was an essential part of responding to many of the challenges the industry is currently facing. I would like to thank Maison Margiela for sponsoring my master’s degree and allowing me the opportunity to continue my work in the House’s digital department while continuing my studies. The insight gained though my professional experience at Margiela has proven to be an invaluable source of information for my thesis. I would also like to acknowledge the various professors at the Institut Supérieur de Gestion who added perspective to this project through various courses related to the luxury and fashion industry. Lastly, I would like to give a special thanks to Mr. Chalem, Mr. Chancrin and Mrs. Ribeiro for allowing me to push up the date of my thesis defence presentation. Thank you, Emma Aikens

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INTRODUCTION Luxury has long been a superbly elusive concept. Words like rarity, exclusivity, creativity, price, craftsmanship, innovation, quality, complexity may come to mind. Others may associate luxury with a dream, a lifestyle, or a sort of celebrity status. The definition of luxury has certainly changed drastically over time, but its core remains constant: it is all things born from desire, a fanciful way to fulfil a need. In centuries past, luxury was able to maintain a rare, exclusive aura through technical limitations in accessibility and the spread of information. In the 21st century Digital Era, however, luxury products and brands have been subject to wide exposure and availability to the masses with the aid of the Internet. While the benefits of online exposure may seem clear from a business development standpoint, the very concept of mass diffusion tends to go against luxury’s traditional ethos. Given the unavoidable importance of digital communication and social media in the 21st century, how can luxury brands harness these online mediums to both build and protect brand image in the long-term while measuring their success and ultimately making a positive impact on the bottom line? To answer this question, it is important to first take a brief look at luxury’s history throughout the millenniums. The object attributed as the first known relic of luxury is considered by many to be the Venus of Brassempouy, dating from roughly 25,000 BC. Discovered in France, this small figurine carved from ivory depicts a woman wearing a type of net hair ornament and is cited as being the first known accurate representation of a human face. Beyond this fact, the Venus of Brassempouy indicates awareness of self – flattering man’s penchant for vanity – and is clearly an object not intended for utilitarian use. Luxury throughout early human history was strongly marked by rituals, ceremonies, the magical and the mystical. It was not until the “Birth of Civilization” (around 3,500 BC), when humans began to organize into concentrated communities with more strongly defined social classes, that luxury came closer to resembling what it is today. With the monetization of exchange, luxury became a privilege of the elite and a mark of power. In the Middle Ages, Sumptuary Laws were put in place throughout Europe during times of economic upheaval as means of limiting conspicuous consumption. More largely, these laws were used as a mechanism to reinforce the distinction between social classes by outlawing the display of certain garments, colours and other ornamentation strictly to the nobility.

The rise of merchants and the bourgeoisie during the Renaissance Era gave way to what can be considered as the first true luxury market. The nobility began putting a price on their long-held “privileges”, opening the opportunity to those not strictly born into the aristocracy to acquire luxury items previously designated to the top social classes. Technological advancements, including printing, aided in the spread of information, and ultimately helped to better organize the industry by aligning supply with demand.

17th century Mercantilism put importance on the transformation of raw materials into goods boasting an added value for export. Regional labels for wine, silk and crystal making were created throughout Europe (particularly in France) and

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began to be regarded as marks of excellence among luxury products around the world.

The 19th century Industrial Era harnessed the technological advancements of the time to satisfy the growing demand for luxury goods. With increasingly efficient production techniques and communication mechanisms, the luxury market was becoming more democratized than ever before. The first department stores opened, allowing free access to the general public, while early advertising campaigns helped generate traffic.

There has been a clear trend throughout history of the luxury industry becoming increasingly democratized, particularly during the Renaissance and Industrial Eras. However, there is no single phenomenon before the turn of the 21st century that has marked such a drastic change for the industry than that of the invention and rise of the Internet. Today, there are roughly 4 billion Internet users worldwide, and counting. This figure has skyrocketed since the year 2000, when only a slim number of about 414 million (6.8% of the world’s total population at the time) had access to the web. From 2000 to 2012, Internet usage per year consistently grew in the double digits. More recently, year-to-year change from 2015 to 2016 has steadied out at a cool 7.5%.1 Asia has been charted as the most prolific of Internet users, with roughly 48.4% of total worldwide usage being attributed to the continent. North and South America combined make for a grand total of 21.8% of worldwide users, followed by Europe at 19% and Africa at 9.8%. (The unfortunate “Oceana” population gets only a negligible sliver of representation in the pie chart.) A healthy 75% of all Internet users live in only 20 countries, with China, India, the US, Brazil and Japan leading the way. Internet “penetration” as a percentage of the population, however, is highest in the US, Japan, Canada and Europe with anywhere between 88% and 100% of individuals who have access to the Internet from home.2 Of course, one cannot discuss Internet usage in 2016 without addressing the phenomena of the Smartphone. Tech Crunch cites that there are roughly 2.6 billion Smartphone subscribers around the world, and predicts that this number with leap to an impressive 6.1 billion (70% of the global population) as soon as 2020, overtaking the number of fixed line Internet subscriptions.3 The source also cites that in 2014, 15% of all mobile data traffic came from social networking and indicates a steady rise in mobile social networking over the next five years. In the US alone, the average person checks their phone roughly 46 times per day, generally while shopping, watching TV, or while partaking in other leisurely activities.4 Unsurprisingly, Smartphone usage among younger users (18 to 24 years of age) jumps up to roughly 74 checks on average per day, while those between 25 – 34 and 35 – 43 hovers around 50 and 35 checks per day, respectively.

1“InternetUsers”,InternetLiveStats,http://www.internetlivestats.com/internet-users/2“InternetUsersbyRegion”,InternetLiveStats,http://www.internetlivestats.com/internet-users/3Lundun,Ingrid,“6.1BSmartphoneUsersGloballyby2020”,TechCrunch,https://techcrunch.com/2015/06/02/6-1b-smartphone-users-globally-by-2020-overtaking-basic-fixed-phone-subscriptions/4Eadicicco,“AmericansCheckTheirPhones8BillionTimesPerDay”,Time,http://time.com/4147614/smartphone-usage-us-2015/

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Internet usage has indeed shaped the way people interact with news, politics, celebrities, and of course, fashion. What was for many years a one-way dialogue between the influencers and the influenced, designers and the public, is now melding into a sporadic conversation between a plethora of actors in both fashion and society. These societal trends, however, tend to run in staunch opposition to luxury’s rare, secretive and untouchable core. No longer are luxury brands dictating trends to their clients; no longer are shows and new collections viewable exclusively by a select few. The discourse seems to be reaching new heights of continuous exchange, cross-referencing, and rapid change. For these reasons, luxury has been predictably slow in embracing digital. But in the face of an undeniable consumer and societal push, virtually all luxury brands have steadily, shakily hopped on board. Most luxury Houses have taken their own approach to the digital sphere through social media, e-commerce, website creation and working with online influencers. Given the relative newness of digital, many are still weighing the pros and cons and are questioning its impact in on long-term desirability of luxury. Have luxury brands been subject to overexposure and over-democratization? How has increased availability and visibility of luxury goods impacted consumer behaviour in the industry? How does a House know if their online communications strategy is proving effective, both for the brand’s image and the company’s bottom line?

LITERATURE REVIEW LUXURY THROUGH THE LENS OF SOCIOLOGY

Distinction, French sociologist Pierre Bourdieu’s critique of judgement of taste, traces ideas that can be closely related to the luxury industry. While the book’s primary focus centres on music and art, its core message remains the same: people seek to separate themselves from others by consuming various “cultural goods” and by partaking in certain “cultural practices”. These “cultural goods” can be simply translated into luxury goods – anything from a perfume from Guerlain to an Haute Couture dress by Valentino. “Cultural practices” can be considered everything from shopping (whether online or in physical stores) to travelling or attending social events such as charity galas.

Certain cultural goods, blessed with the “virtue of rarity”, are seen as a key distinguishing factor among societal groups. Not only must one be simply aware of such goods (a woven leather Bottega Veneta bag, for example), but also one must be equipped with the set of knowledge required to “decode” their significance. Rarity and complexity, in short, can be directly linked to desirability for its inherent identifiable nature in the eyes of a given group.

One could argue today that the availability of information via the Internet has provided the knowledge necessary for anyone to decode these rare cultural goods and practices. Bourdieu would staunchly disagree, however that “in the past, the masses did not have access to art, music, painting and even books, which were

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reserved for the rich. It might have been supposed that the poor, the ‘common people’, would have enjoyed them equally, if they had the chance. But now that everyone can read, go to museums, listen to great music, at least on the radio, the judgement of the masses about these things has become a reality and through this it has become clear that great art is not a direct sensuous pleasure. Otherwise, like cookies or cocktails, it would flatter uneducated taste as much as cultured taste.”5

Bourdieu cites that these cultural practices and cultural goods are closely related to both education and social origin. Social origin plays a particularly strong role in consumption, as one’s familiarity with select goods and practices from an early age generally creates a more casual, accustomed attitude. The more one is encouraged by his or her social environment to apply art (or luxury) consumption beyond the bounds of a formal or scholastic environment, the deeper one delves into understanding and decoding these cultural goods and practices. In short, these brands, products and habits become custom as one ages.

Delving into the aesthetic nature of art, music and fashion, Bourdieu divides taste into three different categories. “Legitimate Taste” is characterized by the classics, appreciated widely by the “self-assured aesthetes”. In fashion, this could be translated as the conservative dames of Paris’ 16th arrondissement sporting Salvatore Ferragamo pumps and tweed Chanel suits. “Middle-brow Taste”, generally marked by newer genres of art (such as cubism or jazz) that are only beginning to gain legitimacy, could be seen in the design world as the avant-garde rebel brands like Céline, Vêtements and Maison Margiela. “Popular Taste” Bourdieu critiques, is “devoid of artistic ambition” and can be linked to mass-market practices and products – like musicals, monogram Louis Vuitton tote bags and dare we say the Juicy Couture velour sweat suits that proliferated the closets of upper-crust suburbia in the early 2000’s. “Like every sort of taste, it unifies and separates”6 Bourdieu comments on one’s penchant toward a given genre, which he has dubbed “the aesthetic sense of distinction”.

While the book presents a number of sociological insights into the intimate connection between upbringing, education, cultural practices and consumption, Distinction in many ways shows its age, as Bourdieu presents a despondently narrow vision of humanity and society. In 2016, one can irrefutably argue that the divide between “those who understand and those who do not” is with time closing due to the exponentially widespread availability of information online, just at our fingertips. French sociologist Jean Baudrillard describes in his critique The System of Objects how objects – or products – obtain value in the eyes of consumers. In this work, Baudrillard outlines four processes of gaining value. The first is the object’s “functional” value, related strictly to its utilitarian purpose. A wool coat, for example, is fundamentally speaking, purchased as a way of keeping warm. The second process described is an object’s “exchange” value. This principle is strictly related to the item’s economic or monetary worth. For example, the aforementioned wool coat may be worth one third of a month’s salary or the price of five pairs of linen pants. 5Bourdieu,Pierre,Distinction,page226Bourdieu,Pierre,Distinction,page49

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The third value noted by Baudrillard is an object’s “symbolic” value. Symbolic value relates one object’s value to that of a certain subject or symbol. The wool coat, for example, may be a symbol of a self-reward for a consumer who purchased it for his or herself after a significant accomplishment at work resulting in a salary raise. A diamond ring can also be used as an example of an item with symbolic value, as it relates the link between the giver and the receiver: a sign of engagement or marital love. Lastly, Baudrillard explains the “sign” value of objects. An object’s sign value factors into the bigger picture of the overall “system of objects” in which a piece is classified as possessing a certain level of prestige in relation to other pieces. A diamond ring from Tiffany’s, for example, may have zero functional value, but a significant “sign value”, as it distinguishes the wearer from others who may be sporting a simple gold band from a nameless manufacturer. The Tiffany’s diamond ring communicates a level of prestige, which other pieces of jewellery may lack. The “sign value of objects” highlights the importance of advertising and brand communication in the luxury industry as a way of differentiating brands or products in the eyes of consumers. Baudrillard notes, “Advertising tells us, at the same time: ‘Buy this, for it is like nothing else!’… But also: ‘Buy this because everyone else is using it!’”7

The “sign value of objects” is also where Baudrillard’s theories intersect with Bourdieu’s “sense of distinction”. The wearer of a garment or a piece of jewellery has selected said piece as a way of reflecting certain social values or norms to not only differentiate themselves from others, but also to identify with a selected societal group. Lastly, one cannot discuss fashion or luxury without touching upon Maslow’s acclaimed and time-tested Hierarchy of Needs. Luxury, as described previously, can be seen as a fanciful way to fill a need. In a purely utilitarian sense, clothing fills the most basic physiological needs by providing a shied from the elements, warmth and protection. Luxury fashion generally goes beyond fundamental physiological and safety needs as it seeks to gratify the upper half of Maslow’s Hierarchy of Needs pyramid: “Love and Belonging”, “Esteem” and “Self-actualization”. “Love and belonging” needs intersect in many ways with Bourdieu’s “sense of distinction” and Baudrillard’s “sign value of objects” as they address the basic human desire to consume, act and appear in ways that make one feel part of a group. This “profound hunger for group feelings” can drive consumers to purchase, for example, an exorbitantly priced 15,000 euro Hermès handbag in order to identify with and receive gratification from a given group or class. For those who experience unsatisfied love and belonging needs, Maslow comments, “Such a person will hunger for relations with people in general – for a place in the group or family – and will strive with great intensity to achieve this goal.”8 Luxury addresses this need by providing a system of classification and addressing the inherent need for humans to both distinguish themselves from other groups while feeling like a revered member of a selected class. 7Baudrillard,Jean,SelectedWritings,“TheSystemofObjects”,Page118Maslow,AbrahamH.,MotivationandPersonality,“ATheoryofHumanMotivation”,Page20

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Respect from oneself and from others defines “Esteem” needs in Maslow’s hierarchical pyramid. “All people in our society (with a few pathological exceptions) have a need or a desire for a stable, firmly based, usually high evaluation of themselves, for self-respect or self-esteem, and for the esteem of others.”9 Additionally, Maslow describes the inherent “desire for reputation or prestige” in the eyes of their social groups. This type of recognition can include everything from “status, fame and glory, dominance, attention, importance, dignity or appreciation.” Luxury (and particularly, luxury fashion) addresses “Esteem” needs through designing a wide variety of stylistic variants, which can all fit within one accepted aesthetic of a group. “Self-actualization’ needs are described by Maslow as being satisfied only when the individual is doing what “he or she, individually, is fitted for.”10 Self-actualization spans beyond the realm of group interaction and resides primarily in one’s intrinsic and individualistic “desire for self-fulfillment”. These needs tend to vary vastly from person to person. “However,” notes Maslow, “the common feature of the needs for self-actualization is that their emergence usually rests upon some prior satisfaction of the psychological, safety, love and esteem needs.” While the link between luxury consumption and self-actualization specifically may be more elusive and vary greatly from person to person, self-actualization (as with all other needs) depends on the fulfillment of all lower needs in order to be achieved. DEMOCRATIZATION OF LUXURY IN THE DIGITAL ERA

In the words of Bourdieu, “the virtue of rarity” can be considered one of luxury’s most important assets. In the pre-digital era, brands were able to keep tighter controls over the rarity of their products via distribution and advertising. But with the rise of online communication, social media and e-commerce, luxury Houses have been met with multifaceted challenges in conserving their aura of exclusivity. With the rapid increase in the exposure of luxury brands and products to the general public via online platforms, has digital in fact overexposed luxury, thus jeopardizing its desirability?

While a rapidly increasing number of luxury brands are starting to see digital as an opportunity rather than a threat, many still view social media and other mediums of online communication as a risk to the ever-elusive aura of exclusivity these Houses fight to protect.

Digital as a medium of communication has irrefutably democratized the fashion and luxury industry. Consumers and the general public now have the opportunity to view fashion shows immediately online via live stream and social media (from brands, bloggers, fans and editors alike), in addition to a myriad of other digital platforms. The public no longer has to wait weeks – or even months – to experience new collections through the filter of fashion editors and journalists. They have been given the power to view these shows, events and collection releases 9Maslow,AbrahamH.,MotivationandPersonality,“ATheoryofHumanMotivation”,Page2110Maslow,AbrahamH.,MotivationandPersonality,“ATheoryofHumanMotivation”,Page22

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directly, and as a result, have free reign to interpret, criticize, praise and comment on a brand’s creative prowess with the entire internet as their audience, uninhibited and uninfluenced by the oftentimes biased fashion press.

This phenomena has opened a two way street: while luxury brands have a more direct line of communication with consumers via social media, consumers in turn have more immediate access to brands. The consensus on this fact is generally divided among those in the industry. But while the topic remains controversial, most can agree that even for brands with little or no online presence, social media is a force to be reckoned with: there is no stopping the conversation.

Many of the advantages of digital in the luxury world seem obvious, others more elusive. The launch of e-commerce has opened up a lucrative revenue stream for many brands, particularly those with smaller-scale retail networks. In parallel, consumers are finding it more convenient than ever to purchase products from their favourite luxury brands with never before seen facility and speed online. E-commerce is also adding an additional layer of personalization to the shopping experience with clearer visibility on merchandise availability and increasingly more options to customize products online as they are being ordered.

Social media platforms, when used in their most basic forms, are more or less free for brands. While many larger brands with high budgets dedicated to online advertising have the possibility of launching behemoth social media campaigns, the range of investment remains fairly flexible for those anywhere in the middle.

From a consumer point of view, social media has provided an inside glance into the behind-the-scenes of fashion and luxury Houses – a perspective few outside the industry were ever afforded only a decade ago. Many consider this arrangement mutually beneficial. “People are looking for narrative,” commented Eva Chen11, Instagram’s Head of Fashion Partnerships, whose job consists of enlisting and advising brands on how to “tell their stories in ever more interesting ways” via the Instagram platform.12 In a recent interview with The Telegraph, Chen reflected on how Instagram has “made the fashion world more friendly”. Despite the many who use the platform (as well as other forms of social media) as a way of keeping up with the Jonses, she cites Instagram as being the main force of fostering inclusiveness in the fashion community. There’s a sense that “the velvet ropes are coming down,” Chen commented. She attributes this phenomenon to Instagram’s sweeping popularity in the fashion community. Additionally, brands are able to feed their messages in more organic ways to consumers, who in turn, have proven eager to interact with branded, storytelling content.

In the realm of social media, there is third, very notable actor in addition to brands and consumers that has undisputedly intervened in the conversation: bloggers. From a consumer standpoint, it is often a more relatable way to interact with a brand. Bloggers are not models or celebrities; they are exceptionally stylish men and women that anyone could run into just down the block.

11AlexeiKansara,Vikram,“TheDigitalIceberg”,BusinessofFashion,http://www.businessoffashion.com/articles/fashion-tech/the-digital-iceberg-luxury-fashion-marketing12Armstrong,Lisa,“EvaChenonHowInstagramMadetheFashionWorldMoreFriendly”,TheTelegraph,http://www.telegraph.co.uk/fashion/people/eva-chen-on-how-instagram-made-the-fashion-world-more-friendly/

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Many luxury brands have harnessed bloggers’ unique influence over consumers through events, collaborations and advertising campaigns, revolutionizing traditional marketing and communication techniques, which were previously reserved for celebrities and models. Mindshare cites that “the rise of the blogging phenomenon has democratized the industry by bringing it closer to the norm. Fashion Shows which used to be exclusive are now live-streamed events, often attended by a higher number of bloggers than actual industry professionals.”13

Through the brand-blogger-consumer conversation online, trends are no longer solely dictated by a small group of editors and the fashion elite. Trends today have a much greater tendency of emerging from so-called ‘native’ sources – on the street or online. Bloggers and other online influencers undoubtedly play a strong role in trend development. With their hefty social media followings, “it-products” have the propensity to catch fire quickly across the consumer masses.

