Some people share a view that social media can only be effective in certain sectors or industries such as media, B2C or mass-consumer goods. This is not the case. The reality is that social media can be used in all areas to further a business or an organisation’s objectives. And yes, this even includes the world of luxury goods. Social media adoption in luxury goods is more widespread than expected – but because of the ‘niche’ target audiences and the exclusiveness of the products we may not clearly see this.
Earlier this year, I made my annual pilgrimage to Baselworld, the world’s largest prestige watch and jewellery show. This provides a great opportunity for manufacturers to interact not just with retailers, journalists and those in the trade – but also with consumers (prestige watch and high-end jewellery lovers). At Baselworld, business develops, feedback can be gained and networks developed. This is the real world – that digital and social media complements.
If, as some people see it, social media is only about sharing – then there may be a clash with those wanting to keep ownership of luxury items (be they watches or jewellery that can easily cost far more than a Ferrari) secretive. However, online and the mechanics of social media – allow individuals to identify communities, gain more knowledge about brand heritage, discover related brands, and ultimately make better-informed purchase decisions. Even at a basic level digital and social media has a positive effect on sales. It has been reported that over two-thirds of EU customers and half of US customers research luxury items online. Indeed at Baselworld, information sharing is encouraged and brands revel in the awareness-building coverage that can be gained for their new launches online.
Earlier this year, American Express Publishing’s Luxury Summit bought together some of the executive decision-makers and personalities from the world of luxury goods. There was a strong focus on the impact of digital and social media on the luxury goods sector.
- –Robert Chavez, CEO Hermes USA outlined the Internet’s importance in educating customers and bringing new clients into retail stores. Clearly this awareness-building and footfall-driving activity is helped by sharing on social media. Indeed, Chavez has previously spoken to Harvard Business Review about employee engagement and online as being key to driving his business and brand objectives. All CEOs and MDs doubting the value of a multi-channel customer experience and digital should watch the interview here.
- –Sir Richard Branson went one step further and stressed the importance of social media, stating: “People would be foolish not to take social media very seriously. You can suddenly have an army of people to get behind a cause and it also allows you to jump on issues quickly.” Furthermore, where social media can help is in garnering customer feedback. Branson highlighted always having a notebook ready to record customer feedback; social media facilitates this and amplifies it via sharing.
- –Former Wired editor Chris Anderson, who now runs a robotics venture, saw the advances in technology as driving innovation. He stated that globalisation used to be about taking advantage of labour cost-arbitrage and moving to mass production; whereas now globalisation is about time – with speed driving innovation and expanding the range of ‘unique’ luxury goods.
Back to Baselworld, where I saw some of the most prestigious watch brands have truly taken social media on board to expand their brand experience. Jaquet Droz whose heritage from 1758 lies in exquisite animated dolls (or automata) to help sell watches and mechanical birds; these are considered to be some of the finest examples of human mechanical problem solving. These astonishing mechanisms fascinated the world’s most prominent leaders of that time: the kings and emperors of Europe, China, India and Japan. Some consider Jaquet Droz’s devices to be the oldest examples of the computer (predating Charles Babbage by decades). And so, to today, Jaquet Droz has launched a new website to mark its 275th anniversary. To extend its global appeal, the brand is focusing on its timepiece craftsmanship and the website has strong social media integration including video content of its unique watches and sharing via Twitter, Pinterest and its YouTube channel. This online activity has complemented trade marketing and allowed Jaquet Droz to broaden retail distribution, gain new brand followers and increase sell through.
Hublot is another prestige watch-maker that has embraced digital and social media. It is renowned for its innovation and fusion of materials and designs (as well as being a sponsor of major sporting stars such as Usain Bolt, Manchester United, and Dwayne Wade – amongst others). It’s watch prices range from £6k to £1m+. At a previous Baselworld, Jean-Claude Biver, CEO Hublot stated: “This world (of social and digital media) is exciting to us; the potential to get people to know you is unlimited.” Jean–Claude Biver recognised that prestige watch consumers like to have a ‘wardrobe of watches’, want to be treated as special and welcome exclusive communication. And so, Hublot have used digital and social media widely, for instance: many events are live or recorded on the Internet; the CEO tweets (‘Biver Speaks’), conversation is encouraged by postings of consumers wearing Hublot; and a community, The Hublotista Club, has been set up. The Hublotista Club is for new Hublot watch owners to activate an online account with their warranty card and access exclusive material; it has well over 1,000 members now.
Regarding distribution and retail channel, it is expected that a prestige physical retail environment is essential to a luxury brand or retailer – and we hear of traditional ‘bricks and mortar’ retailers opening online stores. However, Watchfinder provides an interesting contrast. Watchfinder is a UK pioneer in prestige watch retail – being the first major online store for luxury watches. Indeed, online and social media lends itself to the ever growing market of pre-owned luxury watches as collectors seek to trade, obtain those hard-to-find models and new-to-market purchasers seek to discover brands and models. After a 10 year history of trading online – Watchfinder opened its first physical store last year in London’s Royal Exchange in the ‘square-mile’ of the city. Watchfinder had sold approximately. £80m worth of pre-owned luxury watches online (with an average of 12k visitors/day and average item price of £3.5k). When considering the purchasers of luxury watches it is no surprise that a significant target audience is city workers and traders – and, once again, online market places and offline locations like Royal Exchange suit the clientele well.
Smart use of digital and social media can increase a luxury brand’s exposure and positioning – without diluting its exclusiveness. Angela Ahrendts, CEO Burberry, has led and overseen the recent growth and success of Burberry. As part of its product and retail renaissance – Burberry has fully embraced digital and social media. Angela Ahrendts has stated that “Any CEO who is sceptical at all: you have to be totally connected with everyone who touches your brand. You have to. You have to create a social enterprise today. If you don’t do that, I don’t know what your business model is in 5 years.” You can see more of what Ahrendts has to say in a recent Bloomberg interview espousing the need for a seamless offline and digital experience.
It is clear that luxury brands have taken full advantage of social media to further their business objectives. Even in the early days of social media we have seen fashion and lifestyle brands such as Hugo by Hugo Boss use interactive videos on YouTube to boost brand engagement. Jimmy Choo went one step further and launched its trainer range via an interactive treasure hunt around London and exploited digital chatter on Facebook, Twitter and FourSquare to boost coverage both online and offline. A final word to Burberry, whose Chief Creative Officer, Christopher Bailey said: “Burberry is now as much a media company as we are a design company.” The exclusive content from luxury brands lends itself to the new content-hungry digital world and army of brand advocates.
In closing, luxury goods’ use of digital and social media provides great learnings for those working in industries connected with high-net-worth-individuals (such as wealth management and brokerage services) or for those wanting to target and build a community of ‘niche’ users. Burberry may be the stock-market darling, showing the value of content – and how sharing online via social media can boost engagement, sales and shareholder value; however, there are also many great examples from even the most prestige and niche luxury companies.
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