SOCIAL MEDIA AND THE LUXURY INDUSTRY

By Joséphine Lipp & Alexandre Corda.

CONTENTS.I. Introduction ........................................................................................................................................................4 A. The idea B. The two key notions to our paper: Exclusivity & Accessibility 5 1. Exclusivity: from exclusion to individuality ..................................................................................................... 5 2. Accessibility................................................................................................................................................................ 6 C. The problem 7II. Luxury and Social Media as Social Phenomenon .................................................................................8 A. Luxury: a landmark in society 8 1. A notion to be defined – what is luxury? ...................................................................................................... 8 2. A Tradition set in history – Luxury’s role in the society ........................................................................ 9 3. The recent evolution of luxury brands to internationalization ......................................................... 15 B. Social Media: a revolution in the way people communicate 19 1. Introduction ............................................................................................................................................................. 19 2. What is Social Media? ....................................................................................................................................... 19 3. Social Media: A Sociological Phenomenon .............................................................................................. 21 4. Social Media: a Technology ............................................................................................................................. 22 5. Social Media or the Era of the Consumer ................................................................................................ 23 C. Two Social concepts necessarily meant to be confronted 25 1. A reality that overtook the brands’ wills .................................................................................................... 25 2. A complex and challenging relationship: the luxury industry & digital ......................................... 26III. As social media marketing is becoming inevitable, Luxury Brands are starting to embraceit A. The social media phenomenon must be put into perspective 29 1. Luxury brands should not be refining themselves to match social media ................................ 29 2. Social media simply is where your future consumers are. .............................................................. 30 3. Luxury customers are online and want to interact with brands ................................................... 32 B. Brand Content Strategy, Luxury and Social Media: the good formula? 34 1. What is Brand Content? .................................................................................................................................. 34 2. The evolution of Social Media toward Professional Content and Social Entertainment..... 36Social Media and The Luxury Industry 2

3. Why does Luxury like content? ...................................................................................................................... 38 4. How can Brand Content Strategy help Luxury Brands engage on Social Media? ................ 40 C. The Digital Environment and the Luxury Experience 43 1. Crowdsourcing: an option for luxury brands? ........................................................................................ 43 2. Social media are an interesting way of enriching the luxury experience online ..................... 46 3. Digital in the larger sense is key to the luxury experience ................................................................ 47IV. Recommendations......................................................................................................................................... 50 A. Dos and don’ts: golden rules and lessons to learn 50 1. Some key findings ................................................................................................................................................ 50 2. Lessons learned and recommendations .................................................................................................. 52 B. Content strategy for luxury brands: what type of content can be used? C. Analysis of luxury case studies in social media 64 1. Louis Vuitton or How to Master the Art of Social Media .................................................................. 64 2. Burberry: Why are the Brits always a step ahead? ............................................................................ 68V. Conclusion ........................................................................................................................................................ 72VI. Bibliography ..................................................................................................................................................... 74VII. Appendix ............................................................................................................................................................ 76Social Media and The Luxury Industry 3

I. Introduction A. The idea To introduce this paper, which studies the complex relationship between social media and the luxury industry, we wanted first to establish the foundation of our idea. Early 2010, when we first started looking into the subject, luxury brands were struggling with how to handle social platforms such as Facebook, Twitter or YouTube. Conversations around these brands were already happening, but with the potential of yielding varied bad publicity. Brands did not know how to tackle this lack of control over “their” image. In 2010, Cartier still had a profile on MySpace – which has recently sold for $35 million, after being bought by News Corp for $580 million six years ago. However, Burberry had just launched its Art of the Trench project in association with Fashion street photographer Scott Schuman, best known as The Sartorialist. The Art of the Trench was one of the first attempts by a major luxury brand at social media. To reach a new and younger audience, a blog – The Art of the Trench - was created showcasing trench coat owners photographed by Scott Shuman. "We are now as much a media-content company as we are a design company, because its all part of the overall experience. So its a big deal. Its changing the whole system of buying, and the whole cycle of production. Basically you can buy every bag that goes down the runway and every coat and all the make-up as well." Christopher Bailey, Burberry’s Iconic Creative Director - October 2010. With such a statement, Christopher Bailey set the tone, proving that brands needed to create their own content for the digital space. Luxury brands are seen as pioneers, the promoters of a certain art de vivre. People aspire to become involved with inspirational brands, almost as a form of distinction. Brand content is at the core strategy of luxury communications because it is what people are going to talk about. By providing exclusive content to their fans, brands control what people are reacting to and can also measure what interests people most. In June 2011, Burberry had almost 7 million fans on Facebook. One of their Facebook posts can easily get 13,000 likes and 900 comments. The brand has always been a tastemaker; the only difference is that people can now easily discuss how passionate they are about the brand, constantly reinforcing its power of influence. All along the way, Burberry has had a clear strategy to make sure its presence on social media would continue to enrich the brand, and on a longer term, remain iconic for younger generations. Social Media and The Luxury Industry 4

Following a completely different path, DKNY recently won four of the eight awards presented at the Fashion2.0 awards for Best Twitter, Best Mobile App, Best Blog and Top Innovator . Its Twitter account @DKNY is 1embodied by one of its PR representatives: “Im your well-placed fashion source bringing you behind-the-scenes scoop from inside Donna Karan New York & DKNY and my life as a PR girl living in NY.” Personified,its Twitter account gives a human voice to the brand, communicating as someone reporting from the insideof the fashion house. It sets the brand’s lifestyle, becoming an inspiration for all its followers. With almost350,000 followers it has been a great success, giving a strong online presence to the brand.In a year’s time, luxury and fashion brands have been experimenting in social media in many different ways,as we will see in this paper. One main question remains: have these brands succeeded in maintaining theirexclusivity while becoming easily accessible to everyone? B. The two key notions to our paper: Exclusivity & Accessibility 1. Exclusivity: from exclusion to individualityThe English word exclusivity comes from the Latin word exclusivus, which means to exclude. In fact, theconcept of exclusivity is linked to the notion of luxury. Historically, luxury was a privilege of class and status.Whatever the poor could not have but the wealthy could was considered as a luxury. It was not somethingto be experienced just personally, but rather as a showcase of your wealth, a social distinction, and thusexclusive. The concept of exclusivity was inherent to the concept of luxury.As the French philosopher Gilles Lipovetsky explains, we have now entered the era of the individualization ofluxury . In wealthy countries, people no longer acquire luxury goods for its social meaning, but for the 2particular experience it brings. People wear affordable products from a large retailer and at the same timean expensive piece. You don’t buy luxury for its “showcasing” quality, but because it is made of the finestmaterial, it is technologically advanced or because it is unique. People acquire a luxury product to get theexclusive feeling that you own something that makes you special, something that is only yours. As we cansee, as the concept of luxury has evolved, so did the notion of exclusivity.For today’s marketers, the term exclusivity resonates very much with scarcity. Ed Burstell, Sr. VP ofBergdorf Goodmans Bergdorf Goodman said that, "To set itself apart, Bergdorfs has always looked forthings that are in tight distribution and preferably exclusive.”" In a world where everything travels so fast 3and where companies are selling the same products around the world, there is a personal need to ownsomething that will give customers this feeling of exclusivity, of owning something special. Limited editionslike Lanvin for H&M, aim to offer the Lanvin designs and quality for a much more affordable price. They fulfillthis need, while offering the possibility of a larger audience access this particular side of luxury. The notion of exclusivity is also very much bound to the relationship people have with luxury brands. Owninga luxury item guarantees being treated in a certain way, as if one were a member of a particular club. LouisVuitton, in its Champ Elysées Maison, distributes to its best foreign consumers a list of the finest productsyou can find in Paris. There is an exclusive relationship between the consumer and the brand. All this showshow much the notion of exclusivity has evolved towards something very personal, all about the experience.1 DKNY sweeps Fashion 2.0 Awards, Mashable, February 16 2011. th2 Du luxe ostentatoire aux luxes émotionnels, La Revue des Marques, numéro 53, Janvier 2006.3 TWO WORDS- EXCLUSIVITY & INDIVIDUALITY TREND REPORT, We Connect Fashion, October 2006Social Media and The Luxury Industry 5

In an article entitled Luxury Marketing Myth: Exclusivity is critical to maintaining luxurys allure , Pam 4Danziger for Unity Marketing, described the notion of exclusivity as “an old European myth” on luxury andstated that it does not appeal to democratic American customers. Used in its original meaning, it has anegative intonation and should thus be used very carefully: “Exclusivity for the sake of exclusivity, asexpressed by the European luxury ideal, is not what American luxury consumers value, rather its anexclusiveness derived from the ability to express a personal point of view, an attitude and ones uniqueness.”Whether or not the debate about European luxury versus American luxury actually makes sense in thisparticular case, it shows that exclusivity now relates to the individual, it’s about delivering your “uniqueness.“The term exclusivity does not hinge on an opposition of classes, as it now relates mostly to this verypersonal experience received via luxury. 2. AccessibilityAs an interconnected network, the internet provides twenty-four hour access to anyone with a connection.For instance, the appearance of e-commerce opened a whole new way of shopping. It meant boutiques wereopen twenty-four hours a day, seven days a week. No disruption. E-commerce websites allow buyers to shopproducts whenever they want. And this is just one of the many ways the internet has completely changedour relation to accessibility. People can now access multiple services allowing them to learn, to read, toshop, to plan at any time. Accessibility has always been a fundamental parameter of the internet. Socialmedia have added the ”people” parameter to this.“The essence of social media is to occasion or enable social interaction among groups of people, whetherthey are known to each other or strangers localized in the same place or geographically dispersed.” Oxford Dictionary of Media and Communication. 5Social media is a revolution in the way people communicate. Information that used to be bound to your closecircles now has the ability to reach a much wider audience, because, in a sense, people have becomeaccessible. And it is not just about reading this information – in magazines, newspapers, encyclopedias, etc.Social media is founded on the principle that users are active. They can bring their own piece of informationto the web. In May 2011, despite MPs naming Ryan Giggs as a super-injunction football star, informationabout his private life was revealed on Twitter and then spread all over the internet. The press, because ofthe super-injunction, could not reveal the information but users did.User-generated content is key to the notion of accessibility as we are trying to envision it in this paper.People are no longer passive about the information they receive, they can also share it, comment on it andentire movements can happen because of it. The recent Arab Revolutions are proof. Now that strangerscan exchange their common beliefs on social platforms, they can also organize themselves to make therebellion a success. And even when governments restrict access, there are still other ways, other platformsto communicate… The ability for users to be active has given a completely new dimension in accessinginformation on the Internet.This notion of accessibility makes all the more sense with the increasing number of smartphones found insocieties. For a long time, the internet was only accessible from your desktop. Now is the era of the mobile4 Luxury Marketing Myth: Exclusivity is critical to maintaining luxurys allure, Unity Marketing, 2004.5 A Dictionary of Media and Communication. First Edition by Daniel Chandler and Rod Munday. Oxford University PressInc. Oxford Reference Online. Oxford University Press. Bibliotheque Sciences Po. 3 July 2011Social Media and The Luxury Industry 6

internet. Social media combined with mobile internet have made us enter a period of time where the digitalspace evolves faster than ever. For brands, there is a necessity to match this demand for constantaccessibility. People want to access the catwalks, want to see behind the scenes of their favoritecampaigns, want to shop directly from where they find the information. There are very few limits to howmuch of real life can be transposed into digital so that it is accessible to all. C. The problem April 12 , Keane, a band partaking in Burberry Acoustic– Burberry’s initiative to support British music th– was shot on the Great Wall in China. The video was streamed on Burberry.com and Youku.com. April 13 , ththe band performed a concert – live-streamed on various websites – to celebrate the launch of theirflagship Asian store in Beijing.Luxury brands have always been ahead of the game in various domains. Chanel reinvented the femalesilhouette by liberating it from the corset. The Mercedes S-class was one of the first series cars to have anairbag. The Jagger LeCoultre wristwatch called the Reverso was invented to avoid Polo players breakingtheir watch during games. Employing specific materials (usually quite costly), through the use of expensivetechnology, or by provoking strong societal changes - because the elites were dictating what was to bedone; luxury brands have been, for a long time, implementing solutions that were then dispersed to a wideraudience.The situation has evolved and the challenges the industry has to face in today’s world are very different.Expectations toward the notion of luxury have changed a great deal: with globalization and the appearanceof new classes of wealthy people in developing countries; with technology evolving extremely fast, offeringmany new ways to communicate and to perpetuate the experience even outside of the traditional retailexperience; with Western societies evolving and new behaviors appearing, such as spending a lot of time onsocial networks.How the luxury industry is facing all these challenges without losing what makes it so special is the mainpurpose of this paper. People from all over the world and from all different types of social backgrounds areengaging on the web and more precisely, on social media. How are luxury brands suppose to communicate?Who should they be engaging with? Where should they be engaging? What techniques should they be usingto perpetuate and enhance this exclusive experience they have been creating through the retail channel?We will try here to go back to the fundamentals of luxury, and try to understand what brands should bedoing in the digital space and more importantly on social platforms to maintain their identity and grow theirpower through these new platforms.Social Media and The Luxury Industry 7