Brands, of course, have not remained ignorant to this fact. From seeding (or gifting) products to key online influencers to acutely tracking online conversations around their products, social media has proven for many to be a goldmine of opportunities and insights. Reactivity to trends developing on social media have been shown to aid brands to better align stock and distribution by helping to decide which products to produce and in which quantities.

For any brand, social media multiplies the lifespan and visibility of key events – from fashion shows to boutique openings – far beyond the restrictions of real-life timeframes, locations and traditional audiences. Chanel, for example, harnessed the 2016 Mademoiselle Privé exhibition in London to specifically target a multitude of worldwide audiences. Mademoiselle Privé charted the history and heritage of Chanel through a series of storytelling installations. With the help of social media, its scope reached beyond the local British audience to customers and fans of the brand worldwide. Initiatives like Mademoiselle Privé have proven powerful in revitalizing a brand’s consumer base while spreading awareness about its key narratives, values and aesthetic codes – three aspects that are particularly important to the luxury industry. Not only were these messages able to reach the House’s classic, loyal audience via the physical exhibition, but also the younger, less familiar digital audience via the social media campaign.

On the opposite end of the spectrum of super-power fashion Houses like Chanel, smaller brands are seeing a plethora of opportunities with the rise of digital. In the online era, young fashion brands no longer need a decades-long heritage to become relevant. From social media, to collaborations with influencers and e-commerce development, numerous fashion houses – for example, Vêtements and Jacquemus – have cropped up and caught fire more quickly than most could have imagined a decade ego, even (for Vêtements) in the ultra-exclusive realm of Parisian Couture. Social media, whether the brand’s own or that of key influencers and fashion personalities, helps spread the message simultaneously to both larger and more niche audiences, which without digital would be otherwise unattainable.

In the face of digital’s vaunting list of benefits for brands, many of the fundamental, historic elements unique to luxury are being considerably challenged by

13MindshareLuxury,January2016,TheLuxuryReport

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the changes online communication has implicated. From a practical standpoint, digital interaction with brands and products strips away the essential sensory elements that make it unique: clients cannot fully appreciate the quality of garments, jewellery, perfumes, or leather goods through a screen.

Furthermore, any of the benefits listed in the above paragraphs could be interpreted by many as contrary to the soul of luxury. Luxury brands have traditionally had a one-way conversation with consumers. Trends did not emerge from the masses; rather it was the influence of designers informing the editors, journalists and the fashion elite, who in turn influenced the consumers. This classic (and long-challenged) “trickle down” motif has been thrown royally on its head in the digital era. The fear of many luxury Houses is that digital has contributed to a decrease in control; a fear that the luxury industry is becoming overly democratic.

A small number of luxury brands, like Céline, have opted out of social media and e-commerce (Céline’s Creative Director Phoebe Philo even touts that she’d “rather walk down the street naked than join Facebook.”14) However, even if a brand decides to not sell its products online and to not communicate via social media, the fact remains that the strings of digital conversation are active nonetheless. Their products are still photographed, shared, posted and commented upon online. Even if realistically these products are produced in small yields and are sold exclusively via tightly controlled physical retail networks, the content is widely viewed by digital audiences, giving these “exclusive” goods a commonplace perception in the eye of the public.

Additionally, as digital is allowing smaller, younger brands to gain influence and relevance quicker than ever before, consumers are putting progressively less importance on the history and heritage of long-established superpower brands. The Louis Vuittons of luxury are being forced to invent new ways to keep their brands and products relevant in the eyes of a new generation of consumers, who are more and more involved and influenced by social media.

The larger, overarching threat is of course that all of these factors are melding together to create the unceremonious demise of luxury as we know it. Each of the elements that distinguish luxury from fast fashion is being challenged by the presence of digital. And for a variety of reasons, many luxury brands have found it difficult to adapt online communication to their unique needs.

Firstly, luxury brands have long been accustomed to creating “hero content”: high-end, impeccably retouched, glossy advertising campaigns that are poised to bring the brand’s image as close as possible to perfection. But digital is much more about “emotions, proximity, and reactivity,”15 observes Business of Fashion. Followers on social media tend to seek out spontaneity and a behind-the-scenes view, content which brands have been hesitant to adapt for fear of damaging their aura of mystery.

Finding the right balance in frequency of content has been another clear challenge for luxury brands on social media. Too little content has shown to lead to

14AlexeiKansara,Vikram,“TheDigitalIceberg”,BusinessofFashion,http://www.businessoffashion.com/articles/fashion-tech/the-digital-iceberg-luxury-fashion-marketing15AlexeiKansara,Vikram,“TheDigitalIceberg”,BusinessofFashion,http://www.businessoffashion.com/articles/fashion-tech/the-digital-iceberg-luxury-fashion-marketing

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poorer engagement and interest among audiences, particularly with the algorithms put in place by Facebook and Instagram, which have re-jiggered how content is displayed on followers’ timelines. In parallel, there is the constant pressure to “keep feeding the feed” and producing seemingly boundless amounts of digital content.16 In the face of luxury brands’ desire to remain restrained while at the same time attracting a necessary level of attention to their posts, the key challenge remains in how to activate engagement with content as an overall percentage of followers on social media.

Beyond digital communication alone, luxury brands have encountered a strategic problem with aligning the quality, image and tone of voice of online content with that of offline content. This challenge has touched virtually the entire luxury industry, from small niche brands to the industry’s titans. Gucci’s president Marci Bizzarri remarked that “the challenge is to bring consistency across all the brand’s consumer touchpoints”, while Kering’s CEO François-Henri Pinault commented “If what you do online is perceived to be not as luxurious as what you do offline, you have a problem”. 17 LUXURY CONSUMER BEHAVIOR

On its face, digital’s impact on consumer behaviour in the luxury industry can appear relatively simple: customers now have the possibility to shop and consult products online. Beyond this simple fact, social media and e-commerce have completely rewired the fundamental ways in which consumers live, communicate and interact with brands. With the skyrocketing number of online touchpoints between brands and consumers, how has the rise of digital impacted consumer behaviour in the luxury industry? Taking a look at the bigger picture, Mindshare estimates that the global market for personal luxury goods is around 278.1 billion dollars, with approximately 1.1 trillion being spent in 2014.18 The top categories for personal luxury goods are cited as Fashion Accessories (estimated at 80.7 billion dollars), followed by Clothing (69.5 billion dollars), Watches and Fine Jewellery (61.2 billion) and Perfume and Cosmetics (55.66 billion). The United States dominates the luxury consumer market with roughly 81 billion dollars in spending in 2014, followed by Japan with 22.5 billion and China at 18.7 billion. This said, the fastest growing domestic luxury market is India, while Chinese consumers are the top fastest growing nationality (this includes both tourists and local buyers). In the past twenty years alone, Mindshare cites that the number of luxury consumers globally has tripled, today reaching about 330 million individuals. Among this global consumer base, younger, tech savvy millennials are revolutionizing the profile of the typical luxury customer. The New York Times cites that the percentage of luxury customers in their 30’s and 40’s has boomed in the last decade, shifting the consumer profile away from “the usual suspects”: celebrities, 16AlexeiKansara,Vikram,“TheDigitalIceberg”,BusinessofFashion,http://www.businessoffashion.com/articles/fashion-tech/the-digital-iceberg-luxury-fashion-marketing17AlexeiKansara,Vikram,“TheDigitalIceberg”,BusinessofFashion,http://www.businessoffashion.com/articles/fashion-tech/the-digital-iceberg-luxury-fashion-marketing18MindshareLuxury,January2016,TheLuxuryReport

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executives and rich baby boomers.19 This phenomenon is largely due to the vast amounts of brand communication on social media, which has allowed younger consumers to develop more emotional and personal connections with brands. In addition to attracting younger consumers, online communication has made the clientele base of luxury much more diverse, spanning a wider range of ethnicities and nationalities (including emerging markets like Southeast Asia, India and Brazil). This said, different groups of consumers tend to purchase luxury items for vastly different reasons. Women generally attach luxury spending to self-reward, gifting and self-expression, while men prioritize self-expression as a key reason for purchasing personal luxury items. The pool of affluent customers can also be classified into more specific categories related to age and socioeconomics. Some consumers spend time seeking out niche brands; others indulge in luxury purchases when travelling. The wealthy senior spender has long been a force to be reckoned with. Younger “virtual shoppers” look for convenience when shopping online and generally research information on brands and products before purchasing. Within the expanding luxury consumer base has emerged a group of hyper luxury spenders: the ultra-elite (of all age ranges) who seek distinction from traditional luxury customers through unapologetically pricy products.

Mindshare cites the “Natural Luxury Shoppers”20 – millennials ages 18-25 – as the key group driving consumer trends across all segments. While average annual incomes vary among this segment, the key uniting factor remains that “Natural Luxury Shoppers” have become well acquainted with luxury over the years via social media and thus have a much more intimate and casual connection with these brands. “Natural Luxury Shoppers” have also shifted the aesthetic definition of luxury goods, as they look for more discrete products with subtle or no branding. They are attracted by quality, storytelling and savoir-faire. This segment is expected to represent the largest percentage of the luxury consumer market in 2018.

“Natural Luxury Shoppers” are notorious for researching online before purchasing. The same study notes that across all consumer segments, roughly 90% of buyers research a product or a brand online before purchasing. Online research can consist of visiting a brand’s website, its social media pages or its e-commerce site. However, with the convenience of Smartphones and the oftentimes-demanding schedules of current-day luxury consumers, this information is generally consumed in “bite-sized” portions of scattered seconds and minutes throughout the day. This fact has presented a unique challenge for brands communicating online: they must put forward engaging, enriching content that can be consumed and understood in an extremely short period of time. Consumer research can also take an opposite path, wherein a buyer will visit a brand’s store, try a product, and decide later to buy it online. Though online sales still represent a comparatively small portion of total

19Clark,Nicola,“TheNewLuxuryBuyer:Younger,RicherandWell-Wired”,NewYorkTimes,http://www.nytimes.com/2014/12/02/fashion/the-new-luxury-buyer-younger-richer-and-well-wired.html?_r=020MindshareLuxury,January2016,TheLuxuryReport

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luxury sales – roughly 7% in 2015 – the number is steadily growing and expected to reach 20% in the next few years.21 “SEE NOW, BUY NOW”

With more and more luxury purchases being influenced by social media, a unique problem has emerged. Brands tend to focus heavily on communicating about collections as they are shown during fashion week. While this is a sure-fire way to create high quality branded content, consumers are being exposed to collections that are not immediately available to purchase. While some consider the 6-month long wait for collections to travel from the runway to retail an essential part of luxury, others believe that luxury brands are losing out on large commercial opportunities and are generating frustration among their consumer base. A heated discussion has been underway over the past few years: should luxury brands take steps to better align their runway calendars with their retail calendars? In the digital era, have fashion shows become a consumer event, rather than an exposé of raw creativity geared toward the trend-setting fashion elite? Is this new trend – dubbed “See Now, Buy Now” – the right path for luxury?

Many are in agreement that the system cannot go on in its current state. Brands pouring large budgets into shows are not able to fully capitalize on the buzz created around these key seasonal events. Merchandise deliveries have been moved up in an attempt to alleviate the problem by making collections available a few weeks or months earlier. However, this has resulted in a disaccord between the clothes available and the actual seasonal weather during which they will be worn. As a result, pieces are marked down earlier and have a smaller timeframe for being sold full-price on the retail floor.

Luxury Houses are even beginning to see fast fashion brands like Zara and H&M sell knock-off pieces long before they are able to produce and distribute their collections via their own retail network. A handful of designers, notably Tom Ford, attempted to combat this problem by rendering their runway shows ultra-exclusive events with a limited guest list and no photo access. Nonetheless, the main issue has remained present: after viewing a photo of a desired product, the likelihood of a consumer purchasing the item generally drops the longer they are required to wait. E-commerce site Moda Operandi presented the first model of “See Now, Buy Now” in 2009 with their pre-order function, which allowed customers to buy pieces directly off the runway. The collections would follow the typical production and distribution schedule, but the cash would be received up front. This system allowed both brands and Moda Operandi to capitalize on impulsive luxury buys during the global fashion weeks. They were also able to collect the full retail price of the garments up front, which helped fund production. Offering pieces for pre-order right after shows also gave brands important insight onto which items their customers

21Catena,Marco,Remy,Nathalie,Durand-Servoingt,Benjamin,“IsLuxuryE-commerceNearingItsTippingPoint?”,McKinsey,http://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/is-luxury-ecommerce-nearing-its-tipping-point

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preferred – over the long-run helping to organize supply and distribution and ultimately lowering the rate of returns and unsold pieces. Additionally, consumers were able to secure desired garments in their size and colour choices. The success of Moda Operandi’s pre-order business spurred various other e-retailers to follow suit. In addition, brands began rethinking the traditional retail and fashion week model. The commercial benefits of “See Now, Buy Now” are clear, but many have begun to ask if transforming fashion shows into consumer-centric events is in line with luxury. Would this put too much power in the hands of the consumer to drive trends, straying far from luxury’s creative-driven core? Luxury has long had a tendency of informing consumers of what they desire before they even know they desire it. “If I had asked people what they wanted, they would have said faster horses,” once said Henry Ford. The glaring risk of a pure “See Now, Buy Now” model is that luxury brands would sacrifice the innovation and extreme creativity exhibited on the runway in favour of more commercial inclinations. If brands begin showing only commercialized pieces on the catwalk, the unique styling element (oftentimes vital to communicating a House’s ethos and codes) would be lost. From a business perspective, a complete alignment of the runway and retail calendars would pose strenuous logistical problems, particularly among smaller brands. Pre-ordering stock for retail would require companies to assume a fairly heavy financial risk and a large up-front investment. The Council of Fashion Designers of America (CFDA) published a study in early 2016 outlining a number of possible ways for brands to combat the challenges associated with the runway and retail calendars.22 Diving straight into a pure “See Now, Buy Now” model would require resources – both human and financial – that most brands do not currently possess. Thus, a number of hybrid models and case study examples were presented. Generally speaking, American and British brands have been the most eager to explore new methods, with Tom Ford and Burberry planning a complete shift of their runway calendars starting with the Autumn-Winter 2016 season. A number of other designers have been testing hybrid solutions. Alexander Wang made several handbags from the Autumn-Winter 2016 collection immediately available after the show, in addition to a selection of dresses from the same collection available for pre-order. Michael Kors explored a similar method by offering a capsule collection featured on the Spring-Summer 2016 runway immediately shoppable. Among the methods already being tested, the CFDA outlined a list of additional hybrid models, including merging men’s and women’s shows to help cut down on costs and to better align production and retail stock (as men’s collections are generally premiered a few months before women’s collections). The CFDA also presented the possibility of hosting small, intimate and relatively simple press and retail presentations far in advance of the “consumer” debut. By limiting photography access and circulation, the brand could protect its creations while presenting them in a simple, cost effective manner for press and commercial purposes.

22CouncilofFashionDesignersofAmerica,“TheResultsareIn:ExaminingtheFutureofNewYorkFashion”Week,BostonConsultingGroup

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Perhaps it comes as little surprise that European counterparts – the oldest players in the luxury industry – are more reluctant to embrace change. Both the Italian Chamber and the French Fédération stand in staunch opposition to any modification to their current fashion week calendars. Kering’s CEO Henri-François Pinault even commented that “the wait creates desire” and that See Now, Buy Now “negates the dream of luxury”.23 While the conversation moves back and forth, a large number of people in the luxury industry are in agreement that something needs to change. What exactly will this change be? The consensus among most seems to wait it out and see how it works for the others. MEASURING THE EFFECTIVENESS OF DIGITAL COMMUNICATION

Despite its seemingly instantaneous, easy nature, creating a strong digital communications strategy for luxury brands demands more budget and resources than most would expect. Given the relative newness of these mediums – particularly social media – many brands have found it particularly difficult to clearly draw the link between online communication efforts, a brand’s image and overall business success. Connecting the various moving parts has not only proven to be a daunting endeavour, but has also impacted overall development in this area, as many key decision makers within companies find it difficult to justify dedicating ever-increasing portions of their budget to digital. How can luxury brands measure the impact of social media and other digital communication efforts on sales and on overall image, despite the lack of a generally accepted industry-wide standard? The innate nature of social media is entirely unpredictable, as it is driven by sporadic, rapidly changing nature of human interaction. The tides of public sentiment can quickly shift in and out of a brand’s favour, causing a great deal of confusion surrounding what makes a strong social media strategy. Research and scholarly articles proposing solid solutions to this challenge are few and far between. The industry seems to still have a giant question mark floating over its head when it comes to measuring social media’s effectiveness. As the vast majority of key decision-makers within today’s companies did not grow up in the era of social media, building digital competencies throughout all functions within a brand has been cited as an important next step for building presence online. Even for those whose job titles seem to be unrelated, educating an entire company on digital is an important move, as online communication is influencing virtually every aspect of a brand’s business. Spreading digital knowledge across a brand not only can help allocate more resources toward creating content, but it can also help social media managers measure success by liaising with marketing and retail teams. Steps are already being taken in this direction among the higher echelon players in luxury. Business of Fashion has reported that digital’s overall impact on a

23Morand,Pascal,“Op-Ed|TheProblemWith‘BuyNow’”,BusinessofFashion,http://www.businessoffashion.com/articles/opinion/op-ed-the-problem-with-buy-now

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brand’s business is resulting in a complete restructuring of personnel within the industry as companies are striving to develop a strong “digital HR infrastructure”.24 LVMH, Westfield and Saint Laurent are among the latest companies to hire CDOs – “Chief Digital Officers”. Despite these efforts, luxury brands still lag in harnessing more sophisticated digital communication methods compared to other sectors. The definition of success online for luxury brands remains subjective. Many rely on the most basic social media metrics, such as the number of likes, clicks, or comments. However, these methods tend to only scrape the surface in understanding the success of online communication, particularly when considering the complex algorithms on Facebook and Instagram, which have resulted in brand pages reaching an average of 2% of their total following per post.25 Generally speaking, these insights can be helpful in measuring overall awareness, but not for tracking purchases or content quality. A brand’s overall social media following oftentimes reflects the amount of budget dedicated to campaigns and generally not the overall quality of the content. The volume of search engine queries can be extremely misleading because of the products researched in relation to the brand name. For example, in 2013 Chanel surpassed Louis Vuitton in the number of searches conducted due to a large percentage of users looking for the Chanel’s accessible beauty products. Among the most basic (and free-of-charge) statistics, “engagement” seems to be key. Engagement measures the percentage of overall viewers of a post who clicked, liked or commented on the content. This marker tends to give more insight as to which types of content are more interesting to a brand’s audience and is not directly related to a page’s total follower count. Generally speaking, it is much more important to have a tight number of fans who highly engage with a brand’s content than a large and relatively unengaged social media following. This said, without the proper communication infrastructure within a company, engagement and other basic metrics can only be truly related to a brand’s “image” success online and only in very few cases can be directly linked to sales. Repeat visits on a website, conversion rates (the percentage of users who go on a brand’s website and make a purchase) sales levels of the online boutique and text analysis ratings are more solid ways of measuring digital’s impact on revenue. However, as these statistics only tend to measure websites and online stores, they generally fail to draw the link between social media and overall sales (both in physical boutiques and online). Additionally, these metrics are limiting, as they do not take into account purchases in physical stores that were influenced by online content or vice versa.

