• by Erin F. Sternthal , May 26, 2006

Luxury brands wade into the Web for luxe consumers

As the population of wealthy individuals expands, marketers of luxury goods have a golden opportunity. According to Unity Marketing's Luxury Report 2006: Who Buys Luxury, What They Buy, Why They Buy, 30.2 million of 113.1 million households in the U.S. are considered affluent, with a household income of $137,500. And the super-affluent, who have household incomes of $150,000 and higher, are experiencing the highest growth rate, having increased 18.1 percent from 2002 to 2004.

The good news is that while the luxury segment is expanding, these affluent consumers are also embracing the Internet as a means to buy and research products. In fact, luxury consumers polled in Unity Marketing's 2005 third quarter Luxury Tracking Study cited the Internet as their second or third favorite place to shop in 11 out of 15 luxury product categories.

"Looking at the overall retail market, these affluent consumers are the ones viewing this technology as an important way to buy luxury goods," says Pam Danziger, president of Stevens, Pa.-based Unity Marketing and author of Let Them Eat Cake: Marketing Luxury to the Masses--as Well as the Classes. And given that the Web and non-store channels account for less than 10 percent of total retail sales, there is tremendous potential for luxury brands to promote their products online.

Putting the Ritz Online

While some high-end companies refuse to even consider Internet sales, others have already discovered the benefits of online marketing through branded sites, e-mail communication, Web partnerships, and search optimization.

"The challenge for any luxury brand is how to convey the luxury experience online," says Mary Senin, senior manager of e-commerce for the Ritz-Carlton Hotel Company. "It's a dynamic medium but hard to deliver and control. When customers walk into a hotel or a store, you can control that experience." By contrast, Senin notes, if an online visitor "has server issues, that experience is marred."

To convey that luxury experience, Ritz-Carlton uses Flash technology with sound and motion to create a rich online experience. The introduction to the brand's Web site (www.ritzcarlton.com) uses soft music and images from its Reconnect brand campaign to create what Senin terms "experiential advertising."

Ritz-Carlton's efforts appear to be paying off. This year, Senin says, the number of bookings on ritzcarlton.com will surpass those generated through voice channels. To expand the brand's awareness, Ritz-Carlton has also teamed with Mercedes-Benz for a "Key to Luxury" package that includes a car rental, club-level accommodations, valet parking, and a full tank of gas each morning. Through the partnership, Ritz-Carlton is also featured on Mercedes-Benz's site (www.mbusa.com), offering owners access to an exclusive hotel package available on the Owners Online section.

Primo Fly Club

In addition to aggressive search engine marketing activity, private jet travel company Marquis Jet reaches out to luxury consumers through its Web site (www.marquisjet.com), partner Web marketing efforts, and e-mail. The company's current ad campaign can be found in The Wall Street Journal, Departures, and Robb Report, and on the home page of Sun Valley Online (blog.sunvalleyonline.com). Consumers can also find a link to Marquis Jet on the Web site of the luxury residence club Exclusive Resorts (www.exclusiveresorts.com/#marquis_jet).

On its own site, Marquis Jet uses imagery to bring the luxury experience to life. High-resolution images, virtual tours, and videos of aircraft interiors and exteriors give customers a glimpse into the company's Marquis Jet Card Ownership experience.

"We know that our prospects are highly successful and time-constrained, so we avoid extraneous information and unnecessary pop-ups that you might find on mass-audience Web sites," says Randy Brandoff, vice president of marketing for Marquis Jet. "Attracting luxury clients to our Web site requires a combination of intelligent online marketing efforts and consistently driving Web traffic through our online efforts."

Most of the visual elements, however, appear on www.flymclub.com, the mini-site for the m Club program, which is open to 100 club members. Program members who pay an introductory membership fee of $125,000 have access to an exclusive fleet of Boeing Business Jets.

Simulating In-Store

Of course, matching the upscale retail store experience to the online one is also a challenge for luxury names in the beauty and fashion world, such as Giorgio Armani. Last fall, the brand launched a new cosmetics site, www.giorgioarmanibeauty.com, which offers consumers the opportunity to browse and buy products that are only available at 30 counters in the U.S. Since 2001, consumers could find information on the Giorgio brand in a separate section on www.giorgioarmani.com, but were unable to purchase products. "The time was right in terms of consumer readiness to now expand that site to e-commerce," says Ava Huang, vice president of marketing for Armani Cosmetics & Perfumes. "The wide acceptance of e-commerce across all categories has been embraced by the beauty consumer as well, who expects to purchase his or her favorite products online."

ID Society, a New York-based Internet marketing and Web design agency, was charged with creating giorgioarmanibeauty.com, which uses the same design aesthetics as the other Armani-branded sites. "The real challenge was creating a luxurious shopping experience with strong Armani customer service in an e-commerce site that doesn't detract from the elegance," says Adam Berkowitz, CEO of ID Society. "The overall Armani brand attributes of 'minimal' and 'modern' led us to the overarching design aesthetic. Using simple accents and a healthy dose of air and spacing, the site evokes luxury quietly."

Unique to the site, and a first for Armani, is the Beauty Bar, which simulates the in-store counter experience for online shoppers, who can view all beauty products lined up next to each other. The screen seems to scroll through the products, which are illuminated once a visitor rolls over an item. ID Society also created an Armani Advisor section, where celebrity face designer Tim Quinn provides lessons on how to apply four various looks with direct access to purchase the products.

Since luxury consumers are accustomed to personalized treatment and service, a Register section on the site provides perks to loyal customers. In addition to free shipping and exclusive offers (such as special limited edition samples), customers can locate a record of their past purchases.

"More luxury brands are creating these programs not only to offer more personalized service, but also to make the consumer feel special, like they are aspiring to the luxury image portrayed by the brand," says Berkowitz. "Brand teams also want the consumer to feel so special that they will recommend the products and Web site to other friends, therefore becoming true evangelists for the brand."