II. Luxury and Social Media as Social Phenomenon A. Luxury: a landmark in society 1. A notion to be defined – what is luxury? “Luxury is not the opposite of poverty. It is the opposite of vulgarity.” Coco Chanel. Such are the words the priestess of Fashion and Luxury used to describe our concept. She wasn’t relating luxury to price, exclusivity or any other marketing notion. She was linking luxury with style, with a certain sense of taste and a way of life. She was adding to the notion of luxury another dimension, a sociological and historical vision. As the author Jean-Noel Kapferer was describing it, “luxury is first and foremost a culture 6 before being a market or an industry.” Luxury could be defined in a thousand different ways, depending on who defines it and for which goals. But we are going to build a certain definition of luxury, using different notions that are linked to luxury while knowing that it will never be a comprehensive and final definition. Luxury is often – if not always - linked to an idea of quality and perfection. Everything has to be perfect in an “Haute-couture” dress, from the label to the hem, and it could be done all over again until perfection is achieved. Luxury is therefore linked with the idea of attention to detail. There are important expectations from consumers of luxury brands, and this quality is expected at every stage – from production to communication, services, experience and sale. Quality is part of the brand itself and part of its value. This is why, for example, at Hermès, there is no Director of Quality. According to Christian Blanckart, previously director at Hermès, it would be a serious issue if one day, they felt the need to create such a position. This idea of quality and perfection is expected because luxury is traditionally associated with crafted and hand-made products and a certain know-how that is specific to the brand. Luxury is – or should be – the opposite of industrialization. But this is a more controversial subject as LVMH, the French luxury goods conglomerate, has often been described as the founder of the “industrialization of luxury.” The know-how and hand-made notions are often associated with cultural inheritance – in a company or in a country. It is something very precious and respected in some countries - like France, which is known as the country of luxury - as a proper competitive advantage. Luxury and heritage are often two words that come together – whether it is the heritage of a brand, a company or the luxury heritage of a country. As Patrizio di Marco, chief executive of Gucci, has said, “Authentic heritage is something that you can see, feel and sense in every product.” Luxury brands always have to maintain this balance between past and future. They must be leaders, always a step ahead and relevant to “now,” but based on their authenticity and without forgetting their history. 6 Luxe Oblige, by Vincent Bastien and Jean-Noel Kapferer, Editions Eyrolles Social Media and The Luxury Industry 8

Heritage has become a true debate in a highly competitive market: should brands be focusing on theirheritage and craftsmanship or move forward in the digital world?Karl Largerfeld is often using the words of Goethe to describe how he is using heritage to create collectionsfor Chanel: “Make a better future by developing elements from the past.”Quality and know-how are then supposed to be part of the heritage of the brand. Parizio di Marcosummarized all those ideas by saying that “Authentic heritage is built upon real traditions and values, builtupon experience, passion and know-how handed down over generations.”Another key notion used to define luxury is scarcity. Luxury goods are often described as being scarce fortwo main reasons. First, high quality and handmade products could hardly be mass-produced. The secondreason is more sociological: people often want what is scarce because it makes them feel special, having acertain value due to the possession of this product. It was determined that usage of luxury goods issignificantly related to a satisfaction of inner needs of the personality; these needs are the main factorstimulating usage of luxury goods.Luxury is not always or shouldn’t always be a synonym of price. Some goods could be expensive withoutbeing known as luxury and on the contrary luxury goods might not be the most expensive ones. However,because of all the characteristics of luxury that we described before, luxury goods are, without being a rule,often linked to high price. Luxury goods have such unique characteristics and brand identifiers thatconsumers are willing to make a special purchasing effort. This purchasing effort is often synonymous witha high price, but it could even be the travelling of distances to obtain this special good, or waiting a certainamount of time.Therefore, what is more important is not the price in itself, it is the effort made by the customers.Aside from all these notions we described earlier and which are fundamentally associated with the definitionof luxury, the most important thing to say about luxury is that before being linked to a product, a brand, andan industry, luxury is first and foremost a more philosophical and sociological notion as seen in CocoChanel’s definition. A product could not be a synonym of luxury in itself. Luxury lies in a certain art de vivreand way of thinking – products are simply carriers of these values. 2. A Tradition set in history – Luxury’s role in the society a. Universality of luxury and its role in the societyLuxury is not a modern thing, nor a concept that is peculiar to developed countries and civilizations, but auniversal idea. Luxury is a subjective notion, and we will develop this point later on, but it has always beenpart of different societies across the world. Luxury is a universal phenomenon that is observed even inprimitive civilizations that didn’t have today’s levels of economic development. Therefore, in Ancient Greece,luxury was omnipresent in their society, through different sorts of rituals. Egyptians already had a notion ofwell-being and beautiful luxury products, and were big consumers of jewellery and perfume. It is alsoobservable in primitive societies with the notion of celebration and festival, which are, according to theFrench sociologist Gilles Lipovetsky, a sign of a certain luxury. The etymology of luxury, Luxus in Latin, meansexcess, debauchery, glory and splendour. The character itself of luxury is based on conspicuousconsumption and absence of foresight, things that you already find in primitive celebrations.Because luxury is a universal notion, its role in the society has always been discussed and questioned,especially by philosophers or sociologists. We are going to go through the primary ones that luxury sustains.Social Media and The Luxury Industry 9

• Honorific function as per Malinowski and Mass theoryBased on this notion of luxury as excess and conspicuous consumption, two famous anthropologists, theEnglish Bronisław Kasper Malinowski and the French Marcel Mauss, explained another fundamentalfunction of luxury in the society. They conceptualized the theory of gift exchange and its importance tocreate a balanced society. The exchange process creates social order and a breakdown in this giftexchange process brings social conflicts. In this gift exchange process, luxury has an honorific and socialfunction as it leads to superior positioning. The luxury gift will enable the man to establish himself as theleader and the headman in the society by giving him superiority. The leader becomes the one who acquiressuperiority through an unbalanced exchange process by giving luxury goods. • Inequalities and Max Weber theoryLuxury is also seen as being a sign of distinction in the society. As per the theory of Max Weber, Germansociologist and economist (1864-1920), luxury is not something contingent in a society. Luxury is asnecessary as inequalities. Because inequalities and social classes have their origin in differences ofeconomic distribution, luxury is just the transcription of the hierarchy in the society and of the inequalities.As Gilles Lipovetsky writes when explaining the theory of Max Weber, this is because a society withoutinequalities, without escalation of spending does not exist, that luxury is a universal phenomenon.Luxury does not have to be analyzed only from a sociological point of view, and only as a social sign ofdistinction and inequalities. Luxury has also been a subject of debate and questioning for a lot ofphilosophers. Luxury does not only provide premium goods and is not only just consumption: luxury has alsoa holy function, a certain way to relate to time and is a synonym of pleasure. • A Holy and sacred functionLuxury has a certain holy and sacred function in the society and it is probably one of its oldest roles. Duringwhat is called the period of the “Luxe sacré,” the main function of luxury was religious. Luxury was a way forpeople to buy themselves a proper passage from life to death. Then, there were two different componentsin luxury: the gift, which was often a sacrifice to the Gods and a destruction process. Excess andoverconsumption enabled people to recreate the origin of the world, which always originated fromdestruction and chaos. That was symbolic of celebrations, carnivals or holy festivals: to be reborn andrecreate through destruction, thanks to the magic role of luxury. Luxury was far from all those economicideas that we have in mind now when thinking about it. It was a holy role in a very religious environment,whatever the civilization and the country. There was a strong sacrificial dimension in luxury: first there was aceremony between tributes to exchange gifts and then luxurious products were destroyed and burnt toprove the strength of the headman.In those societies, the role of luxury was totally different from the more materialist image that we have ofluxury. This role was more spiritual. In most of civilizations, religion and society are the reason for thecreation and development of luxury.Social Media and The Luxury Industry 10

• Luxury and eternityGilles Lipovetsky develops this relationship between time and luxury in his book “Le luxe éternel”. He explainshow in the love for luxury goods there is always a quest for eternity. Luxury brands have to deal with thischallenge: follow the trend and keep innovating without losing their roots and the importance of carryinghistory in its products. When buying luxury goods, customers are not only looking for good quality and ameans to show-off; they are also looking for brands offering iconic products, brands set in history. Buying adiamond (DeBeer’s slogan is: A Diamond Lasts Forever) or a Louis Vuitton trunk certainly brings a certainsense of eternity. These products will be kept and most probably transmitted to the next generation. Afterall Patek Philippe advertisements say: “You never really own a Patek Philippe. You merely look after it for thenext generation.” This idea of eternity brought by luxury goods lies in a particular way of consuming. Luxury isagainst the idea of mass-consumption. When people consume luxury goods, there is a specific concern foremotion, for the experience that is delivered not only by this product but also by the brand. This leads us toanother key role of luxury: dreams, emotion and pleasure. • Dreams, emotion and pleasure “Le luxe, c’est créer un rêve qui perdure…” Jean-Louis Dumas-HermèsIf this role is really controversial and has been criticized in the past, mainly by religious organizations andphilosophers such as Rousseau, luxury brings back to society the notion of dream and magic. Luxury goodsexalt the senses. They create emotion. Luxury is first and foremost a personal and individualist pleasure.Luxury could be a synonym for sensual pleasures. People are not only buying a luxury good for the product,but also for the experience they are going to live with. Luxury goods do not belong to elementary needs asDimitri Mortelmans was explaining. “Luxury has been viewed as useless and superfluous because it belongsto the realm of desires instead of elementary needs.” This is why luxury goods have always been linked todebauchery and excess. Luxury is also a synonym for “art de vivre” and perfection. This is a way of living, adesire to bring perfection into our everyday life; to transform our daily needs into something magical. In amore common function, luxury rhymes with a certain sense of elegance in the way of life, from the art ofentertaining to the art of living, from an elegant outfit to gorgeous decors. • A driving force behind the economy, techniques and artA last important function of luxury in society is its importance for the economy and for the country. The mainphilosopher behind this idea was Voltaire, who joined the English school opposing the school of Rousseauand supporting the idea of Luxury. While Rousseau was condemning luxury for the wrong effect that it hason people, Voltaire was one of the main advocates of luxury during the Enlightenment. Developing someideas that Mélon was already discussing in his book “Essai politique sur le commerce,” Voltaire explains howluxury is a benefit for an economy and a country. Luxury should not be condemned because it bringsprosperity to the state, as well as happiness to people who consume it. Above all, luxury enables smallartisans and the working class to earn a living. Luxury is a driving force for the economy: it is the origin of alot of artistic and technical discoveries.Social Media and The Luxury Industry 11