24AlexeiKansara,Vikram,“TheDigitalIceberg”,BusinessofFashion,http://www.businessoffashion.com/articles/fashion-tech/the-digital-iceberg-luxury-fashion-marketing25Amed,Imran,“DoDigitalRankingReallyMeanAnything?”,BusinessofFashion,http://www.businessoffashion.com/articles/right-brain-left-brain/do-digital-rankings-really-mean-anything

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INSIGHT THROUGH INTERVIEWS To answer these questions about digital democratizing the luxury industry, its impact on consumer behaviour and measuring success online, a number of informational interviews were conducted with industry professionals, ranging from in-house digital managers at luxury brands like Stella McCartney, Marni, Boucheron, Marc Jacobs and Maison Margiela to luxury groups and international digital agencies specializing in the luxury industry. When asked if digital is making luxury brands more or less desirable, most respondents agreed that it has certainly changed the relationship and communication between brands and consumers, but for the most part has had a positive impact on the industry. Though brands are more reachable via social media, cited one interviewee, it does not mean that they are necessarily more accessible – price will always be a differentiating factor. “Social media has shifted the power much more into the hands of the consumer,” remarked Stella McCartney’s Social Media Manager. Additionally, “advocacy of brands by online influencers is becoming increasingly important.” “In the past, communication with luxury brands was really top/down,” commented a former Digital Account Manager from Same Same (a digital agency that specializes in the luxury industry). Now, “social media is a key tool to engage a conversation with your customers,” he continued. People can interact with brands on digital platforms in ways that they can’t with traditional advertising. For example, while flipping through a print magazine, a customer would likely see an ad and turn the page, where as on a digital platform they would see content and interact with it (via likes, comments, or shares, which would in many cases give the content even more exposure to that person’s friend group on social media). The rise in collaborations with bloggers and user-generated content has completely changed the direction of the conversation. For luxury brands, this has meant “putting the consumer back in the core of the strategy.” Brands are beginning to recognize that the “stakeholders” of luxury have changed, commented a Digital Strategist at Kering. Buyers are no longer filters for consumers; the power is moving much more into the hands of the clientele. Because of social media, everyone is a “stakeholder”. Of course, giving this sort of power to consumers has caused wariness among luxury brands, many of which still believe in the “top-down” model of brand awareness. Brands are now asking themselves: “How far is too far?” The majority of interviewees agreed that editors, buyers, journalists and the fashion elite still have their influence, particularly among those within the industry. However, many remarked that the pool of influential people has greatly expanded due to social media. “There is no longer just one influential type of person in fashion” commented the Social Media Manager at Stella McCartney, “what has changed is that there are many more of them.” Viktor & Rolf’s Digital Marketing and Content Manager reflected upon the change she’s seen over the past several years in invitees sitting front row at fashion shows. “Now, there are much more online influencers,” she cited.

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Predictably, the traditional fashion “elite” – from supermodels to editors – has also latched onto social media and has a wider influence because of it (though they were, remarked several, slower in cultivating a worldwide audience). Former Digital Manager at Maison Margiela brought up the phenomenon of the “Insta-girl”. They’re not necessarily bloggers, because they don’t write anything; they’re girls with Instagram accounts who post photos of styled outfits, products, the works. Brands are starting to see the influence they have over their audiences and are even starting to send them clothes in hopes that they will photograph them (and in some cases pay for posts). Online influencers have undoubtedly changed the conversation between luxury brands and consumers. Kering’s Digital Strategist cited that a major reason brands decide to work with influencers is because they tend to get much more engagement on social media than a brand typically does. Additionally, consumers have a tendency to view brand communication as being more credible when it is coming from an outside party. The Chinese market was cited as being particularly responsive to messages put out by influencers, as many look to these figures for recommendations before making a purchase. For the most part, she continued, consumers are aware that these influencers are getting paid to post and collaborate. Some brands try to keep it under wraps; others are much more open about it. Either way, for a collaboration to be successful, the brand must have a good rapport with the influencer (beyond the bounds of money) and must match in terms of style and DNA. Viktor & Rolf’s Digital Marketing and Content Manager remarked that partnerships with online influencers have resulted in a much less one-sided conversation, as brand communication is now becoming much more of a collaborative effort. Additionally she cited that “bloggers have lifted the veil on fashion. Now they are at shows, backstage, behind the scenes in the ateliers… Brands have begun to let them in on the communication process.” Boucheron’s International Corporate Communications Manager explained how online influencers were the first to “dis-institutionalize” luxury brands by making them more visible (and consequently, more desirable). They have greatly contributed to the democratization of the industry, she continued, and have helped in reconstructing the link between brands and consumers. “I think many bloggers have introduced brands to otherwise unsuspecting people, which is crucial,” explained Stella McCartney’s Social Media Manager. “They’ve beaten down the elitism, which has opened up many brands to an entirely new market.” Today, communication online now goes much further with influencers, he cited. Though they have made luxury brands more accessible by taking away some of the myth, generally they have had a positive impact. Bloggers were cited as being particularly important in the product life cycle by promoting “key pieces” for brands. When asked specifically about brands’ use of social media, many agreed that while it has had a negative impact on some, it is an incredibly powerful tool and is essentially a must in today’s Digital Era. Not only does it enhance the reputation of a brand, cited Kering’s Digital Strategist, but it also helps the brand manage its reputation by putting out its own messages and feeding the online conversation. After

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all, “Social media is essentially an extension of the brand,” remarked Viktor & Rolf’s Digital Marketing and Content Manager. This said, a few respondents believed that there are many luxury brands that have been overexposed online and whose desirability is decreasing as a result. “Brands need to take a step back and recalculate their entire strategy,” examined the former Digital Manager of Maison Margiela. Dior and Louis Vuitton were cited as two examples of brands that post too much content online, and who are becoming less interesting because of it. Louis Vuitton, for example, has a heritage of being a travel brand. “As a consumer,” she commented, “I’m not travelling with the brand; I’m just seeing a lot of photos of bags.” When asked about brands like Céline, which have taken a strong stance to opt out of social media, many noted that it is a strategic decision that factures into a much larger picture. A Corporate Communications Officer at OTB (an Italian fashion and luxury group) observed that brands like Céline are able to thrive without using social media because of the fact that it is already a well-established luxury brand that is part of a strong, larger group. Stella McCartney’s Social Media Manager commented that even though Céline does not use social media, there is still a lot of advocacy for the brand online, with influencers, celebrities and editors alike posting about the products on their personal social media pages. Kering’s Digital Strategist cited that opting out of social media and other digital activities is a strategic decision because not all brands have the resources to put these tools properly in place. To explain this stance, the brand Christopher Kane was used as an example. The House’s first digital platform was an Instagram account. Many considered that the lack of the brand’s online presence gave a quirky edge Christopher Kane. Shortly after, they developed a website (an essential tool for any brand, she remarked). Today, the brand still feels that they do not yet have the capabilities to put in place a full-blown digital strategy. So to avoid the risk of damaging the brand’s image, Christopher Kane has decided to hold off until they feel that they can create quality content in line with the House’s standing. All interviewees agreed that being present in some form is essential for luxury brands. When people are looking for information, commented OTB’s Corporate Communications Officer, they no longer go to physical stores or simply ask their friends – they look for information online. Thus, being present online is a fundamental part of supplying customers with the most basic information in order to make a purchase. An E-commerce Merchandiser at Marc Jacobs added that e-commerce is a particularly important tool, as it allows brands to display the fullest assortment of merchandise and for customers to have the most access to information about products. The key challenge for luxury brands online, many cited, is striking the right balance with their frequency of communication and type of content as part of the brand’s global strategy. Most agreed that a major problem for luxury brands in the past was that they were simply adopting offline content to online instead of tailoring content specifically for their digital platforms. Kering’s Digital Strategist remarked that there is an increasing focus in the HR structure within companies to combat this problem by developing dedicated Digital Brand and Image teams.

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But what is good online content? “As a user, I’m bored with what I’m seeing online,” remarked the former Digital Manager of Maison Margiela. “At Margiela, I was frustrated because we had to create content out of nothing.” Brands need to be careful about posting meaningless content; there’s so much content out there that people will start to disengage. In the early days of social media, she continued, there was a lot of spontaneous content posted by brands. (Of course, there is a fine line between spontaneous and bad.) But spontaneous content was what made social media so interesting and dynamic. Brands today are so concerned with creating “picture-perfect” photos for social media, but when they allow themselves to show more candid moments, people will engage. This highlights the importance of having an in-house photographer who can capture these instances in images with the quality and skill a luxury brand requires. Stella McCartney’s Social Media Manager touched upon the importance of having a balanced approach to the online platforms a brand decides to use. “There are obvious platforms where your market is, and obvious platforms where they aren’t,” he stated. “The ecosystem is now so vast, brands can pick and choose. You shouldn’t spread yourself too thin; it dilutes the message.” A luxury brand also needs to take a balanced approach to social media and e-commerce in conjunction with other activities, such as traditional communication and marketing, distribution and pricing. “Keeping the mystery alive is very important online,” commented Viktor & Rolf’s Digital Marketing and Content Manager. Maison Margiela was used as an example of this by its former Digital Manager: Margiela has never paid for advertising, so the brand uses its online presence to get its message out. The balance between the two helps maintain its mysterious aura. Goyard was used as another example of a brand that until fairly recently did not use social media. Several months ago, Goyard launched a private Instagram account. Access to the account was only given to select clients, which helped maintain the exclusivity of the brand. As Goyard has strong name recognition, this also allowed them to use social media in order to communicate with a specifically targeted audience. The goal was not to gain more attention, but to cultivate its existing audience. Striking the right balance between a brand’s own social media content and that of their designers and creative directors was mentioned by several as being a key challenge. The brand Viktor & Rolf is very cemented in the head designers’ identity, explained the House’s Digital Marketing and Content Manager. “We look to keep a touch of the designers in our online communication – but not too much.” In regards to other Houses, she cited that many post lots of branded content, but not quite enough about the people behind the brand, which tends to take away the “human element”. Kering’s Digital Strategist also touched upon this subject by explaining how now more than ever there is a distance between brands and their designers. In the past, the two were one entity. Today, however, each has separate social media accounts and diffuses separate messages. Brands should begin to create guidelines, she continued, explaining the need for tighter controls on the image of designers on social media as part of the brand’s overall communication strategy. “The discrepancy between a brand’s vision and a designer’s personality is ruining brands’ reputations,” she added. (Balmain was cited as an example of a brand that focuses enormous

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amounts of online communication on the “personal branding” of the creative director and not enough about the brand itself.) The right frequency of content, as well as the various benefits of different types of content, was one of the points that differed vastly among interviewees. Instagram’s Head of Fashion Partnerships explained that it is extremely important for brands to post regularly – at least once or twice per day. Maison Margiela’s former Digital Manager disagreed, commenting that “there is so much noise in the digital sphere; social media has created a lot of consumer fatigue.” Instagram’s Head of Fashion partnerships also cited that behind-the-scenes and “Storytelling” content about the history, codes or craftsmanship of a brand tend to be among the best type of content for social media. Images and videos that give followers a more intimate look into a House is extremely engaging for fans, she elaborated. Contrarily, Kering’s digital strategist argued that “Storytelling is important, but it has gotten old – there’s so much of it now.” People are starting to seek out ways to experience how the brand is “in real life”, but online, she continued. With this, brands have begun to create “Story Doing” content by organizing events to enable people to post online about the brand. Gucci’s recent resort show at Westminster Abbey and Chanel’s cruise show in Cuba were cited as two examples of “Story Doing”. Aside from organizing the event, the brand provides a few basic guidelines, like hashtags, to a tailored group of invitees and essentially leaves them to start the online conversation. When a large number of influential people in fashion are all talking about an event on social media, it helps the brand build legitimacy and a strong reputation. Though substantial advancements in digital communication are being seen in the luxury industry, many interviewees still feel that luxury has long been reluctant to embrace digital. Generally, there is not much innovation among luxury brands online, commented Stella McCartney’s Social Media Manager. Marni’s Head of Web and E-commerce argued that the biggest obstacle has been to change the internal culture of companies and their approach to traditional communication. Many luxury groups are just now starting to build internal digital departments and appoint top executives dedicated to digital communication. On the other side, Boucheron’s International Corporate Communications Manager argued that luxury brands were not necessarily late in adopting digital, citing several digital leaders – like Burberry, Marc Jacobs and Hermès – which had lots of influence over many fast fashion brands. Moving forward, the general consensus was that luxury brands would improve their digital capabilities and be more reactive to new developments and trends. Particularly in luxury, expressed Viktor & Rolf’s Digital Marketing and Content Manager, brands are always competing to be number one: having the most followers, the best content and the best collaborations. When considering the future of digital for luxury brands, a number of challenges were addressed by the interviewees. Stella McCartney’s Social Media Manager commented on the fact that many brands are ill equipped for digital success because they have long been slow to adapt. On the other hand, the early adopters are now all more or less competing on a level playing field, but are finding it difficult to further improve because they are “trapped with traditional mind-sets”. Setting goals has particularly been difficult for these brands, he continued, because in the fast-

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paced world of digital, luxury brands need to be limber enough to react quickly to the ever-changing environment. The former Digital Manager at Maison Margiela explained that a major challenge moving forward for luxury brands on digital is involving the creative director: a very important step which is too often being left out. Brand social media accounts are sometimes very far from the creator’s vision, she explained, but the importance of these platforms has not quite yet hit the people at the top of these companies. “Social media should not be entirely dependent or independent,” she concluded. It needs to work in sync with all other parts of the company. Several interviewees mentioned closing the gap between online and offline image as an ongoing struggle. Kering’s Digital Strategist used Bottega Venetta as an example: the brand’s physical stores are not as luxe as its online store, partly due to an outdated merchandise selection, she examined. Additionally, Bottega Venetta has experienced lots of retail employee turnover, as salespeople feel less attached to the brand. For new employees, the training process is long and generally takes months for a new salesperson to properly learn the history and craftsmanship behind the House. (Meanwhile, all this information is available in a sleek, easy-to-use format online.) On the other hand, Maison Margiela’s former Digital Manager remarked that, generally, it is the online platforms that appear less high-end than the offline touchpoints. Valentino was cited as an example. Online, she believes the House’s image to be too approachable and commercial and that the brand implements too many “fast fashion tactics” (such as “regrams” or user generated content). Valentino boutiques, on the other hand, were referred to as being much more “luxurious and dreamy – almost intimidating”. Additionally, e-commerce for luxury brands was mentioned as being a category that lacks proper image control. “E-commerce needs to reflect what the brand is in terms of image and styling,” she commented. “Luxury brands need to look at e-commerce with the same importance they look at an ad campaign.” OTB’s Corporate Communications Officer also mentioned the lack in quality of product photographs on e-commerce sites. Not only are good photographs key in selling the product, she argued, but it’s also a major hit to the brand’s image when low-quality pictures are being diffused. Harmonizing a brand’s online and offline image is easy, commented the Social Media Manager from Stella McCartney: it simply requires more communication between teams. Generally, he continued, social media tends to be a “free for all” for brands (partly due to weak budgets and lack of high quality content), while etiquette in physical stores is generally much more controlled. Burberry was used as an example of a brand that implements a very tight editorial style for social media; however, the strategy has become so strict that it has nearly lost the “social” aspect of social media. Prada, on the other hand, was cited as a brand who’s online experience is “below par”, but emulates a very high-end experience in boutiques. When asked how social media has impacted consumer behaviour in the luxury industry, the interviewees responded overwhelmingly that it has facilitated the purchasing process by providing easy access to information. This has caused consumers to conduct more research on products and brands before purchasing.

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Additionally, the purchasing process has become more efficient thanks to e-commerce sites and directly shoppable content on social media. Consumers are also aware of more brands – both big and small – and are much more savvy when it comes to niche designers. Generally, the interviewees did not consider e-commerce as a threat to the brick and mortar shopping experience. An E-commerce Merchandiser at Marc Jacobs commented that online stores and physical boutiques compliment one another, particularly when a brand has put in place an omnichannel strategy. (An omnichannel strategy consists of activities that link offline and online retail networks, such as synchronizing stock and offering various services to customers, such as buying online and picking up in-store, returning merchandise ordered online to physical boutiques, or opting to have an item unavailable in boutiques be shipped to the customer’s home address.) Additionally, OTB’s Corporate Communications Officer noted that many customers will conduct product research on a brand’s e-commerce website before buying an item in boutiques or vice versa. Several respondents commented on ways that digital can be used to enhance the in-store shopping experience. Maison Margiela’s former Digital Manager commented that currently brands are missing the mark with screens and other “gadgety” devices in boutiques. She recommended that brands work toward utilizing CRM platforms by syncing customer data collected both online and offline. This way, salespeople in boutiques can take the name of a client and immediately have his or her entire purchase history available on an iPad. Additionally, she suggested that luxury brands start investing more heavily in omnichannel activities and syncing physical and online retail stocks. Lastly, RFID tags and scanners were recommended as a way of overcoming some of the shortcomings of staff knowledge in boutiques. Using this technology, customers can scan pieces directly to get more information about the product, stocks, sizes, etc. Burberry was cited as a key example of a brand that has put digital at the centre of their overall strategy. Digital’s influence on the brand as a whole can be immediately seen in boutiques, where in addition to RFID scanners, customers can interact with a number of branded digital content, including virtual windows which allow shoppers to remotely try on garments. Various applications for customizing clothes, accessories and even perfumes are starting to be tested by luxury brands, in addition to virtual reality helmets which can allow the customer to experience the inside of a fashion show venue or an atelier. Kering’s Digital Strategist explained how the group is putting in place e-commerce strategies to support their brands’ retail networks as a whole. The group has started by advising brands on their online merchandising: roughly only 33% of merchandise should be available to purchase online, putting the focus on a curated selection of pieces with a strong focus on “it” products. Next, the group has dedicated abundant resources on building each brand’s omnichannel capabilities and improving synergy between online and offline. The key for brands with e-commerce websites, she noted, is to differentiate themselves from wholesalers (after all, brands are never going to sell like Net-a-Porter). This means that each brand needs to tailor its services (both online and offline) and focus on developing relationships with clients. To implement this, a group-wide Retail Excellence Department has been created to

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focus on optimizing online and offline networks. Their goal, she explained, is to bring brands back to the basics of selling. Years ago, salespeople in luxury boutiques knew each of their clients (by name, in many cases). With the increased focus on volume over the past several years, the value aspect got lost in the shuffle. Now, she concluded, brands are beginning to re-acknowledge the importance of a personalized experience. Kering’s retail excellence strategy even boasts special invitations for VIC (Very Important Clients) – including soirées, operas, or restaurants – geared at both extending their appreciation to top clients and improving sales. (The strategy is said to be working, as it has encouraged these customers to keep buying more.) The rise of e-commerce and social media has furthermore affected consumer behaviour by exposing smaller, younger and niche brands to wider audiences. As a result, many customers are starting to turn away from the “mainstream” by seeking out lesser-known niche brands. In turn, the lack of general customer awareness about these brands creates an exclusivity all its own. More specifically, customers are beginning to gravitate more toward the values and identity of these Houses, as well as their craftsmanship, culture, and social and environmental responsibility. With more and more customers seeking value, there is a strong trend toward bringing back the importance of “the brand”. With this movement, brands have begun communicating more strongly on their narratives, values and aesthetic codes. Digital’s influence on consumer behaviour could not be discussed without talking about the “See Now, Buy Now” phenomena. While most agree that, in principle, “See Now, Buy Now” is a good idea for luxury brands, the reasoning behind this consensus was somewhat mixed. “Brands need to be realistic,” commented OTB’s Corporate Communications Officer. “Today, a six-month wait is too long for customers.” Kering’s Digital Strategist noted that in the industry, there are two main schools of thought. There are the “big brands with big production” that have customers that want to buy straight from the catwalk. These behemoths of the industry – like Burberry – have the resources to put out the production right after the shows. Meanwhile, the “traditional luxury” Houses remain dedicated to the idea of making people wait and have little desire to change the current model for fear of erring too near the strategy of “fast fashion” brands. “Ironically, the ‘broken fashion system’ is due to social media,” Maison Margiela’s former Digital Manager pointed out. At the moment, the problem is that brands are doing so much communication on social media around fashion shows, and customers are seeing lots of images of clothes that are not available in boutiques. It is clear that they have the desire to buy it now, but will likely forget six-months after the fact. Decades ago, one interviewee noted, fashion Houses used to have two shows. The first and most important show was for the client. The brand would adapt its production based on what the clients wanted. The second show was for the press, which back then was much less important than it is now. “See Now, Buy Now” makes sense to many because of the consumer fatigue around understanding the seasons and collections. Most interviewees noted that it would be exceptionally difficult for most brands to implement a pure “See Now, Buy

