Commentary

Where Luxury Intersects With Digital

How luxury brands and the digital age fit together underwent scrutiny last week at a panel of senior executives at Columbia University.

“One of the challenges of a luxury brand is avoiding trends. It’s easy to get swept up,” said Sara Gergovich, vice president of digital and ecommerce for Hermes. “You really have to step back and say, ‘What’s right for my brand?’ ‘What’s my message?’ ‘What’s my voice?’ ‘Where is my audience?’”

While Hermes launched an ecommerce site in 2002, she said, it was strictly a commercial Web site and only very recently did the company move into social media — and it’s doing it very slowly.

What Hermes pursued more aggressively is integrating technology at the point of sale that makes its sales associates more effective. Associates were using their own phones to text and email customers. Now they have customized "hPads" — iPads customized by Hermes — that allow them to interact with clients by sharing photos and giving accurate information on stock availability.

“It has made the customer/sales associate relationship really engaging and is responsive in real time, but in a controlled environment — not from their personal iPhone,” Gergovich explained at the BRITE conference hosted by the Center on Global Brand Leadership at Columbia Business School.

Hermes still tries to keep a tight rein on its brand and does not allow unchecked user-generated content. On its site is one module where clients can send photos and share stories about how they use the products. All this content is reviewed and edited to be sure it fits the Hermes style and culture before it is published.

As for influencer marketing, Gergovich said, Hermes invites bloggers to write about its products but doesn’t pay. “We don’t buy friendship,” she said. “That’s not in the values of the house.”

How Van Cleef & Arpels Sees The Digital World
“The most important thing for us is to realize and assert who we are,” said Alain Bernard, president and CEO of Van Cleef & Arpels Americas. He said the retailer has made several hundred-thousand-dollar sales online, but not yet sold a million-dollar piece. While this may seem incredible, there is a huge territory where the store has no retail presence, so digital fills the gap.

“How do you analyze the benefits and risk?” Bernard added. “We have no choice. We’re going to go to digital or social media.

“The question is how to be there the best way possible. The beauty is you can analyze the return on your investment much better than in the traditional world. We know social media investment is more efficient than banners.”

In a test exercise, a Facebook posting yielded double the traffic to the Web site than banners did at one-tenth of the investment. “When you know that you try to be as engaging as possible on the social tier,” Bernard said.

Babies and animals are as popular for this luxury brand as they are elsewhere on the Internet, he added.

Still, Bernard said, the more digital things become, the more important it is to have humans in the mix. Van Cleef sales associates have personalized ecatalogs loaded on iPads. Everyone has a company phone. Many keep track of their clients around the world through a social app.

“We encourage our teams to also interact on social media … to post things online,” he said. “You go on Instagram, you will have your regular posts of the house. You will also have some tele-associates and ambassadors posting their own photos about creations. We try to [permit it] in a controlled way. We believe it creates a human, personalized touch to the relationship with their clients.”

Telephone reps are trained exactly the same way as sales associates so there is an equivalent experience, Bernard said.

Van Cleef is using virtual reality to provide tours of workshops it does not want to open to the public.

Meanwhile, At The House Of Ferragamo
Vincent Ottomanelli, president and regional director of Ferragamo, said the brand has shifted increasing amounts of its budget to digital, spending probably 50% more year-over-year.

“It always begins with the product,” he said. “The advertising and content surrounds the product. Traditional print advertising is still important. We see customers walking into our stores with tear sheets from magazines and catalogs. We have to strike a balance. We know our consumers are going online to view us. Unfortunately our budgets overall are not growing. Little by little we’re shifting more to digital.

Ferragamo allows for the customization of its classic Vara shoe — a classic pump with a grosgrain bow that has skewed to an older demographic. Ferragamo has an iPad allowing in the store allowing customization of the shoe with a color or bow.

One socialite decided to create the shoe because she wanted to use it when surfing, he said, even though it’s more of a business type shoe. The photo she posted went viral and spawned a flurry of young women wearing patent leather Vara shoes on the subways and walking on streets.

“Never in a million years would we have imagined this to become a young fashion-forward shoe.”

Increasingly, Ottomanelli said, customers want to communicate by text message rather than email. In a few stores, Ferragamo has tested providing smart phones so sales associates can communicate directly while inside a Ferragamo brand environment. It’s seeing a positive impact and quicker response time.
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