As we have seen all along, luxury has always played an important role within society – even whencontroversial: whether it is as a religious symbol, as a key driving force for the economy or asentertainment. Useless for some, mainly because it does not belong to elementary needs; fundamental forothers, luxury is a universal phenomenon. But as the professor Dimitri Mortelmans was explaining, “Luxuryis defined as a specific kind of sign value, produced in specific narratives and used in processes ofstratification. As a sign, it becomes apparent that luxury is a relative concept. Every social group can be saidto have its own luxury. Every social group has in fact a different kind of luxury”. The notion of luxury can evolvefrom one culture to another, but also varies with time. The idea of luxury itself is universal and timeless. Itdoes not mean that the products we consider as luxury goods are not changing. In order to understand thisevolution, we need to look back into the recent history of luxury, and we will need to focus on the quest foridentity of luxury nowadays to understand the problems and problematic which are raised today to luxurybrands. b. Evolution of luxury since 19 century, modern luxury and its quest for identity th • The revolution of luxury and the first signs of an industrialization of luxuryAt the end of the 19 century, the luxury industry was facing its first change towards a future thindustrialisation. The traditional idea of luxury during the 19 has changed. Luxury was no longer only about ththe art of entertaining. The emergence of a few creators was going to deeply change the perception ofluxury: some new signs of distinctions appear in the society, such as perfumes or fashion. At the heart ofthis revolution, some creators are often viewed as pioneers. The main ones are Guerlain, who developed theinterest of luxury consumers for perfume, and Worth for fashion. Worth was the first individual to developthe “Haute Couture.” This was still the end of the 19 century; those changes are still minor in comparison thto what the luxury industry would go through in the 20 century, but the society was living the first steps of ththe industrialisation of luxury.The “old model,” or shall we refer to it as a “traditional” model, was artisanal and aristocratic. Luxury goodswere not products of creators but artisans. The goods were bespoke, handcrafted and unique, and probablythe main difference was that the customer was at the heart of the creation. Those first changes made inpeople’s mind with creators like Worth, or Jeanne Lanvin during the 1920s were amplified with theeconomic prosperity after the WWII. The successes of some “Maison” like Chanel are considered examplesby an entire generation of new creators who took advantage of the new economic prosperity. Many newMaisons de Haute Couture were financed thanks to rich entrepreneurs. The most famous one is MarcelBoussac, who financed the creation of the Christan Dior Maison in 1947. At the end of the 1940s, morethan hundreds of Maisons have the label of “Haute Couture.” This is the period of the creation of famousMaisons that are still very well known today, Balmain in 1945, Givenchy in 1953, Guy Laroche in 1957,Courrèges in 1964. Important international media coverage and a noted quality to the work contributed tothe development of the fame of Parisian fashion. At the same time as this important increase in the numberof Maisons, this was an important period for creators. This was not the end of bespoke fashion, butcreators now became famous for their style, their name, they established themselves and imposed theirown taste to the consumers. This was the triumph of the creation and the creators. Luxury was not onlydefined because of beautiful fabrics and their quality, luxury was now also linked to a name of a Maison, aname and the style of a creator. It took an important part in the revolution of luxury and it changed thecreation itself: the logic that opposes the model to copy is now developed.Social Media and The Luxury Industry 12

An important phenomenon that took part before the 1970s in this “revolution of luxury” is the developmentof luxury groups. If the number of brands increased quite a lot during this period, the luxury market had lessand less companies. The phenomenon of concentration in the luxury industry found its origin in a neweconomic logic. After WWII in France, some industrials started to understand the importance of the luxurysector for the economy and as a competitive advantage for France. This is the period of the creation of the“Comité Colbert,” mainly created by Lucien Lelong and the perfumer Jean-Jacques Guerlain. The initialpurpose of the Comite was to relaunch an industry that suffered from the war and that could be anpowerful industry for the French economy. It soon became a proper vehicle in defending an industry that isnow seen as a French symbol abroad with more political and economical stakes. If the evolution of the luxuryindustry has a lot to do with the industrialisation of the product itself, this financial concentration in theindustry and the control of the main companies and Maisons by some rich investors took an important partin the revolution of luxury.The main aspect that lead to a revolution of luxury is the industrialisation of the products and it started atthe early 20 century. The sector that pulled this industrialisation is the sector of the perfumes and thFrançois Coty embodied this trend. He created, in 1904, the “Rose Jacqueminot” based on natural andsynthetic essences, sold in a bottle designed by René Lalique. He did it again the next year with its perfumeL’Origan and settled a new model of production for the following years. The perfume industry then became aprecursor to the evolution of the luxury industry, and the 1950s and 1960s would accelerate thephenomenon. Because of this expansion of the perfume sector, it became a sector in itself and not justlinked and dependant on the fashion industry and Haute Couture Maisons. This sector soon tended to usemass production and changed the rules of distribution of the luxury industry. Changes in distribution, massproduction and diversification of the brands with a strategy of extension are the main trends in the luxuryindustry that started to emerge before the 1970s. Some examples illustrate those changes quite well: “MaGriffe”, the perfume that had samples distributed in Paris in 1946; the development of the duty-free shopsin the airport selling luxury goods and the creation in 1972 of the Cartier boutique des Must, which sellsaffordable Cartier products using the Haute jewellery image and mass production. • Since the 70s, modern luxury, marketing and its quest for identitySocial Media and The Luxury Industry 13

All the changes that happened after the 70s are just an acceleration of the evolution that happened before:the industrialization, the concentration of the luxury industry in big groups, the development of new types ofluxury products, the importance of the brand and creator name in the luxury buying process…One important change, which is something new, is the important development of marketing as a key part ofluxury brands strategy. This period is characterized by the important development of the collaborationsbetween artists, models and brands. A symbolic example of this new importance of marketing was the1977 launch of the perfume Opium by Yves Saint-Laurent, considered to be one of the first marketingcampaigns for a perfume created by a luxury brand. Helmut Newton shot the first advertising for thisperfume with the model Jerry Hall. Steve Hiett, David Lynch and Tom Ford also contributed to the nextcampaigns for the perfume with other models.Social Media and The Luxury Industry 14

This new strategy adopted by luxury groups, towards a more commercial, marketing and financial focus,lead to more mass production. In the perfume industry for instance, this translates into a huge increase incosts for the launch of each new fragrance. At the same time the competition is getting wider – mostbrands have a perfume nowadays – making the market cluttered and reducing the product lifetime.All those changes within the luxury industry have been and are still criticized by industry professionals. Themain concern is to develop the industry toward a commercial-only logic and to no longer focus on luxuryitself and what has to be luxury. Criticism has been made on the mass-production in industries like perfumeas well as the production in the same laboratories for different brands of perfumes in big luxury group suchas LVMH. The same evolution can be observed in the “Haute couture.”. The number of Maisons has beendivided by two in less than ten years, and the premium and high-end ready to wear seems to have replacedthe Haute Couture. All these evolutions are often linked to the economic situation, the crisis and the financiallogic that drives certain strategic decisions in the luxury industry. In an interview in the newspaper LeMonde, Franco Cologni, CEO of Cartier, was explaining how luxury has changed because of the consumersbut can also be explained by the strategy implemented by certain companies. According to him, theimportance of the brand as a guarantee of quality is a good thing but he is against the “logomania” which isbased on an abusive use of the logo and the name of the brand to sell products at a higher price. He raisesan on-going concern for the luxury industry, which is the notion of scarcity. He thinks that it is fundamentalfor a brand to keep being more demanded than offered and that it is a big issue today due to a hardcompetition and an important increase of consumers of luxury, especially from the BRICs.Thus, it is important to talk about the other important characteristic and change in the luxury industry afterthe 70s: the emergence of new consumers, and thus, new strategies. 3. The recent evolution of luxury brands to internationalization a. New luxury consumers in developed countries and strategy of extension of the brand territoryWhat we call luxury today seems quite distant from what it represented in 19 century societies. One of the thmain criticisms coming from “purists” is that luxury is now everywhere. There is an overabundance andluxury is ubiquitous, which blurs the frontier between what is luxury and what is not. Nowadays, luxury seemsto be accessible to everyone. Luxury brands are developing offer strategies (vs. demand strategy whichused to be the rule) to successfully sell to different types of luxury consumers. Luxury became even morecomplex than it was before and it is now possible to establish a segmentation of luxury with accessible,semi-accessible and inaccessible luxury. Pierre Bergé was explaining in a talk in 2002 how perfumes havebecome convenience goods because the products need to be at the taste of people from all over the world;from Americans to Japanese. According to him, it led to a waste of quality and originality. Users’requirement specifications have been too restrictive; there is no longer enough liberty to create a properluxury product.In mass consumption societies, luxury is no longer reserved to the happy few, slightly changing its role at thesame time. One out of two European consumers is now buying a luxury product at least once a year. Luxuryconsumption has become more personal and individualistic. The consumption of luxury goods is now lessthe result of social pressure, and more the expression of a true desire. If there truly is a democratization ofSocial Media and The Luxury Industry 15

luxury because society has spread widely the taste for luxury and well being, brands being the expression ofthese tastes, there is still an important desire for luxury. The evolution of luxury is complex and has differentorigins – globalization, concentration of the luxury groups, industrialization, the economic crisis … - and weare now facing new strategies from brands in an attempt to adapt to a much broader audience. At thesame time that brands are focusing on their core businesses, they tend to extend their brand territory.The first important strategy is the strategy of “brand stretching.” The objectives behind a brand stretchingstrategy are plural: increase the turnover, broaden the targets, increase the average spend per client,reduce the seasonal demand and reduce the risk of having few products. Such strategies are well known inthe luxury fashion industry because it is easier to decline the offer in fashion and develop the accessorising.Accessories and perfumes are the most developed products for such a strategy. Source: Luxe et Brand Content, QualiQuanti and SAME SAMEBrands like Jimmy Choo or Vanessa Bruno, to name a few, have differentiated themselves by developingproducts like sunglasses, scarves, leather goods but also new collections for men or children for example. Itis a more complicated strategy to adopt for jewellery and watch brands because of the core business itself.Such strategies have strong advantages for luxury brands such as increasing brand awareness as well as adiversification of target but at a huge risk of losing its luxury image.The second strategy is the strategy of deepening in the core business of the brand. To attract a broaderaudience, those brands are developing different types of collections to segment the offer: from upmarket toseasonal and unlimited collections. At the same time that brands are developing second looks to reach ayounger audience especially with products that are more “entry-level” and more affordable to startconsuming luxury. In general, those collections are cheaper and have a modern and younger style like thecollection Etoile by Isabel Marant, Marc by Marc Jacobs, Athé by Vanessa Bruno, etc.Those new strategies are complex and at a risk but are necessarily driven by business and financialobjectives. It also reflects the fact that consumers have changed and luxury no longer has the same role insociety. It is important to raise the importance that “non luxury consumers” have taken in the business andcommunication strategy of luxury brands.Social Media and The Luxury Industry 16

Source : la pyramide Eurostaf du luxe b. Crisis, economic development of the BRICs and focus on emerging consumersSince the early 2000s, the luxury industry has known another important evolution, with new strategies forluxury groups based on emerging consumers. France is still the leader worldwide when it comes to luxury,and this sector represents the French people’s first exportation industry outside Europe – 80% of thebrands’ turnover made abroad - but the economic crisis in Europe and in developed countries has urgedluxury groups to rethink their strategy and target new potential consumers. In a very globalized world andafter the recent economic crisis, luxury groups have then tried to develop themselves and their turnoverabroad, focusing on emerging countries like North America, Asia, especially China and India and someEastern European countries. After the economic crisis, the luxury industry has overcome the recessionsince 2010 with a growth of 11,1%, thanks to the Asian countries, with China as a leader. Source: EurostafRelying on those Asian and BRIC countries for the luxury growth also means that luxury brands have nowproperly taken into account those new consumers and their culture and specificities when it comes toproducts, services, experience, and communication. Luxury brands can’t just use their Western imageanymore to sell luxury brands to those countries that became more mature.Social Media and The Luxury Industry 17

Those new consumers – i.e. mid to upper class - are really attracted to luxury goods, especially Europeanones: French, Italian, and German brands are always in the top mentioned. Luxury products are for them asynonym of high quality, but also of innovation, which is a difference of perception from western consumers:81% of Russian people surveyed think that luxury products are the best in terms of innovation, 84% of the 7people surveyed in India and 76% in Mexico think this as well. Those differences in perception of luxurygoods and brands mean that luxury brands have to adapt their communication toward those newconsumers. China is expected to be the most important market for luxury goods in 2015 but luxury brandsare still struggling to talk to those new consumers who are using Internet as the first influential media in thebuying process . Educating these new consumers and initiating them to what is luxury, how to use the 8products, what is the history, the “savoir-faire”, etc… is a fundamental and highly strategic aspect for luxurybrands according to Matthieu Guéval . In a report from DLG (Digital Luxury Group) on China Connect , it is 9 10noted that one of the particularities of Chinese consumers is that they are eager to learn more. Marketingcampaigns focusing on consumer education creates greater impact. Another really important thing aboutthose new consumers, and again, especially Chinese ones, is that luxury brands have to take into accounttheir cultural specificities. If luxury has to have multicultural codes, and have to keep them in luxuryadvertising and communication, it is crucial they also inform the local culture: marketing adaptation cannotbe underestimated when targeting Chinese wealth consumers. Some luxury brands have started differentmarketing and distribution strategies in those countries: from developing and increasing the number ofshops (Burberry, Ferragamo in China), to developing specific products for those countries (Chanel and theShanghai collection) to going even further and developing new brands (Hermès and the development of theirnew Chinese luxury brand, Shang Xia, in September 2010). The same questions have to be raised for thecommunication of luxury brands and it is all the more important when it comes to digital and social mediacommunication, as China has its own social networks such as RenRen, Sina Weibo, Tencent or Jiepang toname a few, and 50% of the online users being affluent (monthly revenue up to 2000RMD).Now that we have drawn up an overview of the luxury industry from its definition to its role in the society, itsevolution and its current issues and trends that it has to face, it is clear that the luxury industry could not becompared to any others, and that it has its own specificities. The luxury industry is not just another industry;it is first and foremost a social and cultural phenomenon and it is important to always keep this in mindwhen it comes to analysing any marketing and communication strategy. To be able to understand furtherthe challenge that this industry is currently facing in the digital age, we have to describe and explain what isthis other social phenomenon: social media.7 According to the World Luxury Tracking, an Ipsos survey made in 2008 on luxury with 6000 interviews in 7 countrieson the high-middle class.8 According to a BCG study in Asia9 Author of the book on brand content and Research Director at QualiQuanti Europe’s first conference on marketing and digital in China, organized by Stratégies Conférences in 201110Social Media and The Luxury Industry 18