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Now” strategy due to lack of the proper mechanisms, resources, teams and logistics. Several recommended hybrid strategies outlined in the CFDA’s report on “See Now, Buy Now” and the fashion week calendars. Several respondents acknowledged the merit in Henri-François Pinault’s statement about “time building desire”. However, at the rate the industry is currently moving, fast fashion brands are beating out luxury simply because they can move the merchandise quicker. An example was cited by one interviewee who noticed that just weeks after Gucci’s Autumn-Winter resort show, the eye-catching metallic loafers featured in the collection were available (as knock-offs) at Zara, whereas the original shoes were not available in Gucci boutiques until several months later. Plenty of people who could afford the Gucci shoes, she noticed, did not want to wait and purchased the Zara knock-offs instead. “Luxury is missing out on a lot of impulsive shopping,” stated the former Digital Manager from Maison Margiela. The key is to create a balance between availability and scarcity through distribution to keep up desirability. “See Now, Buy Now” would even make it easier to measure the impact of social media on sales and solve lots of the frustrations both consumers and brands are having. “Either way”, she continued, “the consumer would not be deciding.” The press would still choose what goes into magazines, buyers would still decide what goes in stores, and stylists and designers would still be granted full creative freedom on the runway. “See Now, Buy Now” would also solve the problem with the fact that roughly 50% of the collection seen on the runway does not end up being commercialized and sold in stores. Lastly, when a House changes creative directors (which is happening more and more often), there would not be as big of a gap between who is creating the collections and the merchandise available in boutiques. Others argued that “See Now, Buy Now” could put pressure on designers to sacrifice creativity on the runway since shows would be so commercially oriented. Additionally, a pure model could increase the amount of strain put on the organization as a whole due to even tighter deadlines and production times. Stella McCartney’s Social Media Manager claimed that the six-month lag time gives brands a much-needed period to understand the demand for certain pieces and to ramp up production on key items. Brands also need the reaction time right after shows to create and diffuse the advertising campaigns and for the long-lead press to photograph the clothes for editorials. “The very essence of luxury is desire,” he stated, “and waiting for something that has been packaged up so perfectly – through shows, campaigns, placements, editorials – is the epitome of that.” Kering’s Digital Strategist noted that the group keeps tabs on online conversations around their brands’ fashion shows to gather important information on certain pieces, which are particularly catching hold in the digital sphere. The group communicates these figures to each of its brands, which can in turn tailor their production and distribution accordingly. “There is lots of uncertainty around ‘See Now, Buy Now’,” she commented, “Many brands are waiting to see how it works for Burberry before jumping in.” Measuring the effectiveness of social media on a brand’s image and sales was cited as being one of the biggest challenges for luxury brands. “Everyone’s still a bit

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in the dark,” commented one interviewee. Most said that there is no way of measuring the full extent of digital’s effectiveness. Viktor & Rolf’s Digital Marketing and Content Manager commented that measuring success is particularly difficult when a brand works with a lot of online influencers. If a blogger posts branded content on their own social media accounts, there is no way for the brand to know exactly how many people that content reached and if it influenced a purchase. Most fashion executives don’t understand how customers interact with social media, commented Maison Margiela’s former Digital Manager. It is vital that there be more communication between the social media teams and the rest of the company in order to measure success online. Today the flow of information generally starts with the marketing team, which tells the social media team what products to post about; the flow between departments needs to be more fluid for brands to properly implement and measure the success of a digital strategy. Aside from using some technical tricks like traceable links and plug-ins, she recommended setting regular meetings between social media and retail teams to get feedback on sales in order to draw a link between content posted online and products sold. Stella McCartney’s Social Media Manager referenced standard KPIs, such as follower growth and conversion rates as the most basic insights. The engagement rate is a key statistic, he noted, in gauging the interest of a brand’s audience in its online content. The use of social media listening tools, which offer insight into the sentiment of online conversations around the brand, was also mentioned as an important mechanism. In-house software was cited as being particularly helpful, notably when generating reports for management. Admittedly, he commented, measuring the impact of social media specifically on sales is a difficult endeavour. Social media is generally not a large converter of browsers to buyers because it is not specifically a “shopping environment” and does not typically have the same levels of intent as traditional methods, like a Google search. This said, one way brands can measure the impact of social media on sales is by calculating attribution. Attribution is a measurement of where the traffic of an online store originated. However, social media is generally not the last place someone was when they accessed a brand’s online store. (More often than not, it is via a search engine.) OTB’s Corporate Communications Officer highlighted the importance of tailoring the measurement of success to each specific platform. Instagram, she noted, has much more of a focus on artistic content. Fashion brands typically see much more engagement on Instagram than on other social media platforms, but likely do not have a large direct conversion rate from browsers to buyers. Thus, success on Instagram should be more geared toward overall brand awareness. Platforms like Facebook and Twitter give brands the capability of posting more diverse content. As such, the measurement of success of these platforms could be more focused on commercial ends. It was also suggested that brands could compare year-to-year sales versus the investments made in online communication to get a global idea of social media’s impact on sales. (However, many other factors could affect this, such as the collection from that year or the distribution.) In fact, brands have virtually this same problem with print advertising, she noted. Even with traditional ads, it is very difficult to make the link with sales. And since fewer and fewer people are buying print magazines, the investment made is

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becoming significantly less effective. The major benefit of social media here is that brands can measure exactly how many people viewed a photo and interacted with it, whereas with print ads, it is not possible to have this sort of insight.

ANALYSIS, OBSERVATIONS AND RECOMMENDATIONS

ON THE DEMOCRATIZATION & DESIRABILITY OF LUXURY:

Many brands have harmed their image over the last ten years by over-exploiting digital platforms and diffusing content out of line with their ‘offline’ branding strategy. The early days of social media gave way to a hodgepodge of misaligned content, which many luxury brands have been slow to abandon. Moreover, digital communication has subjected the formerly exclusive and mysterious realm of luxury to mass exposure across the world. One could even say that digital – whether within a brand’s sphere of direct control or not – has even exposed luxury products to the point where many have become practically commonplace in the eyes of consumers. Despite all of this, digital has helped luxury brands gain notoriety – and clients – at an alarming pace. “The development of digital capabilities will be a necessary condition for survival,” stated Luca Solca, Exane BNP Paribas’ Head of Luxury Goods26. Globally, I believe that social media and other forms of digital communication have had an overwhelmingly positive impact on the luxury industry as a whole and will likely continue to contribute to its desirability and financial success over the long-term. As Bourdieu suggested in Distinction, the “virtue of rarity” plays an important role in making luxury products desirable. This said, “rarity” can have a plethora of definitions in the luxury industry. Rarity can be related to “perceived rarity” of an item through a brand’s communication strategy (i.e. abstaining from social media and other forms of digital communication) in order to impart the idea upon consumers that the brand’s products are exceptionally exclusive (even if they are widely available in stores). On the contrary, brands can also control the rarity of their products by physically limiting the quantities produced and their points of sale. Rarity can also be defined through an extremely high pricing strategy, wherein a product becomes innately rare simply because of the number of consumers with a high enough buying power willing to purchase it. Rarity could also be reflected in terms of the design of a product: its silhouette, its innate style, or the body of cultural knowledge required to fully appreciate the piece.

Because rarity can mean so many different things in the industry, digital cannot be placed with the sole blame for luxury brands’ overexposure over the past decade. Additionally, this highlights the importance of considering digital when

26AlexeiKansara,Vikram,“TheDigitalIceberg”,BusinessofFashion,http://www.businessoffashion.com/articles/fashion-tech/the-digital-iceberg-luxury-fashion-marketing

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designing a brand’s overall business strategy, which has now become an inescapably vital puzzle piece in the proper functioning of luxury brands today. With the economic recession of the past decade, many luxury brands fought to grow profits by expanding the luxury consumer base across the world. While in some cases this helped with business in the short-term, many brands have suffered the consequences of overexposure because of it. While digital has influenced the over-exposure, many other components have also played a major role. For example, the rapidly growing Chinese market – which grew 27% per year from 2007 to 201427 – poised many luxury mega-brands, like Louis Vuitton, to over-expand their retail networks. The mass-availability of these brands’ products eventually caused Chinese consumer interest to drop. This combined with the slowing Chinese economy over the last two years has resulted in the closure of a number of European and American luxury boutiques.

Additionally, many luxury brands attempted to combat the worldwide economic recession by offering lower-priced product lines and “diffusion” collections aimed at attracting a wider consumer base. This too impacted their overall image, as the perceived rarity of the “aspirational” high-priced products dropped substantially. The future success of luxury brands depends on striking the right balance between accessibility and exclusivity through all parts of their business – from pricing and design to digital communications. The fact that rarity is a key ingredient in the desirability of luxury goods has not changed. What has changed is the number of different components brands today have to consider when designing an overall business strategy. In order for luxury brands to use digital to sustain their future desirability, a strong focus needs to be placed on tailoring the online communication strategy to the specific DNA of the brand and its business needs and capabilities. Additionally, it is essential that digital be harmonized into the company’s overall strategy. This includes integrating the online communication strategy into pricing, distribution and even traditional advertising campaigns. Digital communication and social media present luxury brands with unique opportunities to engage and communicate with their customers in ways that traditional advertising cannot. Traditional advertising is mostly restricted to print and television ads, press releases, boutiques, shows and other events. Each of these initiatives generally costs the brand large sums of money to execute.

Social media, on the other hand, is essentially a free tool for brands – and when brands do decide to invest in advertising on social media, the investment is usually very flexible. Because of the lack of budget restrictions, social media allows brands to share much more content with their customers than traditional paid advertising. This has entirely redefined the elements to consider when building a communication strategy for a luxury brand. Because brands can diffuse content much more liberally, there is an increased focus on general branding and communicating on an overall mood rather than pushing individual products or collections strictly for sales purposes. Content about a brand’s DNA, narratives, values, aesthetic codes, 27Pike,Helena,18January2016,“TheLuxuryBrandBalancingAct”,BusinessofFashion,http://www.businessoffashion.com/community/voices/discussions/hasluxurygonetoomass/theluxurybrand-balancingact

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archives, and inspirations are just a few examples of the diverse messages being shared online.

Moreover, content shared on social media and online platforms is much more instantaneous and up-to-date than magazine or TV ads. A behind-the-scenes photo, for example, can be posted within a matter of seconds, whereas traditional advertisements generally require a lead-time of several weeks or months. And when a customer is interested in particular online content, they can interact with it in a variety of ways (via sharing, commenting, liking, etc.) – oftentimes leading to increased exposure.

Of course, the “mass” approach of some luxury brands has scared others away from social media for fear of tarnishing their exclusive image. Though some have used social media as a “free for all” for posting masses of poor quality images and user generated content, online platforms are now flexible enough to accommodate vastly different types of strategies. While it may prove effective for some, not all luxury brands are obliged to give into the “mass” approach to online communication. There will always be the “Burberrys” of the industry with a mass approach to luxury through social media, expansive worldwide retail networks and generally accessible product design. However, not all large luxury brands will need to succumb to this type of strategy in order to be successful in the long-term. Even large luxury brands can thrive without giving in to mass appeal. For example, this could be reflected as a digital strategy with a strong focus on reactivity, creative high quality visual content and leading the way in digital trends. While digital could be used to support retail networks, a large focus would be put on top-notch branded and “storytelling” content. In parallel, the digital strategy would be balanced out by a tight distribution policy, whereby the brand’s products would only be sold in their own directly-controlled boutiques (not in multibrand shops). The brand could also potentially offer a small number of products or only certain product categories for purchase on their online store. This would allow the brand complete control over their online and offline image while reaching their consumer base and recruiting new clients online. High-end niche brands with a limited retail network and financial resources could use digital as a cost-effective way to spread their brand’s message across select social media platforms. Meanwhile, their products would only be made available in directly controlled boutiques and in a careful selection of niche multibrand stores. To make up for their lack in physical retail presence, these brands could compliment their strategy with a highly interactive website with a curated selection of merchandise available on e-commerce. Several high-end niche brands with large financial resources – including Céline – have already executed a strategy of widespread advertising campaigns, no social media presence, and tightly controlled retail distribution. For brands who do not wish to remain entirely absent from social media, opening private social media accounts would be an effective way of being present online while cultivating a tightly targeted group of consumers. Since these brands would be placing the focus on a small number of dedicated customers, a full-blown social media plan would not be necessary.

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Young brands with very limited financial resources can harness digital to develop a community and effectively expand their client base by cultivating their online identity. A strong focus could be placed on developing the brand’s “tone of voice” via social media. Furthermore, the brand could cultivate a wider audience through collaborations with selected online influencers. In parallel, the brand’s community management strategy would be supported by a high quality website and an integrated e-commerce platform with a curated selection of “image” and carryover pieces. For any luxury brand, offering a personalized experience to customers can be an effective way to promote rarity. Allowing customers to personalize products (whether online or in boutiques) promotes engagement with the brand and gives consumers the impression that they are buying something unique. Burberry is an example of one brand that has begun to do this with monogrammed scarves and perfumes with notable success. For both young and heritage brands, large and small, digital communication is not only a key method of spreading a brand’s message to consumers, but also a way of gaining important insight into customer’s interests. While fashion and luxury remains oftentimes illogical, highly emotional, and sometimes entirely unpredictable, brands can pick up valuable information by tracking online conversations. Using social media listening tools to follow online conversation can help measure “sentiment” around brands as well as identify key products. The reports generated from these tools can in turn be shared with other parts of the organization to help give strategic direction and develop methods for addressing potential problems related to image, branding or communication. Many luxury brands fear that being overly conscious of consumer interests would potentially lead them to sacrifice their creativity. Despite this, the fact that consumers have an increasingly strong hand in defining fashion and trends today is practically unavoidable. Though the rise of digital over the last ten years has had a great deal of influence, this movement is not entirely new. For decades, designers have been taking inspiration from the “street”, giving way to a “trickle-up” model of trend-setting (for example, Marc Jacobs taking note from the west coast grunge scene circa 1995).

Luxury is an intensely creative industry. While some may believe that creativity and inspiration should only be reserved for the more “legitimate” forms of art and culture, the innate eclectic persona of luxury and fashion is what creates its particular flair. Thus, taking inspiration from a wide variety of sources – even from the average consumer on the street – not only can help align products with consumer desire in the short-term, but will also contribute to its complexity, uniqueness and success in the long run. ON LUXURY CONSUMER BEHAVIOR IN THE DIGITAL ERA:

Social media and digital have not only greatly influenced the way consumers interact with brands, but have also expanded the profile of today’s luxury clientele. Because of widespread and easy-to-access information about brands, there are now

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many more consumers of luxury products than ever before. In parallel, this growing luxury customer base is becoming increasingly more diverse.

Digital communication has created a massive increase in awareness of luxury brands and luxury products around the world. From the perspective of Bourdieu, repeated contact with branded content online has resulted in a level of casualness among consumers toward the luxury industry as a whole. These messages have cultivated and educated the ever-expanding luxury consumer population on the codes, values and narratives of luxury brands. Social media has created a particular level of intimacy between consumers and brands because of its innate casual nature, due to the melange of interactions with both personal acquaintances and branded content. Through social media, brands have subliminally encoded consumers with the code necessary to understand and appreciate their brands.

The fact that more diverse groups of people – in terms of age, ethnicity and geography – are purchasing luxury products means that luxury brands are starting to target their products to different consumer groups. This has not only evolved the identity of many large, established luxury Houses but has also opened opportunities for smaller brands to find their niche. With luxury becoming increasingly more of a “collaborative effort” between brands and consumers, the growing diversity of the luxury clientele has given way to a more complex and interesting luxury market.

The digital-savvy millennial generation has been at the forefront of consumer trends over the past several years and is yet another testament to how the industry has been democratized. In the past, people under the age of 30 were not generally viewed as a core target for luxury. But with the rise of digital communication, luxury brands saw a unique, lucrative opportunity to cultivate future generations of consumers. As brands started to open up a dialogue with younger customers online, the millennial generation began reaping the benefits of the personalisation that came along with it. Soon enough, others followed suit. And in all likelihood, the vast majority of consumer trends that will emerge over the coming decades will stem from the changes that came with the millennials.

Aside from the direct dialogue with brands, a large part of what has attracted luxury consumers to digital is the efficiency of searching for information and buying online. Because of this, consumers have begun to demand and expect more from brands: better services, quality, values and ethics. As such, luxury brands can no longer rely on their names and reputations in order to survive in today’s consumer-driven market; they must adapt their services to match their competitors. Over the past several years, there has been more and more focus put on efficiency and reactivity in customer service.

To stay competitive, it is becoming increasingly important for brands to launch a number of customer-centric services as part of their overall package. “Omnichannel” and syncing CRM databases have been the two largest trends over the past few years. Merging the services and stock of physical and online stores through omnichannel strategies is helping brands provide convenience to customers. Since many brands have their customer data scattered between online and offline retail touch points, many are not able to see and understand customer behaviour in the larger picture. Combining CRM databases would help give brands better insights on consumer desires in order to tailor services to their unique needs. Although these

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two actions may seem like common sense in today’s fast-paced digital era, both involve a number of legal implications that many brands are finding difficult to manage.

Executing an omnichannel strategy can be particularly difficult for brands that manage their online store though an external partner. In order to sync stocks and services, complete cooperation between both parties is absolutely mandatory – which can make this an oftentimes-difficult hurdle to tackle. Merging CRM databases from online sources and physical boutiques often involves working through the various privacy laws in a number of different countries. Thus, legal expertise on an international level is usually required to put this strategy in place.

Though these two strategies pose a number of challenges, it is becoming increasingly important to offer solutions that create a sleeker, more inter-connected and efficient experience for customers. Luxury brands in particular need to focus on offering services that facilitate and encourage purchasing, as many fast fashion brands have already been offering these amenities for some time now.

In addition to omnichannel services and merging CRM databases, it is vital that luxury brands start bringing more of their digital activities in-house in order to protect their image and better serve customers. The first layer of services that can be brought in-house fairly easily is a social media team and at least one graphic designer. A handful of luxury brands still work with external agencies to create and edit their content. Having these two assets in-house is essential to keeping a consistent brand image and being reactive to events, digital trends and potential problems that may emerge. Additionally, as pointed out during the informational interviews, having an in-house photographer to capture candid moments for online use is another important element in creating high quality content within tight timelines on social media.

Next, it is important that luxury brands begin bringing their e-commerce and omnichannel services in-house. In the early days of e-commerce, a large number of companies entered into contracts with agencies to help handle the logistics and technical aspects of managing an online store. However, many luxury brands have found that these agencies are not moving as fast as digital trends and have had difficulties streamlining their services to meet consumer expectations (particularly in regards to omnichannel).

Additionally, many e-commerce agencies do not treat the brand’s image the same way as an in-house team would. Many brands have seen these agencies producing below-par image content, texts for products, packaging and general customer service. Thus, it is vital from both an image and a customer service standpoint for luxury brands to work toward developing in-house e-commerce capabilities. For smaller, independent brands, mustering up the resources to bring e-merchandisers, buyers, and stock management teams inside the organization may not be realistic for the time being. Brands with fewer resources may have to temporarily choose between offering a very limited selection of pieces on e-commerce or taking small steps toward developing internal capabilities, such as creating an e-commerce image team dedicated to creating the visuals and texts for the online store. Larger brands and luxury groups, like LVMH and Kering, have already taken steps toward creating their own group-wide e-commerce support. By

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doing this, the entire group is able to pool its resources together and promote excellence among all the brands.

