Commentary

High-End Brands Do Low-End Job Online

For those of you who have been reading my columns, you know my mantra is building, stewarding and protecting brands online. That being said, when you think of luxury brands online, what comes to mind? Well, I think of a few beautifully designed Web sites like David Yurman's and Rolex's. However, I can't think of many more.

Take a look around to see if you can find some great luxury sites. First off, they are hard to find. It appears that many aren't even doing search engine marketing.

Many are slow to load and hard to navigate. For instance, some of them look so simple in design it's almost hard to navigate to browse, let's say, rings. On the Tiffany's site, you need to know the type of ring you are looking for. In fact, you have to select the type and click on it from a pull-down menu.

Luxury brands need to step up to the plate when it comes to a digital environment. Such wares warrant high-end photography and, well, a certain distinction. There is no shortage of affluent online users in the States, notes a study from Packaged Facts, which provides an overview of the market:

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  • The Internet is an integral part of the affluent lifestyle.
  • Nearly 21 million households are affluent, which control nearly half of U.S. aggregate household income.
  • The aggregate income of affluent households will reach $4.6 trillion in 2011.
  • The affluent are highly educated and work for their money.
  • Home ownership is a badge of affluence.
  • Affluent households are overwhelmingly family households.
  • The affluent are concentrated in the Northeast and Pacific regions, and in big cities.
  • And here's more from the study on how the affluent spend their money:

  • Affluent shoppers are much more likely to turn to the Internet.
  • Affluent consumers spend nearly one out of every three dollars in the U.S.
  • Affluent households spend more than twice the average for apparel; designer clothes are more important to the self-image of highly affluent consumers.
  • The affluent shop more often and enjoy it less.
  • The affluent reject "sales" and "bargains" but respond to "deals" and incentive offers
  • Brandweek recently analyzed an Echelon Marketing Group study indicating that "luxury marketers need a better economic study of their target, the U.S. affluent market, and more effective means of reaching them."

    "Marketers rely primarily on four categories of data -- demographic, geographic, behavioral and attitudinal -- however, luxury marketers not so much," Echelon President Don Neal was quoted in the article. He noted further, "To understand who can afford expensive products and the impact of money on their attitudes and behaviors, they also need to consider a fifth category based on economic insights" -- which he called "econographic" data.

    Additional findings include:

  • 85% of luxury goods marketers want to engage in more one-on-one marketing; however, only half of them actually do so.

  • Consumers assume luxury brands have large marketing departments, which is not true.

  • Most luxury brand markers go more on instinct than reality.

  • Email is the least able vehicle for presenting a luxury brand image.

  • Marketers should come up with invitation-only events when advertising to the affluent.


    A recent Booz Allen Hamilton study suggested that "with luxury brands, the excellence of the underlying product is merely a starting point."

    The company interviewed 40 executives from a variety of high-performing luxury brand companies for the study. In a nutshell, the survey revealed that customers expect a high level of service from luxury brands, and service can clearly be a brand differentiator. Companies like Ritz-Carlton, Nordstrom, and Lexus were mentioned as those that "guarantee service that goes the extra mile... They've programmed their organizations to foster customer-centered behavior in employees at all levels."

    Other findings included four principles common to nearly all top-performing luxury brand companies:

  • They create a customer-centered culture that identifies, nurtures, and reinforces service as a primary value.
  • They use a rigorous selection process to populate the organization with superior sales and support staff. The impulse to care about accommodating customers cannot be taught to people who are not predisposed to it.
  • They constantly retrain employees to perpetuate organizational values and to help them attain greater mastery of products and procedures.
  • They systematically measure and reward customer-centric behavior and excellence in sales and service to enforce high standards and reinforce expectations.
  • So when it comes to marketing to the affluent, luxury brands need to step up to the plate. Who's doing a good job? Who's not? Post your thoughts to the Spin blog.

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