B. Social Media: a revolution in the way people communicate 1. Introduction“The collection of people, hardware, and software -- the multi-access computer together with its localcommunity of users -- will become a node in a geographically distributed computer network. Let us assumefor a moment that such a network has been formed.” J. C. R. Licklider, Robert Taylor, The Computer as a Communication Device, 1968. 11In 1968, visionaries Licklider and Taylor wrote: “we are entering a technological age in which we will be ableto interact with the richness of living information (…) as active participants in an ongoing process, bringingsomething to it through our interaction with it, and not simply receiving something from it by our connectionto it.” Their idea was: “We want to emphasize something beyond its one-way transfer: (…) the part thattranscends “now we both know a fact that only one of us knew before.” When minds interact, new ideasemerge. We want to talk about the creative aspect of communication.”Licklider and Robert Taylor were already envisioning how this network of computers would becomeuniversal, and how it would be much more than a transmission data service but also a tool to create “newideas” through the interaction with or of its users. It would thus be the power of this virtual community thatwould allow the creation of a networked world with no boundaries for ideas, knowledge, exchange, etc.The internet is a product of the Cold War. Created in the 1970s, the initial aim was to protect key data incase of a nuclear attack. But during the 1980s, it became an academic exchange network, a place forknowledge. Then it quickly started becoming a means of mass electronic communication accessible toanyone having a telephone line and a computer.With its immense possibilities, the internet might be the greatest technological development of the 20 thcentury, allowing instant access to websites offering information about literally everything and anything. Thefirst stage of the internet – or web 1.0 – was about finding and reading content created by institutions orcompanies, the web 2.0 – also called the social web – is all about user-generated content. And this is whatwe are going to explore here. 2. What is Social Media?Before studying “social media” as a whole, each word should be considered separately to understand whatnotions, values and means are involved here. Social sciences define the word “social” as: “developing from orinvolving the relationships between human beings or social groups that characterize life in society.” It is themovement emerging from human relationships. The word Media relates to “the main means of masscommunication, esp. newspapers, radio, and television, regarded collectively; the reporters, journalists, etc.,working for organizations engaged in such communication.” Whereas social is more of an action, a notion,the media is the means. Considered, as a whole, social media would thus be defined as the main mean ofmass communication based on what comes from the relationships between humans.11 The Computer as a Communication Device, J. C. R. Licklider, Robert Taylor, 1968Social Media and The Luxury Industry 19

As a new concept, the definition of what is called social media is far from being set in stone. The termrelates to everything and nothing: it is basically any form of online publication allowing users to engage inconversations. That would be the generic definition, or one of them; publication meaning any sort of contentavailable to the public.But this definition does not satisfy us, as it does not embrace the online part. What is called social mediahere is restricted to online publications, or at least the effect it has online. And as soon as you consider theweb, you also have to keep in mind the technology behind it. Thus this definition is not satisfying, as it doesnot embrace the technological aspect that goes with it.In people’s minds, the word social media relates to a category based on user-generated content andconversations around this content. This category includes social bookmarking like Del.ico.us, socialnetworking sites like Linkedin and Facebook, social news like Reddit or Digg, social blogging platforms likeTumblr and many others. The main idea is that is a both an innovative tool and a social phenomenon. “Social media is "a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, which allows the creation and exchange of user- generated content." 12 Users of the world, unite! The challenges and opportunities of Social Media , Andreas Kaplan and Michael HaenleinThis definition takes in consideration both aspects: ideological and technological. The ideal of an open spaceworld where everything is about creating, sharing and discussing; but also having the ability to do so throughinnovative tools with enhanced user experience. The technology is needed to allow the user to enter thisnew era of the Internet. Without tools as easy to use as social networks, the presence of social plug-ins toallow users to share, browser extensions, etc, there would be no social web. It is the technologicalperformance that allowed the social revolution to happen. But these tools have appeared in a desire to solvethe engineers’ day-to-day problems. It is the need for these tools that pushed developers to create them.One way or the other, the idea of bringing the web to a next step and the technological progress are tied intogether to create the social web, leading to social media. Kaplan, Andreas M.; Michael Haenlein (2010). "Users of the world, unite! The challenges and opportunities of Social12Media". Business Horizons 53(1): 59–68. doi:10.1016/j.bushor.2009.09.003. ISSN 0007-6813. Retrieved 2010-09-15.Social Media and The Luxury Industry 20

3. Social Media: A Sociological PhenomenonThere is a debate on whether or not the World Wide Web has entered its 2 generation in terms of ndtechnology, but there is a general acknowledgement that there is now greater user participation,interaction, data sharing and networking. The web 1.0 was mostly used as an information source, thus thedomination of search engines like Google. The web 2.0 is about creating and consuming content. The notionof user-generated content is one of the main ideas of the web 2.0 and translates a massive change in theway people interact with each other. People have now entered a phase where they want to share what theydo, what they think, how they see the world; with everyone and through all social platforms. “Social phenomena are considered as including all behaviour that influences or is influenced by organisms sufficiently alive to respond to one another. This includes influences from past generations.” 13 John Markey, A Redefinition of Social Phenomena.In this case, we are focusing on human behaviours on social platforms and how we can consider that socialmedia is a sociological phenomenon. It is the observation of the “behaviouristic trend and the emphasisupon the objective nature of social life, study of groups, and group life, environmental study” that will allow usto determine if it we can say so here.With the web 2.0, and the phenomenon of creating and consuming content, notions of user-generatedcontent, social sharing, etc; we observe a clear evolution in people’s behavior. The human life is not boundanymore to the real life and continues on digital platforms where the conversation carries on.As specified in the definition, we are looking for “all behavior that influences or is influenced by organisms -humans in our case – sufficiently alive to respond to each other”. And that is where the term social mediamakes all its sense. It is the ability to have conversations online - to share content, to discuss, to laugh, tocry - basically to have a social life, to form groups, that conveys this idea that social media is a sociologicalphenomena.And it goes further along as social media have truly changed the way people interact and how they viewthemselves. People adjust their online identity to be consumed by others. Our identities on social platformsare not who we are but they are what we want other people to see us as. We only share what we want to.We forge our online presences so that people interact with us.David Armano wrote an article in the Harvard Business Review called Why Social Sharing Is Bigger thanFacebook and Twitter where he explains how “social media has led to “social sharing,” the broadcasting of 14our thoughts and activities.” Before we would only share “our thoughts and activities” to our closeenvironment: friends, family and co-workers. Now we are constantly responding to questions such as: what John Markey. "A Redefinition of Social Phenomena: Giving A Basis for Comparative Sociology." American Journal of13Sociology Vol. 31 (1925-26): 733-743.14 Why Social Sharing Is Bigger than Facebook and Twitter, David Ormano, HBR, 2010.Social Media and The Luxury Industry 21

are you doing? What do you like? What do you read? We have entered a new era on the Internet where weconstantly feel the need to tell others what we are doing/reading/viewing/eating/drinking… Social mediahave been reinventing the way we interact with our peers but even with people we do not know. And as anysocial phenomenon, at the start only early adopters would activate these tools – tweet this button, likebutton – but now it has truly become something the majority does. People are now entering this phasewhere they curate their social profiles because it is now also part of their social life.The initial dream of the Internet to create a platform where we could interact with information hassucceeded in finally taking place. But social media as a social phenomenon never could have taken placewithout the technological tools being activated. It is the combination of “the ideological and technologicalfoundations of Web 2.0” that have allowed the global Internet to enter this new phase. 4. Social Media: a TechnologySocial media have become a social phenomenon, but are first and foremost the use of web-based andmobile technologies created to facilitate social activities on the Internet. Web-apps, mobile-apps, social plug-ins, social platforms, social games, social comments, instant messaging, blog, etc: they all contribute tomake the web more social, to allow people to communicate, exchange information and commenting onother people’s status.As seen in Kaplan’ and Haenlein’s definition, social media are built on the technological foundations of web2.0: “web applications that facilitate participatory information sharing, interoperability, user-centered design,and collaboration on the World Wide Web.” Notions of user-experience (UEX) and user interface (UI) arekey in the development of social media. Web 1.0 was mostly an environment where people were passiveviewers of content that was created for them. Only the people able to code and who could understand thetechnology behind it were able to become users. With web 2.0, all changed as easy tools were developed toenable people to create their own content and to become active users of the Internet: it is the birth of thesocial web. User interfaces are re-designed to make the user experience as easy and pleasant as possible.The Internet is no longer reserved for people who understand how it works; you can now be a part of itwithout being able to understand the technology.And this is where it has become fantastic. The initial dream of the Internet was a network of information. Itwas designed to become the “multi-access computer together with its local community of users” but wasfor long reserved to the people that know how to put this information on it. You could only be an active userof the Internet if you had a website for instance and if you knew how to code. But it is because thetechnology and the user-experience has improved so much that the web has now entered its social phase,becoming a true network! Micro-blogging platforms like Tumblr now allow you to extract any content fromany website that has a Tumblr share button and directly re-blog it. The like and tweet this buttons haveliterally enabled people to actually do it because it is so easy. Mobile apps have allowed people to be activeon the web even when they are not on their computers and have allowed a full change to the way peopleinteract. Within real conversations, people will still interact with their mobile devices to verify someinformation, or send notes to themselves about things that they have recently seen. In a shop, people wouldupload the photos of the clothes they are willing to buy on Facebook and ask their friends’ opinions. All thiscan only be allowed because the technology has initiated the change and has been able to keep up andembrace people’s will to share and curate and document real life as well as digital life.Wikipedia defines a tool as “a device that can be used to produce an item or achieve a task, but that is notconsumed in the process. Informally the word is also used to describe a procedure or process with aSocial Media and The Luxury Industry 22

specific purpose.” If you only consider it as a technology, social media is a tool. It has been created to allowconversations to happen around user-generated content. People use social media as a continuation of theirpersonality in a way, and adjust their online identity to be consumed by their peers. As a result, they informtheir peers about what they wear, what kind of music they listen to, where they travel to and basicallyanything that matters to them. They also talk about brands and politics. Again, the social web hastransformed the Internet from a dry and passive space to a space where everyone contributes. This is verynew because individual opinion is not bound to a note pad, an oral conversation, or a customer servicevoicemail, the social web has enabled users to discuss with other users – that they do not necessarily know– of their concerns about a product, their love for a brand, their passion for an activity, etc. Forums could dosomething similar but it was only limited to people who would take the actions to go on their particularnetwork. Now people commenting about that brand or that politician can easily share it on social networksites and ask their friends’ opinion. Furthermore, this information is not just implemented on a forum or ablog that you cannot really find unless you use the right keywords on Google, it can be shared through“social buttons” very easily across all platforms at once. All this gives a massive power of influence to users. 5. Social Media or the Era of the Consumer a. The social web has enabled social recommendations.The implications of social sharing are multiple and must be taken into consideration to understand theentire phenomenon. Social media are an effective contribution to society because they have a true purposeand have not only been conceived for gossipy conversation. They constitute a new platform for people toshare their thoughts on all subjects including serious ones like politics, problems effecting their everyday lifebut also their love and hate of brands. The social web, by enabling discussions, has allowed users to findothers easily who have been experiencing the same issues or have been passionate about the same brands.It is the start of social recommendations, enabled through social plugins, Facebook comments, etc. b. Social recommendations have empowered consumersBrands have started to listen to these conversations. They are taking more and more into considerationcustomers’ experiences and concerns for many reasons: crisis management, social CRM, productpromotion, brand awareness, etc. People are already talking about their brands. Thanks to the social webthey can easily become ambassadors or the complete opposite. For a long time, if you were having a poorexperience with a brand or product, it was very hard to spread the word about it and thus warn the brandthat actions must be taken to repair their mistakes, or they would suffer the consequences of it. In thepresent times, if someone who is influential starts talking in poor terms regarding a brand, its reputationcould be damaged. As people are getting more and more aware of what others are experiencing, they arebecoming less attentive to brands’ messages. The one thing you do when you want to buy a phone, acamera, and a computer is to try to find other customers’ experience with this product. The same wouldhappen if you were dissatisfied. Social recommendations have become key to users, shifting the power fromwhat brands could achieve with advertising to something based on true experiences. c. The phenomenon of co-creationBrands have also started to see how they could use the power of social media to implement the rightsolutions within their offering. They don’t have to guess or determine on their own what is good for theirSocial Media and The Luxury Industry 23