Once e-commerce capabilities are developed in-house, luxury brands will have more freedom to create original content to further engage their online customers. As Kering’s digital strategist commented: individual brands will never sell like Net-a-Porter. (Additionally, selling like Net-a-Porter is likely not preferable for luxury brands that wish to only offer a curated selection of merchandise online.) This means that brands need to focus their resources not on quantity, but rather on creating an engaging, multi-level shopping experience tailored to their customer. This can include editorial content hosted on the e-commerce site, customized styling suggestions for certain categories of merchandise, and even special packaging for VIP customers.

For luxury brands with strong financial resources, bringing tech teams and developers in-house would be an extremely effective way of improving the brand’s reactivity and controlling its online image. Should problems ever arise on any online platform, having an in-house developer would mean that the brand would not have to wait for an agency to resolve the problem. Additionally, should the brand wish to make changes or updates to its website, an in-house tech team would be able to work quicker than an agency and within a fixed, predictable budget.

In sum, no agency, licensee or partner will have the same consideration or knowledge of a brand’s image as its in-house team. Thus, to ensure future commercial success and image control, it is essential that luxury brands start investing in developing these in-house digital capabilities. The more control the in-house team holds, the better it will be in the long run for the brand. ON LUXURY BRANDS THAT OPT OUT OF DIGITAL:

For luxury brands that have decided to opt out of digital communication seemingly all together, it is still essential to invest in a small digital team for several reasons. Some have likely abstained from social media communication out of fear of overexposure of their brand and products. These brands typically prefer the traditional “top-down” flow of information and for branding purposes create their own “sense of distinction” by going against the grain to attract a certain profile of consumer. For larger brands like Céline, this strategy has proven effective because it has been balanced out with large advertising campaigns and a worldwide retail distribution strategy. However, smaller brands with less notoriety and fewer resources may have trouble staying afloat without digital communication. Staying away from social media is a strategic decision, but it does not mean that it will stop the online conversation around a brand. The risk with not being present online is that the brand’s digital message is essentially left to the public (sometimes resulting in the opposite of the desired effect). Thus, all luxury brands need to take basic steps toward protecting their image online. Brands should execute at least a minimum level of monitoring online communication to gain insights on sentiment, identify key products and to possibly anticipate communications-related problems. Additionally, it is important to track illegal websites and fake social media pages posing as the brand or selling counterfeit products. Partnering with both legal

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teams and online platforms like Facebook, Instagram, Twitter, and Google is essential in regulating these potential complications. Forming partnerships with online influencers is a possible option for brands that do not wish to communicate on social media themselves. Executing discrete collaborations with carefully selected influencers would give brands the power to control online conversation without being directly present on social media. These partnerships could also allow luxury brands to expand their consumer base while cultivating younger customers, which traditional strategies tend to neglect. For any brand, the creation of a website with a store locator, a few curated photos and some basic information about the brand is an indispensable tool. As the Internet is the first place most consumers will look for practical information, offering these basic elements is essential in attracting customers to physical retail stores. Additionally, supporting retail networks through location management on search engines like Google is a vital tool to drive sales. To put these practices in place, it is thus essential that even brands that claim to not partake in online communication invest dedicated personnel within the organization to manage online image. Opting out of mass digital communication is a strategic decision that can help certain Houses carve their niche, but ignoring digital all together within the organization is no longer an option for luxury brands in the 21st century. ON “SEE NOW, BUY NOW”:

With the rise of digital and social media, the traditional rhythm of the luxury fashion industry has been rocked off its kilter. Simply speaking, it makes perfect sense to make collections or pieces that a brand promotes immediately available to consumers once the communication has been diffused. However, as discussed earlier, many fear that this would not only overexpose luxury brands to consumer-driven trends, but would also sacrifice the raw creativity displayed on the runway.

Despite these concerns, it is clear that something needs to change in the way brands communicate about new collections. While putting in place a pure “See Now, Buy Now” model may not be possible or preferable for many brands, there are still steps that can be taken to harness impulsive luxury buying the industry is currently missing out on. Without a complete shift of the fashion week calendar throughout all fashion capitals (Paris, New York, Milan and London), implementing a straight “See Now, Buy Now” model is probably not a good idea for most luxury brands. On the contrary, this strategy will likely prove successful for Burberry due to several reasons. Firstly, the brand has a strong reputation of being a leader in business and digital innovations; being among the first to jump into the “See Now, Buy Now” trend only further engrains this message in the minds of consumers. Secondly, Burberry’s ethos and design are very commercial-oriented and consumer driven – much more so than other luxury brands such as Alexander McQueen or Maison Margiela. This means that it will be exponentially easier for Burberry to anticipate trends and consumer desire. Thirdly, Burberry sells exclusively through its own retail network and will not have to rely on buyers from multibrand stores to stock their collection. Ahead of each

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show, they will have already anticipated their boutique stocks. Lastly, Burberry will likely be able to successfully put in place a pure “See Now, Buy Now” model because they are large, have tight control over all aspects of their business, and have the financial stability to survive even if it is not immediately successful. For brands that are less commercially oriented, have fewer financial resources and sell their products to multibrand stores, a pure “See Now, Buy Now” model would be a poor strategy in terms of both image and financial capabilities. Additionally, the typical client of these brands likely already understands how the system works. At this stage in the game, it will be better for most luxury brands to hold off on a pure model until the entire industry has organized and shifted. Waiting for the shift would lessen the financial risk involved with launching “See Now, Buy Now” and would better ease consumers into the change. In the meantime, there are several different strategies that can be put in place to engage consumers. With select brands launching pure “See Now, Buy Now” strategies, brands who have not yet made the shift will need to be careful about not confusing and frustrating their consumers in regards to product availability. An obvious solution to this problem is to focus on new collections around the time when the products are available to purchase in stores. Unique content can be created by the brand during each of the shows and released six months later when the collection is in retail boutiques. This said, brands would certainly be challenged to create unique content that presents their audience with a different perspective than what has already been released by the press or by bloggers. Another possible solution would be to give an exclusive presentation of the collection to long-lead press and buyers, and then to have a larger consumer-oriented event nearer to the time the collection will be in stores. For luxury brands that would like to test “See Now, Buy Now”, hybrid models would be an effective way to see how the system works for their brand. Launching a pre-order function for select pieces in a collection is a solid first step, even for small brands with fewer resources. Pre-orders would help capture the consumer interest around the time of the show and capitalize on impulsive spending. Additionally, it could allow brands to collect money up front to help fund production of the collection and offer valuable insight into key pieces to help anticipate stock. In turn, pre-orders would be beneficial for customers because it would allow them to secure a desired piece in their size and colour choice. A second hybrid “See Now, Buy Now” model that could prove particularly effective for luxury brands is integrating capsule collections of immediately shoppable pieces into the runway shows. Immediately shoppable capsule collections have already proven successful in the accessories department for brands like Alexander Wang and Michael Kors because of the lack of size restrictions. This would present a strong online communication opportunity for brands around fashion week. Later on when the rest of the collection is available in boutiques, the brand could focus their communication efforts on parts of the collection that were not already featured as part of the pre-order communication. Beyond online commutations and hybrid “See Now, Buy Now” strategies, it is important that brands work to align retail stock with the actual season while waiting for a change in the fashion week calendar. This would allow brands more time to sell

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items at full price (before being marked down at the end of the season). Additionally, it would ease much of the confusion and frustration experienced by customers because it would allow them to immediately wear the clothes they can buy in retail stores.

The shift toward “See Now, Buy Now” is inevitable. Perhaps once it takes place across the fashion capitals, it will not resemble what we initially imagined it might, but the financial opportunity associated with changing the retail and fashion week calendars is too substantial for luxury brands to entirely ignore.

Many in the industry are still hesitant about “See Now, Buy Now” because of purely image-related reasons and the potential over-commercialization of luxury in general. However, one must acknowledge that the only category of the luxury fashion industry that is entirely aligned with its selling season is revered by many as being the most creative: Haute Couture. Producing an Haute Couture collection is oftentimes a strategic, image-related decision for Houses. However, there is almost always a commercial aspect to it. Private clients are very often invited to shows and brands offer services to these clients to entice them to immediately commission Couture garments. Haute Couture has functioned as such for several decades – and for the industry’s Couture giants like Chanel, Dior and Elie Saab, has had notable success.

Those in the industry who fear that “See Now, Buy Now” would subject luxury brands to consumer-driven trends are correct to a certain extent. It would require brands to put a stronger focus on considering what their customer wants because of the financial risk involved with pre-producing a collection before the runway show. However, editors and stylists would still be the ones deciding which pieces are featured in magazines and buyers would still determine what goes into stores. This said, is it such a bad thing for luxury brands to have more consideration about their customers? In the long run, it will likely contribute to more sustainable financial success, and if executed correctly, re-affirm brand image. ON MEASURING SUCCESS & EFFECTIVENESS:

A large part of social media for luxury brands is about cultivating brand awareness and communicating an image. This makes measuring the impact of social media directly on sales particularly difficult because sales are not necessarily the immediate goal of all social media activities. There is no sure-fire way to measure the full extent of social media on a brand’s bottom line, but there are many things brands can do to get a clearer idea of how the two are linked. Measuring the impact on sales, however, is not a challenge specific to social media. Many industry professionals have cited the difficultly for brands to measure the full impact of traditional advertising and communications campaigns, particularly with the influence digital has on the industry today. (Some even note that the impact of traditional advertising specifically on consumers is more difficult to measure than social media.) While social media is often seen by top management as a powerful selling tool, it also needs to be viewed by luxury brands as an important storytelling tool that works toward cultivating both current and future clients and building desirability in the

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long-term. Using social media, Houses can communicate to a larger audience the narratives, values and aesthetic codes unique to their brand. Mindshare cites four key elements that need to be considered when creating content to promote a brand’s image online: Building suspense (through teasing events and product releases), Fostering aspiration among future consumers, Driving empathy across followers on social media to engage with the brand, and Harnessing emotion to inspire people to interact with the brand. 28 In order to effectively build a social media strategy around these four pillars and to judge its success, communication between various in-house teams is absolutely essential. Additionally, it is important that the methods of measurement be tailored specifically to the brand’s capacities and needs. Beyond direct use for the social media teams, developing a coherent system is vital to help justify social media budget allocation to top management. In order to receive budget, it is important that the community management teams can prove that they are actually bringing customers to the brand.

On a basic level, this can involve developing benchmarks against competitors (both direct and aspirational) and using some basic social media insights tools. However, it is fundamental that social media be considered in relation to every aspect of an organization in order to fully measure the success of a company’s digital strategy. This means putting in place a system that allows a more fluid flow of information between all different departments within a brand, particularly with retail, sales, marketing, design and digital teams.

It is vital for social media teams to have more interaction with the company as a whole in order to draw links between what is being communicated online and what is selling in stores. Using this information not only helps measure success of current campaigns, but also is incredibly important to consider when designing future digital projects.

In addition to improving the flow of communication, it is important to build digital competencies across the company by educating employees on the basic concepts of digital communication. The more informed a company is as a whole on the general outline of its digital plan, the more online communication will be considered and integrated into the overall strategy. This can be done simply through workshops, presentations or meetings with the brand’s social media team.

Implementing a pre-order function just after a fashion show is just one example of a situation where communication between teams is extremely important. To make this happen, it is vital that the e-commerce team liaises with the brand’s commercial team to define which pieces are to be offered for pre-order. The brand’s design team will also need to give their input on which “image” pieces should be included in the pre-order selection. E-merchandising teams will need to work with editorial and photo teams to decide how to capture and display the items online. In-store merchandising teams could even possibly be involved to promote the pre-order to clients in physical boutiques. And finally, social media teams will need to be involved with each of these departments in order to develop an effective communication strategy to promote the pre-order once it is available to customers.

28MindshareLuxury,January2016,TheLuxuryReport

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The idea of a total redesign of the internal communication structure may seem daunting to many brands. However, there are a few practical solutions that can be put in place immediately to measure success on social media. Social media teams can begin by designing goal-driven measurements for online campaigns. This would involve defining the specific goal of a communication plan during its design. For example, these goals could be to support brand image, increase conversion rates on the online store, or to increase sales in retail stores. For an image-oriented campaign, success would be measured by insights related to exposure and popularity, such as likes, comments, shares, follower increase, and sentiment. For commercially oriented campaigns, some basic communication between a brand’s social media and retail teams would be helpful to draw a link between what was posted online and what sold in stores. However, this can also be measured behind-the-scenes through tracking the online analytics of the brand’s e-commerce site. Matching the right campaign with the right metric would help to resolve some misunderstandings top management tends to have when attempting to draw a link between social media and the bottom line.

Experimentation with different mediums and forms of content is another way to compare and measure success. This can be particularly difficult for luxury brands because of the constant pressure to share flawless content. However, experimentation within reason is an extremely helpful way to design and improve future campaigns and a vital method to continue innovation. Brands can also work toward building models through experimentation that would help them predict the success of future campaigns by comparing them to former initiatives.

Lastly, it is incredibly important that luxury brands begin allocating budgets to invest in social media performance measurement, listening and benchmarking tools. In 2015, Forbes cited that most companies only allocated 2.3% of their total social media budgets to measuring effectiveness29. Many of these tools provide helpful insights that a social media team alone could not collect. They are also incredibly helpful in generating reports for management and can aid in supporting reasons why budget should be allocated to digital activities.

CONCLUSION The invention and rise of the Internet is likely one of the most democratic phenomena in human history. Beyond the fashion and luxury industry, it has facilitated access to information and promoted conversation between diverse groups of people across the globe. Digital communication has shattered previous barriers to information and in many ways disproves Bourdieu’s theory about the “illegitimate” nature of

29Newman,Daniel,19April2016,“HowSocialandDigitalCreatetheNewRetailExperience”,Forbes,shttp://www.forbes.com/sites/danielnewman/2016/04/19/how-social-and-digital-create-the-new-retail-experience/#d2f3eee4386b

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“autodidacticism” (self-teaching). “A work of art has meaning and interest for someone who possesses the cultural competence, that is, the code, into which it is encoded,” Bourdieu cites in Distinction30. Through online mediums, the general public has had the power to self-educate on a variety of topics. More specifically for the fashion and luxury industry, brands now have many more outlets on which to communicate their codes to consumers, who in turn have an increased appreciation for their craft and products. This has provided brands with the power to find ways to stand out in the saturated luxury market. Because of digital, the “code” to understand luxury is now widely available to all who seek it.

Digital mediums are consulted more and more regularly for professional and “legitimate” educational means. As such, society in general has placed less focus on “institutionalized” learning and has begun to even revere self-teaching with a certain level of respect. Additionally, digital communication is creating a sense of casualness among consumers who are exposed on a daily basis to brand messages via social media and other online platforms. This level of casualness around luxury previously existed only among the small percentage of the upper classes and those whom had grown up in “luxury” environments (created by the consumption of luxury goods by their family and social circles). Digital communication is now creating a more engaged and ingrained relationship between a much larger number consumers and luxury brands, which is helping to cultivate future generations of clients.

With various online influencers contributing to the digital conversation around brands, there are no longer “strict norms of interpretation” related to the aesthetic values of luxury goods. This has both given and taken power away from luxury brands in terms of communication. On one hand, there are more people posting and publishing their opinions about brands in the digital sphere; it is impossible for any brand to track and control all of this communication. On the other side, brands that embrace digital are equipping themselves with the power to influence online conversation both through diffusing their own messages and through working with key digital influencers.

Despite whether or not luxury brands feel that digital communication is

harming or helping their industry, digital communication is for all practical purposes here to stay. The invention and rise of the Internet and mobile phones has fundamentally changed the way the world works and how people interact. And barring the most extreme circumstances, this will continue to be.

Given the evident importance of digital communication (and particularly social media) in the 21st century, luxury brands are being forced to harness online mediums to thrive in today’s market. Despite the perceived threat that digital may pose to luxury, it is now likely the most effective tool in ensuring image control for luxury brands. Additionally, when used correctly, digital can help promote and grow a brand’s desirability in the long run by opening a continuous dialogue with their clientele and communicating on their unique narratives, values and aesthetic codes. Cultivating younger audiences through digital will help luxury brands ensure financial success in the years to come.

30Bourdieu,Pierre,Distinction,PageXXV

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Generally speaking, brands need to start to put as much focus on ensuring the quality of their online touchpoints as they have historically done for their offline touchpoints. In parallel, it is important for a number of brands (particularly large heritage brands) to take a step back and re-evaluate their current digital strategy to avoid overexposure and a possible decrease in desirability among consumers. A brand’s digital strategy needs to be imagined as a piece of a larger puzzle, taking into account everything from pricing and distribution to design in order to protect the brand’s perceived sense of rarity.

Part of the challenge of managing luxury brands online is the vast nature of digital communication in general. Brands now have many more outlets to consider when designing an overall strategy. Public relations, marketing and advertising techniques will continue to integrate digital into their strategies to make the largest impact possible. The most successful brands in the future will take a step further, integrating digital into all aspects of their business model – from pricing and distribution to even possibly design. Digital has undoubtedly made the luxury and fashion industry more democratic and has provided an outlet for younger brands to become more relevant more quickly than ever before. This has resulted in a swift increase in competition across the industry. Luxury’s titans are now being threatened by smaller emerging brands and, as a result, are having to adapt and rethink all aspects of their strategy. Thus, luxury brands can no longer rely on their reputation and heritage to be successful. New demands are being put on all aspects of the business from design and communication to reactivity and efficiency.

From a consumer point of view, digital has overall created much more choice and better services. The increased visibility of brands online has given way to more competition among companies. As a result, the constant battle to offer better services has been extremely beneficial to the luxury customer.

Though many have worried over the years that e-commerce would threaten brick and mortar stores across all industries, new trends in luxury show that the two channels can compliment one another through omnichannel services. Integrating physical and online retail stocks is one of the major ways brands are evolving their customer service strategy to be competitive in today’s market and to provide ease in the shopping experience.

With the rise of social media, the luxury consumer base has expanded and become exponentially more diverse. This has resulted in growth of the luxury industry as a whole and has created more niches of diverse consumers to be served. Since there are so many more consumers of luxury goods than in the past, customers are also seeking out new ways to find their sense of distinction within luxury. Unapologetically expensive, highly exclusive products are expanding while “rebel” brands are being worn with a badge of honour by small and diverse groups of consumers.

Digital communication and social media have posed one very important challenge to the fashion and luxury industry as a whole. Because brands are so much more exposed online, customers are regularly seeing lots of products shown in fashion shows and look books that are not immediately available for purchase. The

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industry, as a result, is missing out on very lucrative, impulsive purchases influenced by digital.

“See Now, Buy Now” is challenging the traditional model of luxury, which many seasoned industry professionals are taking a negative view toward. While many fear that aligning the retail and fashion week calendars would subject brands too much to consumer-driven trends, the fact that the industry is even having the conversation shows how the times have changed. The luxury industry, whether it likes it or not, is much more subject to consumers than it was in the past.

While a pure “See Now, Buy Now” may be logistically and financially difficult for brands to put in place today, the industry is showing signs of accommodating this particular consumer demand. “Hybrid” models are being tested by smaller brands while the industry’s titans are starting to experiment with a complete shift. The industry as a whole will likely make a more collective shift toward “See Now, Buy Now” in the future, if only due to the potential financial gain. For most brands, a move toward a pure model will need to wait for this industry-wide change to ease the financial risk.

“See Now, Buy Now” challenges the classic “trickle-down” pyramidal model of luxury and fashion – but it is only one piece of a larger puzzle. Trends over the past decades have long indicated a more diverse flow of trends from the street up to designers. While it makes brands more subject to the demands of their clientele, luxury will in all likelihood continue to create desire through design, quality and innovation.

In addition to “See Now, Buy Now”, the industry remains vastly split on how to

measure the effectiveness and the impact of social media activities on sales and overall image. The luxury industry lacks a widely accepted measurement of success in part due to the relative newness of social media. Thus, it is vital for brands to create their own measurement of success, tailored to the company’s unique capacities and needs.