customers. No need to test ideas on a panel of users. Social savvy brands can now simply get theircustomers involved. It is a win-win situation. It’s cost effective for brands, and customers finally have thefeeling that brands listen to them. This is what we call co-creation. As stipulated in The Future ofCompetition: Co-Creating Unique Value with Customers , Prahalad and Venkat Ramaswamy explain how 15“today managers can no longer look at their businesses as the center of the universe, around whichcustomers orbit far outside decision-making processes.” Customers no longer want to be part of a yes/nosituation on what the company is offering: the era when companies created the offerings that they wantedcustomers to buy is now over. d. Customers are becoming specialistsCustomers are the primary users of whatever product is made by a company. As such, they know what kindof problems they are experiencing. Small suggestions that could make people’s lives better could easilyemerge from these kinds of initiatives. Social media are the perfect platform to implement this: people arepassionate and want to get involved. Sure, many companies mostly use it for PR purposes. Vitamin Waterfor instance created a new Vitamin Water taste after asking people’s opinion on Facebook. As one of thefirst attempts at co-creating, it received important coverage. But it is also the small details that will makethe difference in the customers’ mind. Active community management is essential to some brands. Beautybrands, for instance, can finally keep track of how well their products are working, what kind of problemspeople are having with their skin, etc. Clinique does a fantastic job of this: every time someone posts acomment on Facebook, they redirect it to the appropriate department. So if a group of women areexplaining that they are having trouble opening the product – a packaging issue – they will make sure thatthe appropriate department knows about it, to implement the necessary modifications. Customers arebasically becoming more and more the specialists in the products they use because brand want to educatetheir customers more and more. Users become savvier and want to get more involved. Again, thisempowers customers.Changes in our pace of life have enforced consumers to become more and more adept at digital. In asociety where we are constantly pushed to become more pro-active, digital has appeared as a practicalsolution, allowing people to have access to more services, to their favorite shops at any time. The notion ofchoice is key in the digital space and this is why brands need to be available everywhere. Technologicallysavvy, careful about their spending, with very little available time, consumers have embraced digital whichhas given them more power, more knowledge and it is essential for brands to make sure that online usersare exposed to their messages.15 The Future of Competition: Co-Creating Unique Value with Customers, Prahalad and Venkat RamaswamySocial Media and The Luxury Industry 24

C. Two Social concepts necessarily meant to be confronted 1. A reality that overtook the brands’ willsNow that we have defined more precisely the notion of luxury and described this new social phenomenonthat is social media, why must these two notions be confronted together? Why do luxury brands have tocare about social media?A first point to rise regarding the luxury industry is that it tends to construct an image much more throughthe media than before. Media are playing an important role of influence regarding buying or during thebuying process. The Internet, especially, is now at the heart of every luxury brand communication strategyand is further complicated because it involves new and different relationships with the brands. Source: Luxe et Brand Content, QualiQuanti et SAME SAME.We now speak of a “revolution” of social media because social media are not just a new marketing channel,it is completely redefining “virtually” the way we communicate, as well as the way we buy, the way we play, welearn, we share, we discover, we collaborate, even the way we choose brands. Social media are not onlyabout brand awareness; it also means PR, after sales, consumer service, loyalty building, networking andcustomer acquisition. Social media are everywhere and used by everyone. The 5 of July 2011, Google thlaunched its own social network, deepening at the same time the battle with the giant of social media,Facebook. The event has probably had some of the biggest media coverage online but also offline – on TV,newspapers, and radio… Social media have now become a real social phenomenon. It is no longer just asubject of discussion for geeks or professionals of the industry. The fact that a movie, The Social Network(2010), has been done about the early days of Facebook and its creator Mark Zuckerberg just shows howimportant this development is, and that it has became a cultural phenomenon as well.Brands just cannot avoid it anymore and they have to look at figures and how people, especially the younggeneration who are the potential future consumers are consuming, getting information and conversing withthe brands. There are thousands of figures that could be given to show how important this phenomenon isbut we just want to raise its social importance: 1 in 5 couples meet online today at the same time that 1 in5 divorces are blamed on Facebook; 80% of companies use social media for recruitment; 93% of socialSocial Media and The Luxury Industry 25

media users believe that a company should have a presence in social media; if Facebook was a country, itwould be the world’s 3 largest population; 35 hours of videos are uploaded on YouTube every minute. It is a rdfact that social media have now became more than just a new platform and can’t be avoided by brands.People, consumers are using those tools not only to share with their friends or to entertain but also todiscover brands or buy online. Figures are showing that not only the gen Y or some influencers are on socialmedia. It is now reaching a broader audience. The target of users aged from 50 to 65 is one of the fastestgrowing audiences on social media. Affluents – from $200k + - are using social networks like Facebook,Linkedin or Twitter much more that the general population.At the time of the development of the Internet and of the websites, luxury brands have always been thelater-adopters. But they have now understood how important this channel was for their communication andmarketing, and that they just cannot afford not to be there. It took a lot of time for those brands to properlyunderstand it and to develop digital strategies with allocation of budgets for it. The issue is now the samewith social media and luxury brands fearful of adopting it. Conversations are already happening, consumersare already talking about the brand, using social media as a source of information about products, as wellas third party information sources (blogs, Amazon, eBay, online magazines…) that collect discussion,product reviews and price comparison. Fake luxury brands’ Facebook fan page or Twitter accounts arecreated everyday: it is important for luxury brands to understand that they have to be there or someoneelse will take their place. This necessary social media presence for luxury brands does not mean that it would be an easymove to do. It is important to raise the issues that luxury brands are facing today. If we really think thatluxury brands have to use social media - and by social media we are not only thinking about having aFacebook page and Twitter account - as part of their communication and marketing strategy, this isimportant to understand that there is a challenging relationship between the luxury industry and the digital,especially social media. 2. A complex and challenging relationship: the luxury industry & digitalIf we have no doubt about the fact that luxury brands cannot ignore social media any more, not only as amarketing channel but more as a social phenomenon and a new way for the consumer to interact with thebrands, we have to explain and raise the issue of this complicated relationship.The reason why social media is a complex move for the luxury industry is due to the nature itself of luxuryand the definition we developed before. Social media is and will still be a complex change for a while for a lotof brands because there is a need to understand that it is not only a complex new platform to use but alsonew comportments of the consumer to take into account.Within this “revolution,” the luxury industry is facing a more challenging problem: how to keep being exclusiveand premium in open and accessible platforms. If it is easy to select the audience you want to target whenyou are doing an event offline, how does one talk to a niche of consumers on and through social media?Social Media and The Luxury Industry 26

There are several rules that luxury brands should follow, also known as “anti-marketing” rules because itcould only be applied to the luxury industry. The main ones are: 1/ Do not talk to a mass-audience but focus on a very specific population. 2/ Put some distance between the brand and the consumers. There should not be equalitybetween the two; luxury brands have to have a certain aura on its customers. 3/ There should be barriers to entry on the luxury market. Those barriers should not be only basedon price but be mainly sociological. Those barriers have to help build a world of privileged and expert people. 4/ Do not talk the same way to all your customers. It is important to differentiate them, especiallythe highly privileged ones who are ready to pay enormous amounts of money and wait a long period toacquire their object of desire.Because luxury brands are not following the traditional rules of marketing, using social media is a morechallenging and complex problem. The two main issues with social media for a luxury brand seem to belosing exclusivity and losing control. In a recent article, Peter Kim was still questioning the fact that luxury 16brands should use social media, and raising the question of what is exactly a luxury brand. As we have seenbefore, luxury is a complex notion and it became more and more complicated with the segmentation ofluxury, but that still does not mean that some luxury brands have to be on social media and some shouldnot. We think that the biggest point is how to be on social media and what type of strategy to adoptdepending on which brand you are and who your customers are. Social media are a new way to provideexperiences to the customers and to talk to them. As for luxury brands’ shops or their presscommunication for example, what has to be questioned is not the fact of having a shop or of advertising inthe press but how to do it. The experience will never be the same when a customer is entering a Chanelboutique or visiting a Calvin Klein shop, because the brands are not the same, and because everything ismade in the Chanel boutique to provide a proper luxury experience which is not the case in the Calvin Kleinshop. It is the same for a press ad: if the two brands are advertising in the press, they are not going to do itin the same way and in the same magazines. The segmentation of luxury does not mean that the higherluxury brands do not have to use social media but definitely means that they have to use it in a completelydifferent way, in their own way. The most important thing is for each brand to appropriate this new mediaand tools and to make it suitable for the brand.The critics against social media, saying that brands are losing exclusivity, are based on the fact that socialmedia are quite accessible platforms. In this case, what does accessibility really mean? Everyone canaccess the Facebook fan page of Louis Vuitton, but does this mean that they are all going to experience it inthe same way? Does this mean that they are going to understand the same things, feel a part of the samegroup of people as the real customers? It is not because you are walking in front of a Chloé Boutique thatyou are going to enter the house, or even if you do, that you are going to feel treated as a special guest.Exclusivity and accessibility have a complex relationship and a complex definition. It is important to explainthat, first, the accessibility of social media as a platform is not linked to the accessibility of the brand. Anyluxury brand requires certain capital – social, cultural and financial- for customers to be able to buy it.Having access to their Facebook fan page does not give you this capital and this accessibility. The secondpoint raised by Marci Ikeler is that “all luxury communications fall somewhere in the spectrum between 17accessibility and exclusivity. Luxury brands must, by definition, be exclusive. However, their value must berecognized and desired even by those who cannot attain it.” This is an important statement about luxury. A16 Peter Kim is the Chief Strategic Officer of Dachis Group, specialized in social business. His article is named “do luxurybrands need social media?” http://www.beingpeterkim.com/2011/06/do-luxury-brands-need-social-media.html17 Marci Ikeler has spent the last 10 years working with advertising agencies and is now Director of Digital Strategy atGrey, NY.Social Media and The Luxury Industry 27

luxury brand does not have to and must not talk to everyone but it is important to be heard by a broaderaudience to generate desire.Another important criticism and argument for luxury brands not to use social media is the control. In theluxury industry, brands need to have control more than in any other industry. It is due to the essence itself ofluxury. As we have said before, luxury brands are following “anti-marketing” rules. They need to have theirown rules. Luxury brands cannot afford to make mistakes or failures. This is the reason why they alwayshave been careful to control every step of the production. For their communication, luxury brands are alsocontrolling every step, using agencies only for their creative executive role and having the strategy definedby the Creative Director who plays a strong role in the brand image. Karl Lagerfeld for Chanel, ChristopherBailey for Burberry or John Galliano for Dior (before he got fired), to name a few, are symbolism of thedifferent Maisons and they are building their own view of the brand. On the other hand, social media areoften synonymous with “no ability to control” because words can spread. The characteristics of social mediabeing real-time connected between the different platforms and the playground of people and not brandsexplain this lack of control. However, what are not controllable are the comments of people, the critics, thereviews and comparisons, not the content itself. When a customer is not happy about a product or theservice he paid for in a shop, he will spread the word about his disappointment in the same way thatconsumers are now doing online on social media, but it is now going faster and that is what is frightening forluxury brands. There are still ways to control the brand image and to keep it very strong. Social media arejust driving luxury brands to make a lot more effort to keep this control. Social media can be then seen as away to maintain the highest quality of product and services, the highest quality of experience – off and online– and the highest quality of relationship with consumers.Figures and facts are showing the importance of social media not only as a marketing channel but also as asocial and cultural phenomenon. Conversations and reviews are happening there anyway, overtaking thebrand’s will. Luxury brands cannot ignore any more social media and avoid it, using the excuse of beingexclusive and not willing to use mass and accessible platforms. This relation is complex and has to beproperly integrated as part of a brand strategy. Social media are not just a new channel of communication;they are a new way to communicate. It is an important challenge for the luxury industry to continueadvancement, to keep defining its own rules and values. Luxury – as being more than just products but aculture – should not be a follower but a trendsetter. We are now going to develop how, despite thischallenging relationship, luxury brands can turn digital, and especially social media, into a powerful tool todevelop brand awareness, build a relationship and listen to their customers, provide relevant content andinformation and create desire.Social Media and The Luxury Industry 28