Though there may be no sure-fire way to fully measure the complete impact of social media on a brand’s business and image, the most effective way to gain clearer insights is to create a better flow of communication between digital teams and all other departments within a brand. Additionally, educating and spreading digital competencies across a company can help greatly with integrating social media and digital into the full spectrum of its activities.

Internally, companies need to focus on building their own digital capabilities in order to meet the demands the 21st century market is now placing on brands. In addition to educating employees on the importance of digital, more resources need to be dedicated to building in-house competencies, particularly for social media, website and e-commerce management. Bringing these functions in-house will help brands reduce reaction times, give them more control over their image and allow them to coherently measure and understand their digital strategy’s success and impact on consumers.

In-house competencies have long been developed for traditional advertising, press and image purposes. Now is the time for brands to begin investing more

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heavily in digital, which has overtaken all of these activities in influence and importance.

In many ways, in-house “savoir faire” is the essence of luxury. When related to product development and design, luxury Houses have had a long history of bringing manufacturers and craftspeople in-house by either creating new departments or buying external suppliers. Luxury now needs to consider digital a key element to bring in-house, if only for image-related purposes. Working with too many digital partners can be compared to the licensee fiasco that ruined the image brands like Pierre Cardin and Calvin Klein in decades past. Too many moving parts can be hazardous for image and quality control. And at the end of the day, no partner or licensee has the same consideration for a brand’s quality and image as its in-house team.

“Digital savoir faire” is the next form of expertise for luxury Houses to develop. To ensure the success of luxury in the 21st century Digital Era, brands must bring “joy, desire and exquisitely crafted execution” 31 to digital communication, as they have long done for all other aspects of their business.

31Singh,Daljit,LuxuryMustTakeHoldofItsDigitalDestiny”,BusinessofFashion,http://www.businessoffashion.com/community/voices/discussions/is-fashion-missing-the-technology-revolution/op-ed-luxury-must-take-hold-of-its-digital-destiny

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Zaczkiewicz, Arthur, 30 September 2015, “Enlivening the In-Store Experience With Digital Displays”, Womenswear Daily, viewed 30 May 2016 http://wwd.com/retail-news/department-stores/digital-displays-kiosks-retail-10247170/

Zaczkiewicz, Arthur, 20 April 2016, Data Points, That’s Rich, Womenswear Daily

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ANNEX

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INTERVIEW NOTES: VALENTINA BUSI Current Position: Head of Web & E-commerce at Marni Previous Positions: Digital & E-commerce Manager at Sergio Rossi Date: 7 June 2016 Desirability of Luxury in the Digital World 1. Do you believe that social media has made fashion/luxury brands more or less desirable? If you think it is making brands less desirable, how would you suggest brands combat this problem in the future? Social media made fashion brands more desirable and allowed customers to approach luxury in a fresh and brand new way. Editorial contents are source of inspiration and products become more familiar to the customers. 2. Do you believe that social media is now a mandatory tool for luxury brands? What do you think of brands like Celine who do not use social media? The choice to open social media profiles is linked to the communication strategy of the brand. Social media are a new communication channel that encourages to build a direct relationship with the brand. 3. How can luxury brands tailor social media to their sector? It depends to the brand’s philosophy, should reflect the DNA of the brand. Consumer Behavior 1. How do you believe social media has impacted consumer behavior in the luxury industry? I believe that social media give more exposure to the luxury products and thanks to new functionalities –such as shopable button- it’s easier to buy. 2. Do you think that e-commerce threatens the brick and mortar shopping experience? On the contrary, e-commerce and traditional stores can benefit from each other. Customers today have a multichannel shopping approach, the purchase process often starts online and ends in store and vice versa. 3. Do you think that digital can be used to enhance the in-store shopping experience? Digital tools/supports create a 360° brand experience for the customers that visit the stores. Digital campaigns give the unique opportunity to create an interaction that continues through digital activation also when the customers exit from the stores. Challenges 1. What do you find to be the biggest challenges in developing an effective digital communications strategy for a luxury brand? The biggest challenge is be reactive and share on time the right contents, at the same time is important to quickly embrace new trends and constantly monitor and moderate the community. In a winning social media strategy, the communication department should be aligned in order to create a storytelling tailored on social media platforms needs. Last Few Questions 1. What do you see as the biggest obstacles today for digital communication in the luxury industry? The biggest obstacle is change the inner culture of the companies and their approach to traditional communication media. Sometimes, it takes a while to accept the social media challenges, such as unveil contents before the show begins or give a preview of the collections.

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INTERVIEW NOTES: ALICIA CASADO Current Position: Communications officer at OTB Group Date: 3 June, 2016 Desirability of Luxury in the Digital World 1. Do you believe that social media has made fashion/luxury brands more or less desirable? If you think it is making brands less desirable, how would you suggest brands combat this problem in the future?

• Social media is all about desire, users want to know more about celebrities, they want to see more from them, use the same products, share them with their friends so they feel like they are celebrities too, etc.. But it depends on the way brands use their social media, if a luxury brand is sharing low quality content in their social media accounts this can have a negative impact on the consumers used to a prestigious image of the brands on commercials and stores.

• Desirability can be negatively impacted if you have a very high quality image offline, but online your image is not as strong.

• Low quality content can be damaging to luxury brands 2. Do you believe that social media is now a mandatory tool for luxury brands? What do you think of brands like Celine who do not use social media?

• Social media is not a mandatory tool for luxury brands – however, these brands need to be present in some way online.

o When people are looking for information, they no longer to go physical stores or simply ask their friends – they look for information online.

• A brand like Celine can survive well without social media because they have a huge print advertising budget.

• For a brand like Goyard [who is not very present online], their bags are very identifiable and are embellished with the brand’s logo – each time someone carries a Goyard bag, it is like they are getting free advertising on the street.

• For Goyard and Celine, these elements help make up for their lack of digital presence.

3. How can luxury brands tailor social media to their sector? • Including digital communication in the global strategy to have a coherent image on

and offline and sharing quality and original content reflecting the brand’s codes and identity without being too commercial.

Consumer Behavior 1. Do you think that e-commerce threatens the brick and mortar shopping experience?

• E-commerce and physical retail complement one another. Sometimes people go online to research a brand or product before going into a store to purchase it. Sometimes customers go into a store to view a product and eventually buys it online.

2. Do you think that digital can be used to enhance the in-store shopping experience? If so, how?

• Yes. For example, Zara offers a service where the customer can go online to check the availability of a product in a certain store and have it delivered for pick up to the cash register of the selected store (it takes only 20 minutes). While they are waiting, they can also continue to shop and may buy other products.

• Ipads can also help sales assistants find sizes or order products unavailable in store to be delivered to the customer’s house.

3. Some luxury brands like Burberry and Tom Ford are shifting their fashion week calendars to align with their retail calendars. Do you believe that this is a choice that would work well for most luxury brands? Why or why not?

• Brands do a lot of communication about collections around shows. By the time the clothes are actually in stores, people are already tired of it.

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• The time gap can create desire. However, at the moment, this gap is too long (5-6 months). Brands need to be more realistic.

o Fast fashion companies like Zara are copying pieces before designer brands can get their collections into stores.

o Consumers are used to fast everything. If they have to wait too long to buy a piece from a designer, they might even decide to buy it from Zara instead.

• Shopping is also a very impulsive act. Lots can happen in the 6 months people have to wait for a piece from the runway to be available in stores (pregnancy, weight gain, find another product…)

Measuring Effectiveness: 1. How can fashion/luxury brands measure their success on social media? Should success be measured differently for different platforms?

• Can measure effectiveness by drawing the link between content posted online and products sold in stores

• Can also measure via engagement, likes, comments, shares… • Should have different goals for different social media platforms

o Instagram – beautiful content, artistic o Twitter – brief news bites o Facebook – Videos and other large content o Brands have to note that not all customers are present on all social media

platforms. Communication should be tailored accordingly. 2. How can brands measure the impact of social media and other digital communication activities on sales?

• Can compare sales year to year versus the investment made in online communication o However, many other factors may affect this (depends on the collection,

distribution, etc). • Brands actually have this same problem with print advertising. But now, fewer people

are buying print magazines, so it is becoming less effective. o On the other hand, you can measure how many people viewed an image or

clicked on it online/on social media. (you cannot measure how many people saw a print add)

o Some brands even use tools for online ads which track user clicks Challenges 1. What do you find to be the biggest challenges in developing an effective digital communications strategy for a luxury brand?

• Luxury brands for a long time have been too reluctant to develop in digital – they are only now beginning to seriously invest in it. They are very far behind in developing digital capabilities from brands like Zara and H&M.

• Digital communications is very different for luxury – they have to be commercial, but in a way that is adapted to their market by using high quality content for a targeted public.

2. Do you think there is a gap in many luxury brands’ quality of online and offline experience? (For example: experience on a brand’s social media pages versus the quality of the in-store experience). How can brands harmonize the image of their online and offline “touch points”?

• Absolutely. There is a big gap between the image of many brands’ offline and online touchpoints.

o The way products are displayed in store versus the way they are photographed for online use, poorly written e-commerce product descriptions, textures not visible from photographs…

Influencers

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1. Who do you consider to be the most influential people in fashion today? (Types of people/positions or the specific people themselves) Do you believe that the profile of trendsetters has changed over the last decade?

• As a fashion insider: fashion editors and journalists, as well as bloggers to be the most influential people.

• For consumers: major celebrities • Fashion is a bit contradictory because there is a lot of change happening constantly in

the design world, but when it comes to trendsetters, the group of the biggest influencers has not changed much (Carine Roitfeld, Ana Wintour, Suzy Menkes, etc… these people are still extremely powerful and have been for over ten years).

o However, lots of newer online influencers are being invited to shows, paid to post content on social media, etc.

2. How do you think bloggers have influenced the way fashion/luxury brands communicate online? How do you think bloggers have influenced the way customers and fans interact with fashion & luxury brands?

• For customers, garments/pieces can be more desirable when they are seen via an online influencer (this is why brands pay for collaborations or pay them to post on their social media platforms)

• Today, everyone feels a bit famous because of social media Last Few Questions 1. Do you believe the luxury industry is still reluctant to embrace social media? Why or why not?

• Absolutely. Luxury Houses have done things the same way for a very long time and are reluctant to change. Digital is much more important now than what they originally thought.

2. What do you see as the biggest obstacles today for digital communication in the luxury industry?

• Building a coherent image online and offline • Promoting products without being too aggressive or commercial

INTERVIEW NOTES: MARINE CHAPUIS Current Position: Digital Strategist at Kering Date: 4 June 2016 QUESTIONS: Desirability of Luxury in the Digital World

1. Do you believe that social media has made luxury more or less desirable? If you think it is making luxury less desirable, how would you suggest companies combat this problem in the future?

2. Do you believe that social media is now a mandatory tool for luxury brands/groups? What do you think of brands like Celine who do not use social media?

3. How can luxury tailor social media to its sector? Consumer Behavior

1. How do you believe social media has impacted consumer behavior in the luxury industry?

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2. Some luxury brands like Burberry and Tom Ford are shifting their fashion week calendars to align with their retail calendars. Do you believe that this is a choice that would work well for most luxury brands? Why or why not?

Challenges 1. What do you find to be the biggest challenges in developing an effective digital

communications strategy for a luxury group/brand? 2. Do you find that there is a gap between the experience of many luxury brands’ online

and offline “touchpoints”? (For example: experience on a brand’s social media pages versus the quality of the in-store experience). How can brands harmonize this image gap?

Last Few Questions 1. Who do you consider to be the most influential people in fashion today? (Types of

people/positions or the specific people themselves) Do you believe that the profile of trendsetters has changed over the last decade?

2. Do you believe the luxury industry is still reluctant to embrace social media? Why or why not?

3. Are companies having to restructure their communications / marketing departments to account for digital’s increasing importance? How so?

4. What do you see as the biggest obstacles today for digital communication in the luxury industry?

RESPONSES

• Digital enhances the reputation of a brand (of course, social media can destroy a brand)

• Being present on social media helps brands manage their reputation by o Putting out their own messages on their own social media platforms o Feeding the online conversation about their brand

• Balmain as an example o Lots of social media activity about the creative director, not enough about the

brand o Too much personal branding of Olivier Rousteing and not enough focus on the

brand – not a positive way to use social media • Now more than ever there is a lot of distance between brands and their

designers/creative directors o Before, the brand + the designer were one entity

• Brands in the future will need to control the image of designers on social media as a communications strategy

o Brands should put out guidelines / takes some control of their creative directors’ presence online

o Discrepancy between the brand’s vision and designers’ personality is ruining brands’ reputations

• Models and other partners also have a role in the brand’s reputation • People now want to find value in brands – there is a new creative wave of bringing

the importance of the brand back o Chanel is good at this

! Lots of communication on the brand itself, building dream behind the brand & its DNA, controlling its online image

o Hermes – not so good at this ! No image control online

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! Storytelling is good, but there is no corporate communications office that helps mitigate PR/Online Communication problems like what they had with the crocodile skins used for the Birkin bags a while back

• Online influencers can be a powerful tool for brands o Most brand social media pages don’t get a lot of engagement, but influencers

do o People tend to listen more to influencers than they do to brands o Most people are aware that these influencers are being paid to post / for the

collaborations they do with brands ! Some brands try to keep this discrete ! Others have begun to be more up front about it (since people are

already aware of it) ! Either way, the brand needs to have a good rapport with the influencer

for the collaboration to be successful o In China – it is very transparent that influencers are being payed

! Many Chinese consumers couldn’t understand why bloggers in Europe and the US would collaborate with brands without being paid.

! Chinese consumers seek out recommendations from influencers before buying

• Very powerful tool for brands to work with influencers in China for this reason

• New online communications trend: “Story Doing”

o People are sick of hearing stories / story telling online (there’s too much of it now)

o They are seeking out ways to see how the brand is “in real life”, but online o Many brands (like Gucci, Dior, and Chanel) are beginning to create events

(like resort shows in Cuba or at Westminster Abbey) to enable people/influencers to post online about the brand

o The brand provides some guidelines to people ! For example: A hashtag for the event, sometimes will ask people not to

post online before the event begins o Helps give the brand more legitimacy/ a better reputation when its other

people talking about them online

• E-commerce o Kering’s strategy is to not propose all products online (only about 33%)

! This is done so that people don’t get lost on the e-commerce site ! A curated selection of products – emphasis on “it” products ! Recognition that online is different from offline

• Stores are better at storytelling than online • Large focus on omnichannel strategies + customer service • Have taken the Amazon model and adapted it to the luxury

market o Emphasizing rarity o Of course, there is always the question of putting

discounted products online ! Luxury brands know that you have to sell online

• The question is now to do it differently from wholesalers

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! Customer service a key aspect of selling online – added value of online shopping

• Tailored packages • Phone lines available for customers to call and get help • Hand written notes

o Kering has developed a retail excellence department ! Works on online and offline retail ! Is focused on going back to the basics of the original model of luxury

selling • Back in the day, salespeople in the boutiques knew each of

their clients (by name in many cases) • Then, there was an increased focus on volume and this aspect

got lost • Now, brands are starting to re-acknowledge the importance of a

personalized experience • Waitlist system has been abandoned (when people see a

product, they want to buy it now) ! Special invitations for VIC (Very Important Customers)

• To restaurants, the opera, parties • This has proven to be effective – people buy more

! Brands must accept that they won’t sell like net-a-porter • Need to invest in tailoring service on their websites and

developing relations and collaborations with influencers o Example: Chrstopher Kane

! No website, only an Instagram account ! They thought that they looked “old” compared to other brands. In fact,

it was actually a great strategy – they were different from other brands because of their lack of online presence

! Now they have a website (essential) ! They still feel that they don’t have the resources to develop a full online

communications strategy, so they are holding off on social media for the time being

o 2 years ago brands were simply adopting what they did offline for online ! This model didn’t work ! Brands need to have a tailored strategy for social media

o Now brands are beginning to develop Digital Brand & Image teams to tailor online communication to the right audiences

• See Now Buy Now

o Some Kering brands will start doing this soon: Balenciaga, Bottega Veneta (and possibly Gucci)

o There are 2 schools of thought (modernist vs conventionalist) ! One is big brands with big production (like Burberry) who want people

to buy straight from the catwalks • They have the resources to put out the production right after

the shows ! The second is “Traditional Luxury” which is still dedicated to the idea of

making people wait and do not want to change the current model (want to avoid being too fast fashion)

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o In order to put a see now buy now model into place, you need to have the right teams & enough resources

o Back in the day, brands used to have 2 shows ! One for the client – the brand would adapt production based on what

the clients wanted ! The second was for media – which was not as important then as it is

now o Now, everyone sees the catwalks immediately and the brands are getting

direct feedback from their audiences ! The “media” is now social media

o Kering surveys online conversations around the brands’ shows ! Tracks certain pieces to recommend to brands which product lines

they should develop and distribute ! Analyse online, social media and traditional press conversations

o Brands are seeing that as soon as a new collection comes out, people just start to forget about the old collection

o Social media is a big reason for why see now buy now is being tried o Many brands are going to wait to see how it works for Burberry in September

before jumping into it – many brands still not sure how to make it work o Will be difficult for small brands, who have more reactivity, but less people to

put this in place o Possible solution is using hybrid models o Brands are beginning to recognize that the “stakeholders” of luxury have

changed ! It is no longer buyers who control everything (buyers are no longer

“filters” for consumers) ! The power is moving to the consumer ! Because of social media – everyone is a stakeholder

o Many luxury brands are still very wary about giving this sort of power to consumers

! How far is too far? ! Many still believe in “top-down” brand awareness

• Trends in branding

o Maison Margiela has a very luxury reputation because many consumers don’t even know about it

o Brands like Margiela resonate with consumers because of their values and identity

o Younger generations are looking for these values, heritage, identity, nationality, & culture in brands

o In China, the younger generations are turning back to local Chinese luxury brands and are starting to look to buy more local

o Rebel brands are seen as cool (vetements, jacquemus) ! Consumers are buying something unique, something few people know

about ! The idea of distinctive products, “tailored for you” ! People are getting away from mainstream and seeking exclusivity in

this way ! Lots of focus being put on craftsmanship and the creation process

o There is now a big dividing point between luxury brands

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! “Big luxury” will continue seeking its mass market position o Smaller brands will develop their exclusivity and identity (example: Alexander

McQueen)

• The gap between Online and Offline image o There is a big gap, particularly between service in boutiques vs service online o Example: Botegga Veneta

! Physical stores don’t feel as luxe as online because they feature a bit of an outdated selection of merchandise

! Online, the brand is good about communicating about key products o Lots of physical stores are suffering from a deficiency in knowledge about

brand and products ! Lots of turnover, employees don’t feel attached to the brand ! Takes a lot of time to properly train someone in the history and

craftsmanship of a brand ! Many brands are now investing in “retail excellence” to solve this

problem o Saint Laurent is an example of a brand with perfect unity online and offline

! One experience people get via all touchpoints o Over the last several years, there was very quick expansion among luxury

brands in China ! When the Chinese market was booming, brands focused their

communication and marketing efforts on China ! Now the Chinese market is retracting and brands are having to tweak

their strategies to focus more on European sand Americans MEETING NOTES: EVA CHEN Current Position: Head of Fashion Partnerships at Instagram Previous Position: Editor-in-Chief of Lucky Magazine Date: 6 March, 2016 Instagram Marketing opportunities-

- We can work with the Instagram team to buy "black" posts that can show up in the feeds of certain regions near our stores (Miami, SF, LA etc.) with certain Instagram lists we can choose from (i.e. Netaporter list) but it won't ever show up in the main Margiela Instagram page or account or feed. This could be a great way to drive traffic to our boutiques in the same way Paris has been using targeted facebook ads for their stores which I think we should do in the US too.