III. As social media marketing is becoming inevitable, Luxury Brands are starting to embrace it A. The social media phenomenon must be put into perspective 1. Luxury brands should not be refining themselves to match social media Social networks have always existed. They were just for a long time bound to our real life circles: work, friends, family, etc. It is the technological performance combined with the desire to become more active users that have enabled us to enter this era of the social web. Customers are gaining more and more power and there is a risk for luxury brands at paying too much attention to their customers expectations and lose what characterizes them: being aspirational and leaders in their domain of expertise. In an article entitled Burberry: A Crowd Pleaser , Suzy Menkes - fashion editor of the International Herald 18 Tribune – explains that Burberry in its attempt to integrate digital and social media fully might have gone a step too far. Under Christopher Bailey’s commandment, the 155-year-old British brand has evolved a great deal. Its Chief Creative Officer has re-launched the brand by reinventing its key pieces. He has successfully incorporated digital within the brand’s strategy, positioning it as one of the leaders in the industry. But during its last London Fashion Week, not only was the AW 2011 collection catwalk live-streamed online, it was also live-streamed on Piccadilly Circus. Menkes’ words are the following: “for what it gained in bombast, the once-quirky line lost in charm, cheek and irony that the designer Christopher Bailey has previously brought to the Burberry Prorsum brand.” Her explanation for this is very interesting to this paper: “But perhaps when you bring fashion to the people, you have to please the whole crowd and go through the gamut of brand recognition tabs.” As we explained before, it is essential to make sure that on social platforms, brands continue to propose something exclusive, a special experience, and avoid falling into “the gamut of brand recognition tabs.” History defines luxury, not marketing. Luxury brands are tastemakers and should not be subject to people’s expectations. Whether or not Menkes is right, she does have a pertinent point of view. Has Burberry in its attempt to expand the luxury experience online gone too far? Is this actually being detrimental to its core mission: remaining an aspirational brand? Social media are a new way of communication but the brand should not be reinventing itself to match people’s expectations - “Moms in London”: “with Dusty Springfield droning on the soundtrack, it looked like the usually pert models had gained a few years, and pounds.” The brand should also not be reinventing itself to meet the requirements of digital: “it was easy to see this show as a made-for-small-screen presentation.” The danger of wanting to satisfy its “fans” (on Facebook for instance) could lead the brand to becoming “a crowd pleaser, if not a crowd sourcer”. The reason? “Probably half the Moms in London, let alone half the cyber world, would vote “Like” for a nice, roomy winter coat.” Luxury brands should be inflexible with regard to executing their true mission: creating what is best in their industry, made with the finest materials in order to offer a truly exclusive experience, something special. If their power of attraction is so high it is because they are trendsetters; they innovate in terms of technology and in terms of employed materials: they are leaders. It is a world of creativity and performance. Social media is mostly based on conversations and on user-generated content. It provides many opportunities for brands to gain strong insights from their fans to later meet their expectations. Here is a risk for luxury 18 Burberry: A Crowd Pleaser by Suzy Menkes, Fashion Editor of the International Herald Tribune http://nyti.ms/oq4UWA Social Media and The Luxury Industry 29

brands to become crowd pleasers, with the risk likely (?) to weaken their brand. It is important that theyremain the trendsetters but provide the appropriate content for users to converse around their brands. 2. Social media simply is where your future consumers are.We have already stressed the fact that social media is a social phenomenon not only because technologicaltools have made it possible but most importantly because people were willing to embrace this new form ofcommunication. Younger generations have been growing up with computers, mobile, smartphones, apps,etc. They are true addicts to technology and social platforms are where they are communicating. It is noless than an extension of conversations they are having offline. And these younger generations are thefuture consumers of luxury products. Thus, there is a strong need for brands to start building relationshipswith them, on the platforms they are familiar with.In an article entitled Marketing to the Millennials , Suzy Menkes explains that one of the most evident 19changes (in Marketing to the Millennials) is “social networking, which is embraced by 75 percent of theMillennials, compared with 50 percent of the Generation X members (ages 30 to 45) and just 30 percentof Baby Boomers (aged 46 to 64).” The term Generation Y (or Millennials) “appeared first in an August1993 Ad Age editorial to describe teenagers of the day, which they defined, at that time, as separate fromGeneration X, and then aged 12 or younger (born after 1981), as well as the teenagers of the upcomingten years.”20 Here is a definition offered by the Oxford Dictionary of Marketing:Although there is no specific year boundary, this is generally portrayed as the generation that followsGeneration X and who were born in the 1980s and 1990s. The dominant trait is their reliance ontechnology, particularly the Internet, social media, and computer games and their need for constantinteraction across these media. Oxford Dictionary of MarketingWhat matters most for us in this definition is two things. First that the term generation Y is not a scientificterm, it is more of a marketing term based on sociological observations. Second that it underlines theimportance of social media and Gen Y’s “need for constant interaction across these media.” And as ScottGalloway explains it “just as Boomers drove the luxury sector for the last 20 years, brands that resonatewith generation Y, whose purchasing power will surpass that of Boomers by 2017, will be the new icons ofprestige.” Gen Y will become at some point the main buying generation of luxury products and there is a 21need for luxury brands to make sure they understand and communicate with them.“We think a lot about the mind-set of the consumers — what are the youngsters doing, does it differ countryby country, region by region — we need a deep understanding because that is crucial for the future” Robert Polet, former president and chief executive of Gucci Group. 2219 Marketing to the Millennials - Suzy Menkes - March 2, 201020 Generation Y, Wikipedia21 WILL GENERATION Y SUSTAIN LUXURY FASHION? (http://www.signature9.com/fashion/will-generation-y-sustain-luxury-fashion)Social Media and The Luxury Industry 30

This is another extract from Suzy Menkes’ Marketing to the Millennials and it demonstrates that brands arewell aware of the importance of understanding the younger generations. Mr. Poler adds, “These uniquefactors make them very savvy consumers, who pay great attention to the value of what they buy and requirea different way to interact with brands.” The last part of this sentence is what is key here: brands need tointeract in a different way with Gen Y because their behaviors are different from previous generations.Brands can no longer use the traditional media channels to reach millennials, they need to innovate and tostart acting as leaders, on the media channels they use. And as said before, it is not only a question ofchannel but also a question of behaviors. Brands need to adapt their communication strategies andintegrate social media as a part of their overall marketing and PR.Another key point is that Gen Y is very much about the experience. They care about understanding theidentity of a brand and they want to be associated with these brands because they believe in the values theypromote. They want to interact with these brands but on all the platforms that they use on a regular basis.As Milton Pedraza, CEO of the Luxury Institute in New York explains “Wealthy millennials view luxury muchmore for the experiential factors associated with it, rather than relying on brand heritage or residualprestige earned long ago.” Whether or not this is true for all younger generations or more for an Americanaudience, the point is that millennials have understood that luxury in the present times is about theexperience. He reinforces our point to say that millennials want to interact with their favorite brands onsocial media by saying: “The good news for luxury firms is that these tech savvy shoppers want to interactwith them, not only in stores but also online and on mobile devices. This builds richer experiences anddeeper relationships.” 23Luxury brands have been reluctant to start embracing digital platforms but it is no more a case of whetheror not this is the right choice; younger generations are technologically savvy and communicate on theseplatforms Wealthy millennials represent future luxury customers so in order to maintain their image oftrendsetters; luxury brands need to embrace social media to perpetuate the experience to youngergenerations. What luxury brands are investing today to build their online presence will be key toidentification by younger generations as leaders. Not only for their past, but for the way they havesucceeded in communicating this incredible story of theirs, in order to build the most special experienceboth online and offline. Millennials are spending too much time online to let others become the inspirationalbrands. Brands have now fully understood that it is important that today’s younger generations dream ofowning their brands in a near future. This happens because they are taking the time and putting budgetsbehind social media to provide incomparable experiences to future consumers.23 Millennials: The Next Luxury ConsumerSocial Media and The Luxury Industry 31

3. Luxury customers are online and want to interact with brandsIn the previous paragraph, we had been discussing how important it was for luxury marketers to startengaging with younger audiences so that they identify luxury brands as the most aspirational. But withouteven looking into the future, today’s luxury customers are already online and using social platforms. As wecan see in the diagram below, affluents are very involved on social platforms, especially the $500K+. With5% of the $500K+ category on ASW – an invitation only social network for the wealthy, we can see thataffluents have the desire to connect and keep in touch with other affluents that proves that they are onlineand that they care about their online presence.Within the digital space, they aspire to interact with their favorite brands. Indeed, US affluents, for themajority, follow a brand on social networks because they “love the brand and want to follow it.” It is not for apractical benefit. Again, it is about the sentimental value that lags behind this luxury brand. They also “wantto keep up with news about them.” So clearly luxury consumers are looking for a digital experience andbrands that fail to provide it could appear as stuck in the past or even worse, be forgotten. People spendhours on the Internet everyday and it is now the best way to expose your brand, and thanks to social media,engage with your consumers.Social Media and The Luxury Industry 32

Some innovative companies have understood very well what affluents were expecting from the web and howimportant content was to them. Net-A-Porter, the leading online luxury retailer, launched 12 years ago byiconic Nathalie Massanet, is an incredible example of how, why and where luxury consumers want tointeract in the digital space. The original idea was to found a website which would be both a magazine andan e-commerce website. Considering the technological innovations that happened on the web, there was noreason why people should not be able to shop within a magazine that understands their desires; that isaspirational; and at the same time, offers their favorite brands. And NAP has proved to be an incrediblesuccess story: Massanet sold her shares to Swiss luxury group Richemont in 2010 for £50m whileremaining the executive chairman. This is how she has succeeded to connect with online luxury consumers:by providing insightful content thanks to her incomparable tastes. But she also went much further intoproviding to luxury consumers what they are looking for. In 2007, hours after the show, Roland Mouret’s“small 21 piece collection for Spring Cruise 2008 was available for pre-ordering on NAP”24. This is anotherexample of how companies can innovate toward providing their customers with the most exclusiveproducts, even if it is online. The immediacy of the web made this operation possible and allowed people toshop the collection, way before actually being sold.Luxury consumers are online and use social media. The complex reality for brands is to bring them an onlineexperience that can match their offline standards, in terms of content, in terms of the buying experience, interms of CRM, after sales.24 Roland Mouret: Back, hopefully in the black, The Business of Fashion, 4 July 2007http://www.businessoffashion.com/2007/07/roland-mouret-back-hopefully-in-the-black.htmlSocial Media and The Luxury Industry 33

B. Brand Content Strategy, Luxury and Social Media: the good formula? 1. What is Brand Content?“What we call Brand Content refers to the content that is created or largely influenced by brands. Brandsthat have a symbolic, historical or artistic nature have the internal resources to create original content likeshort movies, documentaries or books. From the moment on, the brand can think of itself as a contentpublisher, with an editorial strategy and a supply of creative content independent from its advertisingcampaigns.” Daniel Bô25Brand content is a new way to communicate for brands that emerged a few years ago – it can be arguedthat brand content has always existed in certain industries but we are specifically talking about brandcontent as a phenomenon in communication strategies.As Daniel Bô has made the distinction in its white paper about brand content, it is important to highlight thedifference between what is called “brand content” and “branded content.” “Branded content” is often linkedto sponsorship or partnership: the content already exists and has special affinities with the brand but thebrand does not play a role of producer or publisher. As opposed, “brand content” is not only part of acommunication strategy, but “should be apprehended within a global, unique content strategy, specific tothe brand’s issues, industry, objectives and universe.” Brand content strategies are not just following thelogic of advertising campaigns but are more integrated in the overall strategy and DNA of the brand. Themain goal of a brand content strategy, as opposed to an advertising campaign, is not to lead to a purchasebut to talk to the customer, get closer to him or her and deliver an experience. Depending on the industryand on the brand, branded or brand content strategy are preferred, but both strategies are facing a similarevolution: the audience has become more and more used to those strategies and less receptive to it, whichforces brands to be more innovative, deliver a higher quality content and to have a very ownable andbespoke content. Brands cannot afford anymore to reproduce campaigns and strategies done by otherbrands because their customers are more expert, more knowledgeable and at the same time, are payingless attention to what is being said.Brand content strategy is complex and the aim “is not to get the message out but to convey an ensemble ofvalues and develop a complex universe.” Thus, brand content strategy relies on three pillars as theircommon principles : 26First, the content must have an intrinsic value. The content should bring a value to the customer instead ofjust trying to sell a product, whether the value is to entertain, to educate or to bring a certain utility. Basedon this idea, the theory of the Gift of Marcel Mauss is often used to explain how it could still lead to the act ofpurchasing, because, often offered for free, the customer sees the content as a gift. Marcel Maussdeveloped in his theory that “the donation obliged the receiver to reciprocate.”The second principle is that brand content campaigns tend to be “integrated,” longer and more complex.Strategies of brand content have more freedom in terms of subjects, space, time and platforms thantraditional communication, often restricted to only one message, product and evidence. The content could25 Daniel Bô is founder and MD at QualiQuanti and TestConso.fr26 Developed by Matthieu Guevel in the White Paper on Brand content and luxury brands.Social Media and The Luxury Industry 34

be longer, diffused across different platforms and in episodes/series or journeys. Communicationstrategies have to focus on a strong message to sell; content strategies have to tell stories. “We are notjewellery designers, but story designers” said Stanislas de Quercize, CEO of Van Cleef & Arpels.The third principal is closely linked to the first one: consumers have to be seen foremost as people. “Contentmarketing is not consumer-centric like traditional marketing but cultural-centric.” Brands are able toengage with people and bring value because they are focusing on what people are interested in, what bringsthem emotion and pleasure. Brands have to keep in mind that they have to generate desire and makepeople willing to connect with the brand.Now that we have explained what brand content is and developed its key principles, we are going to gothrough the different types of content. Brands have, first, to define the objectives and thus the type ofcontent they want to deliver before choosing the format that it will take. If there are thousands of ways to docontent strategy, there are only three types of content: - Entertaining content: this type of content seems to be the most popular across marketers and consumers, but is not the only one to please the audience. Because people are often more receptive to a message using humour or entertainment, advertising and entertainment industries have tended to converge and use each other. - Useful content: brands could bring experience and value to their customers through utility. Brand utility should go beyond a simple guide to products and instead deliver an added value experience. Brands should then showcase their knowledge, which could be about a specific product, but also cultural or technical. From technical tools to lifestyle knowledge, there is large scale of platforms and applications to use for this type of content. - Educational content: this type of content evolves specifically around the brand itself: its history, its culture, where it comes from, etc. Brands are legitimate in talking about what they know best: themselves. “Brands can investigate larger topics around their universe and even intervene in public debates or influence social trends”, according to Matthieu Guevel. In some industries, brands have developed a strong universe around their products, allowing them to talk about it and inform the customers all at once. This educational content will become more and more important in an industry such as luxury because their fast-growing customers from Asian countries are eager to learn. One of the often-used tools to create an inspirational and emotional experience around an educational content is storytelling.Social Media and The Luxury Industry 35

2. The evolution of Social Media toward Professional Content and Social EntertainmentNow that we have defined the notion of brand content and its diverse range of application, it is important toraise its importance in the digital space. Social media is quite a recent evolution of the Internet but it hasbeen evolving very quickly. This is why social media has already reached mass maturity. When looking at thefigures of the Global Web Index 2010, this mass maturity is obvious: even in the last engaged markets,more than 50% of consumers have already participated in any kind of social contribution in the last month.The massive period of growth is over. Source: Global Web Index, Annual Report 2011Social media is no longer at the era of “text-based” content creation but has made the shift to real-time,sharing and distributing more professional content. It is now all about real-time opinions, sharing links,commenting on events, interacting and reacting to on-going conversations and being a curator more than acontent creator. This is a massive change involving not only Twitter users but anyone updating their statuson platforms like Facebook or RenRen. Thus, 10% of web users are updating their status or profile on adaily basis and 24% are doing it once a week. This new real-time shift also enables the ability to connect theoffline and online platforms and events. Younger people are leading the way on this trend but everyone isfollowing. This shift to real-time, sharing links or even simply using social media and digital platforms is also asynonym for the shift to more professional content. It is “now a core part of the consumer onlineexperience” according to Tom Smith, founder of the Global Web Index. Social media users are just hugeconsumers of any kind of media and those real-time users are starting to share more and moreprofessional content such as streamed TV shows for example. Micro-blogging is a good expression of thistrend. “Links to news stories” on micro-blogs is an activity that has seen the biggest increase: by 17%between wave 2 (January 2010) and wave 3 (September 2010). In parallel, the readers and micro-Social Media and The Luxury Industry 36

bloggers are becoming a strong source of recommendations: in less than a year, social network contactshave seen their trust as a source of recommendation increased by 47,5%.“The content we consume will be dictated by other consumer recommendations, live Twitter-stylemessaging will bring programming to life and social networks will allow us to share and consume content asshare experience. This is a true revolution in media delivery and one that makes real time-social one ofbiggest opportunities ever.” Tom Smith, Founder of the Global Web IndexThis change toward more professional content – watched live or via streaming services rather than paid orillegally download – is also linked to a change toward a more “entertaining” content: music, TV, films or anyother source of entertainment. Source: Global Web Index, Annual Report 2011People are now sharing and participating in an on-going conversation, real-time and preferringentertainment professional rich content rather than consumer generated content. That makes a hugeopportunity for brands to play the role of producer in this new social environment. “The challenge now is notselling the need to be involved in social, but how companies and brands engage the current onlineenvironment to proactively build their brand.” It is the opportunity for brands to create communities aroundlive events, to control their content while spreading the word. “Content will be king.” Tom Smith Source: Global Web Index, Annual Report 2011Social Media and The Luxury Industry 37

3. Why does Luxury like content? “An iconic brand is a publisher without knowing it.” Pascal Somarriba, Brand and Media Strategy SpecialistAn important characteristic of luxury brands is probably their specific relationship with the creative processand culture. From craftsman to creator, whatever the type of luxury goods, it has always been an industrywhere the creative process is fully a part of the brand’s DNA. Creativity is part of their identity, part of theirhistory. Because of this relationship with creativity, culture and luxury brands have always been really closed.This is not surprising when you think of the role that the luxury industry plays in society. Luxury is a synonymfor refinement, good taste and should always remain as a trendsetter in society. Coco Chanel wassummarizing this idea by saying: “I love luxury. And luxury lies not in richness and ornateness but in absenceof vulgarity.” This absence of vulgarity, this importance of “good taste” and creativity have always legitimizedthe partnership, - or close link, - with cultural aspects of society; especially the arts, cinema, literature,Luxury brands are participating in building a “common culture based on what they are selling.” They havealways been fully a part of history and have always played an important role in the culture of a country. It issomething really obvious when you look at France: luxury brands have been actors and contributors to theFrench culture, all the more with globalisation because it becomes a way to “export the French touch.” Theimportance of luxury brands goes far behind selling high quality and innovative products. “When consumersbuy a luxury product, they are buying more than just a product; they are also sharing the same spirit andvalues as the brand, hence taking part in a cultural experience.” Consumers are buying a way of life: a “wayof travelling” when it comes to Louis Vuitton; a specific relationship between human beings and time forwatches; a certain image of femininity with Chanel, because luxury brands have always had the ambition tobe more than just manufacturers, they have soon developed editorial strategies, specific content aroundtheir identities, their histories, their know-how, their creative processes... Luxury brands have alwayscollaborated with upcoming artists, organising special events or exhibitions, in every type of cultural domain:from the Cartier Foundation, to the “superflat monogram” designed by Takashi Mukarami for Louis Vuittonor the Andy Warhol Dom Perignon special edition bottles. Because of this specific relationship with cultureand creativity, luxury brands have the legitimacy to create their own content and thus to develop properstrategies around it. But the fact that they can and have the legitimacy to do so, does not necessarily meanthat they have to. Why is content strategy so important for the luxury industry?Luxury brands, as we have seen before, tend to follow anti-marketing rules. It is in those anti-marketing rulesthat they have found the importance and value of a content strategy. There are three main principlesexplaining why content strategy is so important for luxury brands: first, the need to have a supply strategyinstead of a demand strategy; second, the importance of maintaining the right balance between exclusivityand communicating outside of your target audience; and finally, the fact that advertising campaigns cannotbe used to sell. Contrary to traditional marketing, luxury brands follow a supply strategy: instead ofresponding to their customers’ needs based on customer research and benchmark surveys, luxury brandsset the trend; they are “self-generated” to quote Jean-Noël Kapferer. They do not have to follow a demandstrategy because their role is not to fulfil basic needs, but the higher level of the Maslow’s Pyramid.Social Media and The Luxury Industry 38

Source: The Maslow’s PyramidLuxury brands have to educate and to “keep the dream alive;” they have to fulfil the customers’ needs thatevolve around self-esteem and self-actualisation. This is why Yves Saint Laurent used to say: “I’m not acouturier. I’m a craftsman, creating happiness.” Because luxury brands have to educate the consumer, theyhave to fulfil, not their basic needs, but the customers’ dreams. To create a magical aura around theirproducts, they have to use content, whether it is books, short films or videos, specific online or offlineexperiences; but it must always be content owned by the brand itself. The second anti-marketing rulefollowed by luxury brands is “communicating outside of their target audience.” The challenge is to find theright balance between exclusivity and openness. In general, a brand should never target only its audience.For luxury brands, it is also important to talk to people who cannot afford the products. “An object becomesan objet of desire only because it is desirable to others,” this is why luxury brands cannot only target their 27audience and potential customers. Jean Noël Kapferer explains that an unknown production of high qualityproducts could be named the craft industry but not the luxury industry, and that is what all the complexity ofluxury relies on. But at the same time, the challenge for luxury brands is to remain exclusive; contentstrategy is a good way to target a broader audience and create desire around the brand while keeping theevent and products very exclusive to only some happy few. Source: Branded content and luxury communications, QualiQuanti27 Marie-Claude Sicard, Les ressorts cachés du désir, Village Mondial 2005Social Media and The Luxury Industry 39

It has to be said that “content is one of the most valuable assets a brand can use to spread luxury cultureacross new territories.” The last “anti-marketing” rule, that is key to demonstrating the importance ofcontent strategy for luxury brands, is the role of advertising campaigns. We developed this rule a few timesalready, but it is an essential argument to explain why luxury brands like content: advertising campaigns arenot developed to sell products directly, but to make people dream about the product, about a lifestyle, tocommunicate about a whole universe existing around a brand and its products… To generate the desire tobuy, traditional advertising has to focus on the benefits of a single product and to deliver a message as clearas possible that will easily be identified by the consumer. Because luxury brands do not have to follow thoserules, they have to communicate about the multiple facets of the brand and of the products, to create acertain attachment to the brand. The complexity of the message and the fact that the brand’s universemust be expressed in luxury brands’ communication is easier to translate into rich content than a single ad.Content strategies offer “unlimited possibilities to express the brand’s culture” and it is important that thistype of communication remains culture centric. “Giving access to the brand’s richness and complexity isexactly what makes the brand desirable and aspirational” and that is why luxury brands like content and whyit is fundamental for them to focus on communication using content strategy. 4. How can Brand Content Strategy help Luxury Brands engage on Social Media?The evolution of social media and the trend emerging from it represent a major opportunity for brands todevelop themselves as content producers and find their place in the digital space. The audience is there,and expecting quality content to share. And thanks to “packaged platforms” – the fact that users do notaccess the web simply via their desktops as they used to, but also via apps, mobile, etc – it offers highquality placement for brands. The real-time trend in social media also represents a huge opportunity toreconnect offline and online. The opportunity is even bigger for luxury brands and they have to understandthat it offers them a chance to play a proper role in the digital age: first, to talk to their customers on theplatforms they are on; to remain being perceived as trendsetters, and to be able to deal with this complexrelationship specific to the luxury industry between past, present and future. Luxury brands, contrary toother industries, have the content, the story to tell, the history, the know-how, and an audience that wants tobe entertained and educated. Content strategy is also a way to deal with all the challenges social mediabrings to the luxury industry – exclusivity, control, high quality experience...First, content strategies enable brands to be on social media without losing control over their content,which represents a major threat for luxury brands and one of the main reasons brands are reluctant to beon social media. They have to keep delivering high quality communication, whatever platform they use;whether it is a website, Facebook, a print ad, “Just remember that everything you do is an incarnation ofyour company.” Thus, it is important for luxury brands to keep having a high level of control regarding every 28type of communication they are doing. Brands have to play the role of content producer, producing highquality content that educates new customers to their history and know-how, that entertains customers withhigh quality story telling or art partnerships. It is fundamental that brands establish an online controlpresence and that is where content strategy is important. If luxury brands are in control of the deliveredcontent, online and through social media, then they can let people do what they like most about socialmedia: share and comment on this content, and take advantage of it. The challenge relies on understandingthe right level of control they need to have on social media and adapt themselves to the different platforms.28 From a post of the Zeitgeist and stuff, http://zeitgeistandstuff.wordpress.com/Social Media and The Luxury Industry 40