- Eva will verify the MM6 account for us Instagram intel and suggestions from Eva- Content that gets the most likes and increase traffic

- Things in abundance- abundance images attract a huge amount of attention. (ex- a row of 100 of the same shoe with different heels, or same shoe or rows of blouse blanche on a rack)

- -Detail shots with a description with behind the scenes info tend do to better then full runway shots. If we do post full runway shots then if we want to see more traffic it is

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best to include a long in depth description with a blurb telling the story of the look (inspirations descriptions etc).

- Storytelling is what works best with luxury brands - Note: while a longer paragraph may seem to be a risk in turning people off it is zero

risk because people only see the first few lines and those that want to read more have the option to open the paragraph.

- When people feel that they are getting the inside story and more personal details about the brand and what is happening at the headquarters

- Consistency is key! It is very important to post at least once a day at the minimum and to post everyday! She said brands that do best on Instagram have a weekly calendar and stick to it. For example, every Monday might be Margiela Monday and then every Tuesday might be something specific like a detail shot from inside the Maison with a history description.. It can be whatever we want creatively and how we want to do it…

- Brand ambassadors- luxury brands are finding it successful to pick one or a few brand ambassadors that they work with to post their product in a way they feel can control and feel comfortable with but seems authentic. These ambassadors then post product in interesting ways and gaining further reach for the brand without having to appear or interfere on the brands main Instagram feed or the look of the account.

- **INSTAGRAM FRANCHISING – Theme for each day of the week. Helps to organize editorial calendar and insure consistent content

Content that get less likes and decrease traffic

- Product showcased in an ecommerce way - Instagram bald spots – don’t post numerous shots one day and then no shots for 3

days EMAIL INTERVIEW: LAURA COHEN Current Position: International Corporate Communications Manager at Boucheron Previous Positions: Digital Communications at Kering Date: 7 June 2016 Desirability of Luxury in the Digital World

1. Do you believe that mass digital communication has made luxury brands more or less desirable? If you think it is making brands less desirable, how would you suggest companies combat this problem in the future? Are luxury brands today too ‘accessible’?

a. Je ne pense pas que l’utilisation des plateformes digitales ait eu un impact néfaste sur la désirabilité des marques. Bien au contraire ! Si la communication digitale est bien effectuée, alors elle ouvre la porte à de nouveaux prospects. Pour moi, l’ouverture des marques de luxe sur le digital a été vecteur d’une chose unique : l’utilisation des codes du luxe par d’autres marques, plus accessibles. On a souvent parlé du retard des marques de luxe en communication… je ne suis pas tout à fait d’accord avec cette théorie : Burberry, Marc Jacobs, Hermes… sont des marques qui ont été des leaders sur le digital, et ont ironiquement influencé le reste des marques.

2. How do high jewellery brands tailor online communication to their sector? a. Les marques de joaillerie ont toutes une approche différente des réseaux

sociaux, mais on remarque deux constantes : ils permettent de communiquer sur des visuels de « savoir-faire », et de faire entrer dans les coulisses de la

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création d’une pièce. Ils sont aussi le meilleur moyen de véhiculer des photos des pièces portées par des célébrités lors d’occasions exceptionnelles. La part de rêve est très importante.

Consumer Behavior

1. How do you believe digital communication has impacted consumer behavior in the luxury industry?

a. Pour moi, le digital n’est qu’une fenêtre sur le changement sociétal profond que nous sommes en train de vivre depuis une dizaine d’années et qui bouleverse le paradigme de la suprématie de l’objet. Les consommateurs ont besoin de ré-enchanter leur consommation et de ré-enraciner leur comportement d’achat dans de nouvelles valeurs fondées sur le savoir-faire, l’histoire, et de créer un lien fort avec la marque. Le digital a été pour moi une des réponses à cette transformation sociale. Avec instagram, la théâtralisation de la consommation et de la possession de l’objet est devenue la norme.

2. Do you think that social media can be used to enhance the in-store shopping experience for Houses like Boucheron? If so, how?

a. Le digital peut en effet entrer dans les boutiques et aider à l’acte d’achat. Dans nos vies quotidiennes nous ne faisons que mélanger la réalité avec le virtuel. C’est une transformation en marche qui, je pense, deviendra une norme dans tous les boutiques. Cela peut passer par des écrans tactiles dans les boutiques qui apportent de l’information ciblée à un prospect, par un logiciel permettant de customiser sa bague en boutique, ou encore par de la réalité augmentée qui plonge le prospect dans les ateliers par exemple… Des possibilités infinies sont à étudier.

Measuring Effectiveness

1. How can luxury brands measure their success on social media? a. The rate of engagement is key for a brand. The quantity of “fans” is of course

important, but we want our fans to engage with us and to speak about us. Challenges

1. Do you think there is a gap in many luxury brands’ quality of online and offline experience? (For example: experience on a brand’s online content versus the quality of the in-store experience). How can luxury brands harmonize the image of their online and offline “touch points”?

a. Les marques de luxe ont toujours été très attentives à l’accueil en boutique, et à l’expérience d’achat. C’est d’ailleurs pour cela que de nombreuses marques de luxe hésitent ou ont longtemps hésité à investir dans la vente en ligne. Une des valeurs du luxe repose sur la qualité du service et de l’humain. Mais je pense que cet écart entre online et offline tend à se réduire car les marques de luxe ont compris que le online devenait un pendent de l’expérience offline du client, et que l’un n’allait plus sans l’autre maintenant. La complémentarité des deux est primordial. Un des challenges est maintenant de former les vendeurs à ces nouveaux canaux de communication !

Influencers

1. How do you think bloggers have influenced the way customers and fans view and interact with fashion & luxury brands?

a. Les influenceurs ont été les premiers à “desinstitutionnaliser” les marques de luxe et à les rendre plus visibles tout en les maintenant désirables. Ils ont contribué à cet élan de démocratisation des objets de luxe et ils ont aidé à retisser le un lien entre les marques et leurs consommateurs. Mais depuis

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quelques temps, je les considère plus comme des panneaux publicitaires vivants que comme de vrais ambassadeurs…

Last Few Questions

1. How important is social media and digital communication for Houses like Boucheron in relation to traditional press?

a. Les medias sociaux sont complémentaires de la presse traditionnelle. Ils sont un moyen de toucher le prospect directement et d’établir une relation privilégié entre lui et la marque… ce que ne permet par un journal classique.

INTERVIEW NOTES: SYBIL LAYOUS Previous Position: Digital Manager at Maison Margiela Date: 24 May 2016 QUESTIONS: Desirability of Luxury in the Digital World

1. Do you believe that social media has overexposed luxury brands? Are these tools making luxury more or less desirable? If you think it is making brands less desirable, how would you suggest brands combat this problem in the future?

2. Do you believe that social media is now a mandatory tool for luxury brands? What do you think of brands like Celine and Goyard who do not use social media?

3. How can luxury brands tailor social media to their sector? Consumer Behavior

1. How do you believe social media has impacted consumer behavior in the luxury industry?

2. Do you think that e-commerce threatens the brick and mortar shopping experience? 3. How do you think digital can be used to enhance the in-store shopping experience? 4. Some luxury brands like Burberry and Tom Ford are shifting their fashion week

calendars to align with their retail calendars. Do you believe that this is a choice that would work well for most luxury brands? Why or why not?

Measuring Effectiveness: 1. How can fashion/luxury brands measure their success on social media? Should

success be measured differently for different platforms? 2. How can brands measure the impact of social media and other digital

communication activities on sales? Challenges

1. What do you find to be the biggest challenges in developing an effective digital communications strategy for a luxury brand?

2. Do you think there is a gap in many luxury brands’ quality of online and offline experience? (For example: experience on a brand’s social media pages versus the quality of the in-store experience). How can brands harmonize the image of their online and offline “touch points”?

Influencers 1. Who do you consider to be the most influential people in fashion today? (Types of

people/positions or the specific people themselves) Do you believe that the profile of trendsetters has changed over the last decade?

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2. How do you think bloggers have influenced the way fashion/luxury brands communicate online?

3. How do you think bloggers have influenced the way customers and fans interact with fashion & luxury brands?

Last Few Questions 1. Do you believe the luxury industry is still reluctant to embrace social media? Why or

why not? 2. What do you see as the biggest obstacles today for digital communication in the

luxury industry? RESPONSES / INTERVIEW NOTES: ON DIGITAL OVEREXPOSING LUXURY BRANDS:

• Did some research ahead of the interview and noticed that lots of articles from 2010 and 2011 are still relevant

o This indicates that people are still asking same questions now as they were five years ago and that we still don’t have the answers

• The conflict between digital communication and the desirability of luxury is still relevant

• Even after working in digital, says she still does not have the full answer • Agrees that luxury brands are still over-exposed online and becoming less desirable

o Brands need to “take a step back and recalculate their entire strategy” o Example: Dior.

! Too much content posted ! Suggests they need to take a step back and recalculate their entire

strategy o Example: Louis Vuitton

! Has a heritage of being a travel brand. As a consumer, when I go on that page, I image traveling with the brand, not just to see photos of bags

• Digital goes a long way in creating brand awareness, but at this point it has created customer fatigue. There is too much noise for the consumer.

o “As a user, I’m bored with what I’m seeing online. As Digital Manager at Maison Margiela, I was frustrated because we had to create content out of nothing. People are not stupid anymore – you can’t fool them.” Brands need to be careful about posting meaningless content.

• ON EVA CHEN’S RECOMMENDATION TO POST AT LEAST ONCE PER DAY ON INSTAGRAM:

o Suggests that she is referring to the problems that may come for brands with the algorithm Instagram is developing. This would mean that brands will need to post every day to get as much engagement as they did before the algorithm.

o Suggests it is better to post one strong image 2 – 3 times per week. “If you don’t have anything to say, don’t post anything”

• Luxury brands are afraid to not post “hero content”, ie- content that is flawless • In the beginning of the social media era, there was a lot of instant and spontaneous

content posted online. Some brands did it well, others not so much (Margiela is an example of a brand who did not do it particularly well at the beginning)

o Fine line between spontaneous content and bad content o However, brands need to forget “picture-perfect posts”

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! Even “Behind the scenes” images from fashion shows are all the same for each brand

o When brands allow themselves to show more candid moments, people will engage

o Instagram should be like a reality TV crew following the brand at all times, and then you just edit (or don’t – that’s what makes it interesting, people want to see those moments)

o Importance of an in-house photographer who can capture these moments THOUGHTS ON BRANDS LIKE CELINE WHO DO NOT USE SOCIAL MEDIA?

• Goyard recently launched an Instagram account o In the beginning, it was a private account with access only given to select

clients o Considers it to be a good idea – some brands could consider this to keep their

exclusivity, but to still be online o For Goyard – people know who they are. It is a good way to build image

without overexposing the brand. o Sad when seeing that they decided to make the Instagram account public

• Margiela is a brand that does not advertise. It has created an aura around it being so notorious without using typical commercial tactics.

• Instagram does influence brands a lot to have an account and to post regularly o There are people hired dedicated to this mission (ex: Eva Chen)

IS SOCIAL MEDIA A MANDATORY TOOL FOR LUXURY BRANDS?

• In today’s world, social media is the easiest and most efficient way for a new luxury brand to reach its consumer

• Unless you have a huge ad budget like Céline you need social media to generate awareness.

o You can’t generate the same amount of awareness with traditional press as you can with social media

• Mansur Gavriel is an example of a brand that’s doing it right. o Post regularly, but always use beautiful images that are very distinct (can

recognize them easily on Instagram’s explorer page) o The key is coupling this social media strategy with scarcity in distribution of

Mansur Gavriel products. • The Row is another good example

o Desirable because it is still very exclusive (not many points of sale, very expensive, only one boutique)

ON MEASURING EFFECTIVENESS

• A Business of Fashion article cites that it is still very difficult to measure success and that most fashion executives don’t know exactly how social media interacts with consumers

• The problem is that it is difficult to measure how social media effects sales because there isn’t a direct link between the commercial team and the social media team

o The social media department is generally separate from the rest of the company

• For e-commerce, there are easy ways to measure effectiveness (For example, plug-ins on Twitter and traceable links can provide a direct measure of sales)

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o However, social media is usually more complex than that. There is always the possibility that a photo was posted during fashion week, the consumer took a screen shot of it, and then months later went to buy it in a physical boutique.

• There is no way of measuring the full extent of social media’s effectiveness • Suggested a few basic ways of measuring success

o Set monthly meetings with retail team to get feedback on what is selling. Possibility of drawing link between what sold in boutiques and what was posted on social media during a certain time period

! Digital managers should talk more regularly with sales representatives to understand their needs

o There needs to be more communication in general between sales teams, marketing teams and social media teams to get direct feedback

! Today, this generally goes the other way around: The marketing team tells the social media team what to post. The chain of command should be more fluid.

o For luxury brands with a lot of stores, these suggestions would be difficult to put in place

! Cited example of a friend who recently launched a fine jewellery line. Does not have any points of sale, but has an Instagram page through which people direct message her to inquire about products (and potentially buy). Her success is easy to measure.

! On the other hand, for a brand like Louis Vuitton who has a massive retail network, it is much more difficult. Even more difficult for brands like Margiela who in addition have many franchisees, partners etc. in retail.

DO YOU THINK SOCIAL MEDIA COULD START INFLUENCING PRODUCT DEVELOPMENT AND DESIGN FOR LUXURY BRANDS?

• Not for luxury – this is not how it should be • Cited that at Margiela, a decision was made not to share the bad comments with the

designers (deleted them instead). Need to protect the creativity of designers and not to allow consumer comments to influence their creativity.

• Either way, designers are being influenced by consumers. As much as a creative director has creative freedom, they are still getting a set of instructions based on previous season purchases.

HOW HAS SOCIAL MEDIA EFFECTED CONSUMER BEHAVIOR?

• It has influenced the way people look at products. They do a lot of research online before buying.

o Always the possibility that someone bought a product in a physical store, but that purchase was influenced by online content

ON SEE NOW BUY NOW

• Ironically, the “broken fashion system” was triggered by social media o The system was not broken 10 years ago. Back then the idea was that you

create the collection, show it to the fashion elite, long-lead press has enough time to photograph it and once the magazine is out, the clothes are in stores.

• Now the problem is that brands are doing so much around fashion shows on social media. As a consumer, you are seeing more of clothes that are not available in

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boutiques. Obviously they want to buy it now, but they will forget six months after the fact.

• See Now Buy Now makes perfect sense • Lots of consumer fatigue around understanding the seasons

o Deliveries don’t make sense to people • Two ways of looking at See Now Buy Now

o Does the show when they have already produced the collection (this way, everything is done at the same time). This is risky, however, because you never know if the trend forecasting was right, it requires a lot of money up-front, the alignment of the quantities could be wrong and there is no guarantee that the buyers will buy it.

o Show the collection to buyers and press six months in advance, but make sure it is extremely exclusive and that the images are not leaked. Do a show six months later when the clothes are in stores. Focus communication on the collection when it is actually in stores.

• The argument of “time building desire” is valid, but fast fashion brands are producing faster than the luxury brands. For example, before the metallic Gucci loafers were even in Gucci boutiques, people were seeing knock-offs at Zara.

• Luxury is missing out on a lot of impulsive shopping. • The key is to get the right balance between availability and scarcity through

distribution to keep desirability o Don’t saturate store with products.

• See now buy now would make it easier to measure the effectiveness of social media and solve a lot of the frustrations both consumers and brands are having. Right now, the problem is that there is too much content right around fashion week, months in advance of when the collection will actually be for sale.

• Either way, the consumer would not be deciding – the press would still choose what goes in the magazines, buyers would still decide what goes in stores, stylists and designers would still get full creative freedom on the runway

• This would also solve the problem of the fact that 50% of the collection seen on the runway is not commercialized and sold in stores

• Also, when the creative director of a House changes, there wouldn’t be a big gap between who is creating the collections and what’s in boutiques.

DO YOU BELIEVE LUXURY BRANDS ARE STILL RELUCTANT TO EMBRACE SOCIAL MEDA?

• Change is very slow in fashion • Luxury has been reluctant to adopt e-commerce as well as social media

o When they get on the train late, they’re missing out on a lot of money o Losing a big chunk of what they could make if they don’t sell online

• The key is to do it through proper balance • Saint Laurent does it well

o Small curated selection for e-commerce o Customers still have to go into the boutique to see the rest

• Margiela not a good example o Does not buy show pieces for online store (selection very basic) o Has too many pieces

• E-commerce should reflect what the brand is in terms of image and styling • Luxury needs to look at e-commerce with the same importance as it does an ad

campaign

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• Many brands are not aligned in terms of quality between physical and online touch points

o Valentino, for example is too approachable and commercial online (uses fast fashion tactics). Does a lot of regrams from user created content. Not aligned with boutiques, which are much more luxurious in person (almost intimidating: sales reps, merchandising, prices). Physical boutiques much more dreamy than online conteny

INFULENCERS

• Editors still have their influence, but instagram girls are the most influential people today in fashion

o For example – girl wearing something on street style shot would influence purchase

o Brands are also seeing this and starting to work with “insta-girls”. (ie – sending them products to post on their pages, etc)

o Not necessarily bloggers, because they do not have a blog and do not write; they just take photos

• In the past, the top influencers were models, celebrities, and influencers • This shifted at a certain moment to bloggers. Now few bloggers have survived (few

even have a desktop version of their blog) o Example – Susie Bubble: Influence has shifted from blog to street style +

contributing for Dazed and Vogue China o Example 2 – True influencer is Leandra Medine. Has a blog, is an opinion

leader, street style star. Influences consumers and fashion brands o The above 2 are more influential than most editors

• Supermodels do have influence, via Instagram HOW DO YOU THINK DIGITAL CAN BE USED TO ENHANCE THE IN-STORE EXPERIENCE?

• Brands today are not including digital in their boutiques in the right way (they’re using screens, holograms, and other devices that are a bit like gadgets). It’s not pure digital.

• Best way to use digital is to enhance the shopping experience o For example, something that would allow the sales rep to take the name of a

customer and immediately see their purchase history on an ipad to help them tailor the service (would make it even more of a luxury experience)

! Need a strong database and CRM infrastructure o Sync online and physical boutique inventory through cross-channel activities

(ie: buy online, pick-up in store, alterations). Fast fashion brands already doing this.

o Example: Burberry has every product identified through RFID so that customers can scan it in a boutique (if a salesperson is not around) to get more information about it

o A big challenge is that stores cannot sync inventory or CRM because of legal restrictions (privacy laws)

o Make online shopping easier for people who live in less accessible places through e-commerce.

WHAT DO YOU FIND THE BIGGEST CHALLENGES IN CREATING A DIGITAL STRATEGY?

1. Involving the creative director

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a. A very important step which is often being left out b. Example: Raf Simons at Dior – Frustrations with not being involved in the

design of boutiques. Sometimes social media accounts are very far off from creator’s vision.

c. Another example: Hedi Slimane shot the images for Saint Laurent’s Instagram to control the brand image online and offline

d. BIGGEST CHALLENGE – how to make social media reflect brand and the creative director’s vision

i. Creative director can’t do anything. Don’t know to what extent they want to be involved, but definitely should be involved. Should have meetings with social media team for feedback. Should be more communication across the brand.

ii. The social media team should not be entirely dependent or independent.

iii. Good example of that is Gucci – can see Michaele’s influence on social media platforms

INTERVIEW NOTES : CHRISTOPHE LU Current: Asia-Pacific Regional Digital Manager at Pierre Fabre Previous: Digital Account Manager at Same Same (a digital agency that specializes in the luxury industry); Assistant Digital Project Manager at Makeup Forever; Corporate and Brand Communication Officer at Kering Date: 9 June, 2016 Desirability of Luxury in the Digital World 1. Do you believe that mass digital communication has made luxury brands more or less desirable? If you think it is making brands less desirable, how would you suggest companies combat this problem in the future? I think digital communication has allowed luxury brands to reach more people as digital is accessible to everyone. Luxury brands are more reachable via their communication online but it doesn't mean they are more affordable. There are two different things. If we talk about desirability, going online for luxury brands is a real challenge in terms of image but as well as service. In the traditional retail market, luxury brands offer additional services to their customers compared to mass market brands. This tailor-made service is difficult to recreate on the digital space and that is why some luxury brands still believe they can't replicate this model online and replace for example, a dedicated sales person to advice you personally (ex: for high jewellry). 2. Do you believe that social media is now a mandatory tool for luxury brands? What do you think of brands like Celine and Goyard who use virtually no digital communication? I truly believe that social media is nowadays a key tool to engage a conversation with your customers. If we take the example of an ad on magazine, people will read it (or barely see it) and then turn the page. The difference today with digital is that hence, people have a voice and can write down comments and share their feedbacks regarding anything and including luxury brands. In the past, the communication with luxury brands was really top/down (brands share their campaign and customers remain passive), now more and more luxury brands engage with their customers and social media are here to give them a voice. Everything is shareable and more and more brands put back their customers in the center of their strategy,

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using mechanisms to involve them via users generated contents for example (for example Burberry with their 'Art of Trench' campaign. Nonetheless, some niche brands (like Celine or Goyard) still decide not to step into social media. I think it's a strategic decision but more in terms of brand image than resources or budget. Some brands still remain reluctant to go on social media as nowadays social media can be related to mass communication. I believe in a few years the question won't be to go or not on social media but why the brands is not already on this platorm X or Y. Eventhough, the brands decide not to go on social media, someone has already opened unofficial pages for them. Everything is going really fast on digital so in the upcoming years, everything will be online as it's not a trend anymore. 3. How can luxury brands tailor social media and other digital mediums to their sector? Luxury brands need to keep in their social media strategy and online communication, this idea of desirability and uniqueness. They use a lot storytelling to share their stories and invest a lot to have exclusive contents. They don't use social media like they do for press, outdoor or TV. Thanks to the different formats of content available online (videos, photos, animated gif...), it allows luxury brands to produce really qualitative and exclusive contents. Recreate the experience of a live fashion show, or discover how a craftman is working several hours on a high jewellry piece is possible with digital and social media. Consumer Behavior 1. How do you believe digital communication has impacted consumer behavior in the luxury industry? Digital communication has clearly facilitated the access to the information. Luxury brands can now reach a wider target and people can also get information about products very easily. Nowadays, customers can get all the information about products they want even before going to the retail stores. They can know where to shop, when to go to avoid the crowd and sometimes, book an apointment to make sure their products will be available when they will come to the store. Moreover, sometimes, you have customers who will enter a luxury store holding their mobile phone, asking for a product and knowing all its specificities even better than the salesperson. 2. Do you believe that e-commerce threatens the brick and mortar shopping experience? No I don't believe that e-commerce threatens the brick and mortar shopping experience. 3. How can digital be used to enhance the in-store experience? We can take the example of Burberry store where they have put the digital in the center of their strategy, including in the retail store. More and more brands use digital in-store to enhance the customer experience: digital windows to try clothes, Ipads for salespersons, etc. Digital also allows brands to know their customers and collect a tremendous amount of data about them. Thus, in a close future, the salesperson can have access too much more information about their clients thanks to CRM and data collection. 4. Some luxury brands like Burberry and Tom Ford are shifting their fashion week calendars to align with their retail calendars. Do you believe that this is a choice that would work well for most luxury brands? Why or why not? I don't believe it's a choice that would work well for most luxury brands as most clients know how the system works. Moreover, I totally agree with Sydney Toledano or Francois Henri Pinault's view: instantly shoppable runway collections "negates the dream" of luxury. Waiting for your products makes it even more desirable and is part of the strategy. When you buy a Rolls Royce or a Ferrary sometimes you need to wait for a year before acquire it. I think it's totally the same feeling.

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INTERVIEW NOTES: PAUL MAROVIK Current Position: E-commerce Merchandiser at Marc Jacobs Date: 1 June 2016 QUESTIONS & RESPONSES: 1. Do you believe that digital communication and e-commerce has overexposed fashion/luxury brands? > I don't think digital over exposure is wrong as long as it's rightfully targeted. The digital world is clustered. It's actually hard to gain visibility, so I think the more you are exposed the better it is. 2. Do you think that these tools have made luxury more or less desirable? If you think it is making brands less desirable, how would you suggest brands combat this problem in the future? > I don't think it made them less desirable. It just created a better brand awareness. And with blogger and influencers it actually made them more desirable. 3. Do you believe that e-commerce is now a mandatory tool for luxury brands? What do you think of brands like Celine who do not sell their products online? > I do think it's mandatory. E commerce is the real flagship, where you can display the fullest assortment and educated your customer about the brand. 4. Do you think that e-commerce threatens the brick and mortar shopping experience? > Not at all, I think it can only reinforce it and help with traffic. How can brands use e-commerce and physical boutiques in harmony to support one another? > Omnichannel strategy 5. Do you think there is a gap in many luxury brands’ quality of online and offline experience? (For example: experience on a brand’s e-boutique versus the quality of the in-store experience). > Not necessary. It is still possible to create a very luxe experience online. 6. How can brands harmonize the image of their online and offline “touch points”? > By adopting consistency through their channels 7. Do you think that digital can be used to enhance the in-store shopping experience? If so, how? > Definitely. You can enhance it by offering a larger assortment online in store. For instance if a customer wants something the store don't carry you can order it from the ecomm for him. 8. Some luxury brands like Burberry and Tom Ford are shifting their fashion week calendars to align with their retail calendars. Do you believe that this is a choice that would work well for most luxury brands? Why or why not? > I think it would. To wait 6 months to get what you see is not sustainable anymore. I think the issue is more on the brand side being too “precious”. I understand as well that on the designer's side it can be weird for him to design a collection and then showcase it 6 months later. 9. Do you believe the luxury industry is still reluctant to embrace e-commerce? Why or why not? > They used to be but less and less. The fact that LVMH is developing it's all digital strategy shows that luxury is ready to shift to ecommerce. 10. What do you see as the biggest obstacles today for e-commerce in the luxury industry? > Being too “precious” and not understanding the digital customer enough

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INTERVIEW NOTES: ALEXANDRA TUTUIANU Current Position: Digital Marketing & Content Manager at Viktor & Rolf Date: 10 June 2016 Desirability of Luxury in the Digital World 1. Do you believe that social media has made fashion/luxury brands more or less desirable? If you think it is making brands less desirable, how would you suggest brands combat this problem in the future?

• Some brands are doing it right with social media, other brands aren’t • The challenge is to find the right balance of content and distinguishing between what

to share & what not to share • For Viktor & Rolf (a Haute Couture house), we position ourselves at the top of the

luxury pyramid o There is a fine line between what to share & what not to share o The brand is very cemented in the designers’ ID – we look to keep a touch of

the designers in our online communication, but not too much • Importance of creating a tone of voice, visual language, posting cycle… • Lots of brands post a ton of branded content (and not quite enough about the people

behind the House) • Keeping the mystery alive is very important online • Social media has generally made luxury more desirable because it has given people

access to a world they wouldn’t normally have access to 2. Do you believe that social media is now a mandatory tool for luxury brands? What do you think of brands like Celine who do not use social media?

• Some brands can still get away with it, but moving ahead it will most likely become a requirement

• In addition to the digital revolution, there has been a social revolution related to the way we interact through digital mediums. For example, everyone at Viktor & Rolf shows today has their phones out. Not so long ago, they all had pens and paper. We now have a great dependency on mobile phones.

3. How can luxury brands tailor social media to their sector? • By establishing a strong online communications strategy

o Pinpoint main values o Tailoring each specific case to the brand’s core

• Social media is essentially an extension of the brand 4. How do you differentiate a Haute Couture house via digital communication from other luxury brands?

• Lots of people know Viktor & Rolf because of the crazy Couture shows, others know the brand because of the perfumes.

o At times, these audiences can seem like polar opposites. o However, the Couture is the core of the brand – it serves as the point of

reference for all sectors, including perfumes. • At Viktor & Rolf, there is a lot of communication around the designers being “Fashion

Artists” o Not only do they create garments, but they are also art connoisseurs who go

to art shows, cultural events, etc…

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Consumer Behavior 1. How do you believe social media has impacted consumer behavior in the luxury industry?

• Viktor & Rolf do not specifically use their digital channels to sell o Except with Fragrances o The main goal with social media for V&R is to communicate a mood and to

create brand awareness • Collaborations and partnerships with online influencers and bloggers have impacted

consumer behaviour, because consumers look toward these people for recommendations.

2. Some luxury brands like Burberry and Tom Ford are shifting their fashion week calendars to align with their retail calendars. Do you believe that this is a choice that would work well for most luxury brands? Why or why not?

• See Now Buy Now is a bit of a double-edged sword. o For the consumer – it’s great. It allows them so many immediate choices o For the Brands – it could sacrifice creativity. It could also increase the amount

of pressure put on organizations and people because of the tight deadlines. Measuring Effectiveness: 1. How can fashion/luxury brands measure their success on social media? Should success be measured differently for different platforms? 2. How can brands measure the impact of social media and other digital communication activities on sales?

• Analytics are becoming more and more important • There is the possibility of measuring success very organically – by measuring reach,

likes, comments, shares, etc • However, it is very difficult to make the connection between what people like on social

media and the ‘end of the line’ (ie- what sells) • Around couture shows, the brand does a lot of initiatives and collaborations with

influencers. We always see a bump in our social media following, but we are not sure if it is because we are posting more content or if it is the online influencers we work with who are driving people to our social media pages.

• In sum, there is no exact formula (for most brands – may be different at Burberry) for measuring success on social media. It is very much left up to interpretation.

o There are lots of tools out there to help; but everyone’s still going around a bit in the dark

Challenges 1. What do you find to be the biggest challenges in developing an effective digital communications strategy for a luxury brand?

• One of the biggest challenges is definitely measuring success & effectiveness of online communication

o Particularly at V&R because they do not have boutiques and they do not sell online

o There are many points of sale for fragrances – but practically too many to realistically keep track of when related to social media’s impact on sales

• It is also difficult to keep content in a neat “Formula”. On digital, you need to be dynamic and proactive. Quick reaction times are always a challenge.

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Influencers 1. Who do you consider to be the most influential people in fashion today? (Types of people/positions or the specific people themselves) Do you believe that the profile of trendsetters has changed over the last decade?

• Everyone still talks about the top people in fashion like Anna Wintour • However, there has been a huge shit in who has been seated in the Front Row at

V&R shows (Lots of online influencers and bloggers) 2. How do you think bloggers have influenced the way fashion/luxury brands communicate online?

• Before, there was a lot more talk about celebrities • Now there is a lot more talk about influencers

o Also many more collaborations/partnerships with influencers. It has resulted in less of a one-sided communication from brands and more of a collaborative effort.

3. How do you think bloggers have influenced the way customers and fans interact with fashion & luxury brands?

• Bloggers have lifted the veil on fashion. Now they are at shows, backstage, behind the scenes in the ateliers… Brands have begun to let them in on the communications process.

Last Few Questions 1. Do you believe the luxury industry is still reluctant to embrace social media? Why or why not?

• Some brands are still holding out, but in general people tend to follow one another in the fashion industry

o Particularly in luxury, brands want to be no.1: to have the most followers, to have the best collaborations

2. What do you see as the biggest obstacles today for digital communication in the luxury industry?

• Creating a balance and not posting too often; keeping the mystery INTERVIEW NOTES: ALEX WHITLOCK Current Position: Social Media Manager at Stella McCartney (London, UK) Past Positions: Social Media Manager at Matches Fashion, Digital Media at Love Magazine Date: 11 June 2016 Desirability of Luxury in the Digital World

1. Do you believe that social media has made fashion/luxury brands more or less desirable? If you think it is making brands less desirable, how would you suggest brands combat this problem in the future? • I don’t think it’s changed desire. Desirability is a different to different people. • Put brands in a different arena • Advocacy and validation is another thing • ‘Tipping point’ for trends, and some brands are embroiled in that • Does not believe social media is making luxury brands less desirable • It has, however, shifted the power much more into the hands of the consumer • Brands who are strong on social media are generally ‘winning’ at the moment • Social media has changed desire in terms of attracting a much younger audience

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• Advocacy of brands by online influencers increasingly important • However, social media can kill brands by over exposure if not used properly

2. Do you believe that social media is now a mandatory tool for luxury brands? What do

you think of brands like Celine who do not use social media? • Absolutely, but I think the ecosystem is now so vast, brands can pick and choose.

You shouldn’t spread yourself too thin, it dilutes the message. • There are obvious platforms where your market are, and obvious platform where

they’re not. • Yes, for any modern fashion business social media is a mandatory tool • Celine is a good example of a niche brand that has made a strong choice not to

use social media (and it has worked for them) – however there is a lot of advocacy around the brand online

• The way luxury brands should use social media should depend on their market and image

• As more and more people use social media, all brands will have to jump on board eventually

Consumer Behaviour

1. How do you believe social media has impacted consumer behavior in the luxury industry? • It’s an additional touchpoint, making marketers work harder. Another area where

branding is crucial and ensuring everything speaks to both brand and consumer. • Customers use social media differently, some will search branded content, others

will search UGC – a brand needs to inspire all of those things and leverage what’s relevant in the space.

• Social media is an additional touch point that needs to be considered • It must speak to both the brand’s ethos and the consumer • Generally social media has had a positive impact – it has helped brands with

consumer research and on anticipating trends 2. Do you think that e-commerce threatens the brick and mortar shopping experience?

• ‘Threatens’ is the wrong word. Any modern fashion business has embraced ecommerce and the better ones have moved it front and centre.

• I don’t think it needs to jive against it, different customers want different things. An ‘experience’ isn’t something that can only be felt in stores, you can replicate those feelings online – and whilst I don’t think any brand has got this ‘right’ – it’s just a matter of time before one does. It’s when not if.

3. Some luxury brands like Burberry and Tom Ford are shifting their fashion week calendars to align with their retail calendars. Do you believe that this is a choice that would work well for most luxury brands? Why or why not? • The fashion calendars have been wrong for a long time. Brands spend so much

money creating buzz around something that isn’t going to hit stores for another 6 months – keeping that buzz alive is equally hard and equally costly.

• On the other hand, it does give brands a period of time to really understand demand for certain pieces and ramp up production on key pieces, and negate on others – this is something that is quite unique to the luxury fashion industry.

• That said, the very essence of luxury is desire – and waiting for something that has been packaged up so perfectly – through shows, campaigns, placements, editorial – is the epitome of that. I think most brands will find a happy hybrid but on the face of it, it makes perfect sense – provided production can allow for it.

• I do think smaller brands and magazines will suffer as a result of this shift.

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• Could go either way • The calendar is not right as it is now – in that way, See Now Buy Now makes

sense • However, brands could explore a ‘happy medium’ – for example, by making Pre-

Collections immediately shoppable, but not the main collections • Brands need reaction time after the shows, ad campaigns, and for the press to

photograph the clothes for editorials Measuring Effectiveness:

1. How can fashion/luxury brands measure their success on social media? • Many, many ways. The standard KPIs as far as follower growth, conversion etc

are all obvious barometers but there are also a plethora of social specific KPIs around engagement and content syndication that really provide a 360 view.

• KPIs, including engagement • Use of listening tools to get insight on online conversation around the brand • Use of other software in-house (both on the group level with Kering and internally

at Stella McCartney) 2. How can brands measure the impact of social media and other digital

communication activities on sales? • This is harder. Social Media is never going to be a big converter, it’s just not a

shopping environment and the levels of intent are very different when compared to more traditional methods like Google. However, whilst the industry still reports on last click rather than attribution then we will never really be able to compare apples to apples.

• It is very difficult to measure the direct impact of social media on sales • Most report on clicks and redirections. However, social media is very rarely the

last place someone clicked to directly access an online store • Social media generally does not drive nearly as much traffic as google searches

to an online store • Attribution – a measurement of where the traffic of the online store is coming from

– is an important way to measure social media’s impact on sales a. It relates each touch point to a percentage of traffic generated on the online

store Challenges

1. What do you find to be the biggest challenges in developing an effective digital communications strategy for a luxury brand? • The biggest challenge for most brands is platform adoption, and sticking to

decisions. In a digital world moving a million miles an hour it’s quite easy to move the goal posts throughout a brief and that’s such a bottleneck for successfully executing any sort of campaign.

• That said, there are so many brands doing this well nowadays that the stakes are higher. The task now is creating truly integrated 360 campaigns; too often do I feel a significant disjuncture between a brands digital presence and physical presence when I enter some stores.

• Adapting social media communication to the brand • Luxury brands generally take their time to “feel things out”- it is very important to

pick the right channels and to understand where the brand’s market is • The “goal posts” in online communication are constantly moving – it is very

important that luxury brands can be “limber enough” to react to these changes quickly

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2. Do you think there is a gap in many luxury brands’ quality of online and offline experience? (For example: experience on a brand’s social media pages versus the quality of the in-store experience). How can brands harmonize the image of their online and offline “touch points”? • Yes, absolutely. More often than not it will go one way or another, the guard is

completely down and under par content slips through or brands create such elevated digital content that they move too far away from what a channel, or the essence of social media, is about. It’s about moments in time, not perfectly crafted campaign imagery day in day out. People can see through that. I think both these instances are equally detrimental.

• Harmonising this approach is easy. Communication between teams. • Yes, but it goes both ways • Generally, social media tends to be sometimes a ‘free for all’ for brands (part of

this due to weak budgets and lack of high quality content), while the etiquette in physical stores tends to be more controlled

a. Burberry – has a very tight editorial style for social media and has almost lost the “social” aspect of it.

b. Prada – social media below par. In store experience very high end.

Influencers 1. Who do you consider to be the most influential people in fashion today? (Types of

people/positions or the specific people themselves) Do you believe that the profile of trendsetters has changed over the last decade? • I don’t think there is one single most influential type of person in fashion today.

Clearly, vloggers and bloggers have amped up and are rolling our complex business strategies that can align easily with some brands looking to speak to certain audience.

• Equally traditional ‘influencers’ like editors, buyers etc have been armoured with social media in order to further drive their own agenda as an influencer – they’ve just been a little slower on uptake and in cultivating a worldwide audience.

• The celebrity status of many designers has been one thing that hasn’t really changed, but there are an army of younger designers who are upping their social game significantly, which is having a wonderful impact on the house. Similar to models and their boards.

• Not just one type of influential people in fashion – what has changed is the fact that there is now more of them

a. Bloggers (advocacy and storytelling – different fan base), editors (who have used social media to their advantage)

b. Celebrities as well (have also used social media and have built a community that way)

2. How do you think bloggers have influenced the way customers and fans interact with fashion & luxury brands? • I think many bloggers have introduced brands to otherwise unsuspecting people,

which is crucial. • They’ve also beaten down the elitism, which has opened up many brands to an

entirely new market. • They have introduced brands to new markets • Communication online now goes much further • They have taken away some of the myth around luxury brands and have made

them more accessible • Generally, bloggers have made a positive impact

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a. Particularly with promoting “key pieces” – they contribute greatly to the product life cycle

Last Few Questions

1. Do you believe the luxury industry is still reluctant to embrace social media? Why or why not? • No, I just think it was slow to take it up. If it were not for some of the early

adopters, who knows where we’d be today. • No – some early adopters took onto it first, but luxury has generally caught up

(though at a slower pace) a. Luxury brands understood a few years ago that they had to get on board b. However, there is generally not as much innovation in luxury as in other

sectors (budget can be a problem, as well as their willingness – however even these factors are changing)

2. What do you see as the biggest obstacles today for digital communication in the luxury industry? • Skills. Too many brands are ill-equipped for digital success because they have

been slow to adapt. Those that have already rode in on the early adoption wave and as that story starts to cool many brands are now competing on a level playing field – expected to do something amazing online but trapped with traditional mind-sets.