“What’s scary for the brands is that control is automatically relinquished to the individual and the identity ofthe brand is not always upheld.” But the identity of the brand relies on the content itself: create the content 29and let it go! Again, it is not because luxury brands have the legitimacy to create content that they alwaysknow how to: they need to be sure that the content reflects their identity, their values; luxury relies on everysingle detail. An important point to make is that the content must to be relevant to the audience: think aboutonline and social media content as you may think about offline events – people are not going to attend anevent and spend time with your brand if you do not give them the reason to do so. Content strategy is thenfundamental for every luxury brand that wants to take advantage of the digital space and get involved insocial media. Brands must control the content they are creating for social media in order to deliver highquality stories for users, and let them share it.Content strategy could also be a solution for luxury brands to deal with the challenge of exclusivity andaccessibility. As seen before, another threat for luxury brands in using social media is maintaining theexclusivity; which is fundamental for luxury. “Despite the vast benefits of sharing the spirit of luxury brands,does there come a point where engaging on social networks propels brands into a space of over-share oreven worse, overexposure?” What Jey Van-Sharp, Creative Director at consulting group MyUberLife is 30raising, is that “it’s not about too much information; rather it’s about sending out the wrong information”.Content is king, and it is a good thing if people are willing to share it. Luxury brands can create exclusivitythrough the content itself. Again, as we have raised it in an earlier paragraph, accessibility and exclusivitywhen it comes to social media are relative notions: social media is accessible in theory to everyone whereasluxury needs exclusivity. But luxury brands can keep being exclusive on social media via two different ways.First, it is not because the content can be accessible to everyone that it necessarily should. It is important tomake your fans – if you are on Facebook, for example - feel special. Treat your online audience as you woulddo it offline, at a shop or an event. It is important that luxury brands understand and listen to their audience,understand where they are, which tools and platforms they use and how. Luxury brands must not becomecrowd-pleasure , but they have to be where their core audience is, and get them interested about the 31brand. Depending on the communication or content, brands have to choose to share it with only a few, bymaking the content available in exchange for a certain level of engagement from the audience. The secondpoint relies on whether or not the content itself brings the notion of exclusivity. Brands can and have to stayexclusive by delivering exclusive content around the lifestyle of the people they want to target. “Tapping intothe passion that luxury brand followers and advocates possess should be at the core of any social mediastrategy.” Brands should create content that could only be fully understood by their core audience and makethe brand desirable for the other consumers at the same time. Zachary Cohen , taking the example of 32Nowness, was explaining this concept well: “knowing that in the digital galaxy anyone can coast on over toyour site, retweet one of your stories and blog about you, the way around this is by creating content andmanaging an experience that really only applies to your core customers. This is what Nowness does.” And ifthis is true for a website like Nowness, this is also true for any sort of social media platforms.”But most importantly, luxury brands should use social media because it enhances the customer’sexperience and is an insightful new way of creating desirability. Luxury brands have a lot of unexploitedcontent, a lot of opportunities to create new content: they now have the platforms to do it in different ways,enabling more interaction with the users. “Content operations help build a rich and consistent universe thatwill fascinate and engage the audience.” Digital offers to brands opportunities to communicate to 33customers in a different way. Social media goes a step further and talks to users and people first, before29 Elizabeth Schofield in Managing the exclusive distribution of content as a luxury brand post on Fashion Collective.30 Lala Lopez, Is your brand over-exposed? For Fashion Collective.31 Term used by Suzy Menkes to talk about Burberry in a NYTimes article published February 21, 201132 Zachary Cohen is Founder and Chief Creative of ZAC33 Aurélie Pichard, International Research Director at QualitQuantiSocial Media and The Luxury Industry 41

only talking to customers. Social media is not only about platforms, it is mainly about being social, andreproducing a sort of social interaction in the online space – it is about connecting the offline and online.Luxury brands exist because they are desirable, and this is fundamental in luxury. But “desire is highlyrelational and sociable.” 34 This means that an object could be an object of desire because it is desirable toothers. This theory of mimetic desire, developed by Rene Girard, a French philosopher, could explain theimportance of social interaction to grow the desire for a brand. This phenomenon has always existed in the“real” world: networks, influence, social mimicry are all natural human behaviour. Social media is justbringing those behaviours online, enabling those same behaviours to happen. A good example to supportthis idea could be the Art of the Trench of Burberry. The strategy behind the Art of the Trench is quitesimple: create desire for the product based on how people are influencing each other in real life, and justdigitalize it. It is a nice platform where you can see different ways of wearing the trench by different peoplewith different style, and you can “Like” it (Facebook functionality), comment and share it. The same mimeticdesire is already happening in the street, when you see someone wearing a Burberry trench, or inmagazines – it is just a replication and the expansion online. From a consumer’s point of view – it would bemore accurate to actually talk about the user’s point of view. Social media should enhance the experience,make it richer and enable them to interact with this content. From a brand’s point of view, it is a chance tocreate a closer relationship with the audience, to deliver them new content and create desire. The desirefor a luxury brand is not “single”: what is desirable for the consumer is the whole environment; from theproduct itself, to the lifestyle and attitudes associated with the product, and finally to the history, value, andsocial background associated with the brand. Content strategy is a huge opportunity for brands to exploit allthose elements, through a rich experience, and to an audience who is willing to receive this type of valuablecontent and to share and interact around it.“Luxury brands should seize every available opportunity to talk aboutthemselves, distinguish themselves from other brands and receive theirfascinating history.” Daniel Bô34 According to the conception of desire of Marie-Claude Sicard, Les Ressorts cachés du désir, 2005Social Media and The Luxury Industry 42

C. The Digital Environment and the Luxury Experience 1. Crowdsourcing: an option for luxury brands?Wikipedia defines crowdsourcing as the act of outsourcing tasks, traditionally performed by an employee orcontractor, to a large group of people or community – a crowd, through an open call. One could say thatWikipedia is the product of crowdsourcing. The Oxford Dictionary of Marketing refers to crowdsourcing as afusion of ‘crowds’ and ‘outsourcing’ coined by Mark Robinson and Jeff Howe in an article in Wired magazinein June 2006. Essentially this involves taking a function performed by employees and outsourcing it to alarge network of people in the form of an open call. We have started talking previously about crowdsourcingand how many brands have started using it, both for PR reasons and to actually get insights and ideas fromusers. Some institutions like the city of New York have been making good use of this tool; for instance byasking citizens to give ideas about how to make New York a greener place (see Change by Us NYC). It is allabout using the power of your community to solve problems, to give their input, etc.In a recent debate around crowdsourcing and Fashion with Nathalie Massanet, Margareta van den Bosch 35– the Creative Adviser of H&M, and Scott Galloway – Professor of Marketing at NYU Stern and founder ofL2 Think Tank, Galloway explained that he believed in crowd-sourced marketing but that the path for crowd-sourced merchandising was still far along the line. Indeed, many luxury brands have built their success ontheir creator pursuing his or her vision instead of simply following the customer’s needs. By exploring otheroptions and innovating in terms of technology or materials, luxury brands have built their history and theirvalues; becoming aspirational brands. Galloway, by introducing the notions of crowd-sourced marketing vs.crow-sourced merchandising, thus extends the definition of crowdsourcing.Crowd sourced marketing is the action of leveraging the power of the community for your marketing. Userreviews are a synonym for crowd-sourced marketing – for Galloway - and he affirms this is as a directionluxury brands should be following. He says that only one luxury brand actually uses user reviews: Coach’sbrand Poppy and that “user reviews are the fastest way to pop your sales: 18 to 15% within 90 days ifyou’re an e-commerce site.” People are already doing user reviews of your products – whichever they are -on other platforms: on forums, or even on ebay. If brands do not implement user reviews on their site, “theydon’t have a seat at the table (…) it is just a case of whether or not you are a part of the conversation.”Brands should not be scared of bad reviews as the community itself policies and governs them. He addsthat negative reviews “bring a certain velocity to the discussion;” and that your brand advocates will regulatenegativity. Galloway says his research proves that if you have 100% positive reviews, your sales will remainthe same. Instead, “if negative user reviews are between 5 and 15%,” he says, “sales actually go up becauseit lends credibility to your brand.”Galloway has a point when he says that consumers are reviewing luxury items anyway. But in reality, thismight not be applicable to all luxury brands and some platforms might be more appropriate than others toallow users to give their input regarding the products. Buying a Rolls or a yacht costing millions and buyingChanel bag is a different process even for affluent consumers and this marketing technique might bereserved to a certain range of products but not to all. If in terms of luxury fashion, being an expert does notnecessarily require owning these products, only certain people could give relevant input regarding a Rollsfor instance.35 DLD 11 Conference http://www.dld-conference.com/liveblog/dld11-day-1/fashion_aid_2220.htmlSocial Media and The Luxury Industry 43

Nathalie Massanet provided another example of what crowd-sourced marketing could be. During theconference she introduced a project she has developed for NAP called Net-A-Porter Live: it shows in realtime what other buyers around the world are purchasing, adding to their wish-lists, or sending to a friend.Visitors of the site can see what others are buying and can then “like” the products through the Facebookplug-in, add it to their wishlists or purchase it too. It procures excitement for customers to see how peopleat a global level are buying and also provides inspiration. E-commerce retailers such as Net-A-Porter provideso much choice that it can be overwhelming for users to make the right one. This can be a helpful tool togive people ideas of what is trending on the website. Massanet added that in a near future, a chat will beimplemented on the website for users to talk to each other. This will re-enforce the feeling of belonging to a“social tribe” that shares common values. This kind of initiative is what keeps NAP ahead of the game:Massanet understands social but not only does she uses establish social platforms for her brand, she alsoconsiders how to implement social solutions within her website. Net-A-Porter Live is like worldwide window-shopping where women can get inspiration; not from anyone, but from their social tribe as this is happeningon the actual website and includes mostly actual purchases. This is a main difference: who are the peopleinvolved and on which kind of platforms are they featured on.In terms of crowd-sourced merchandising, the question is quite tricky for luxury brands. They areaspirational brands, trendsetters not crowd pleasers. In Fashion, a couple of websites have offered usersthe possibility to submit their own designs – crowdsourcing their designs basically. The idea being that theremight be very talented people, maybe undiscovered designers that do not have the contacts or theresources to show their ideas otherwise. The principle is usually the same: through their Facebook page orother social platform – sometimes their own websites, users submit their designs and then the communityis asked to vote for their favorites. The most successful designs in terms of likes or pre-orders get to be putinto production and sell via the mother brand’s e-commerce website. The idea itself can be relevant forfashion brands if done the right way. Not everyone is going to submit their designs and the mother brandstill gets to curate what will be put into production or not, ensuring that the created item matches thebrand’s culture. Brands have also been experimenting on this with power-users such as bloggers – seeFashion blogger Elin Kling’s collection for H&M. But for luxury brands this is clearly a difficult task as theymust be ahead of the trends. They are the creators. They are perpetuating a certain “savoir vivre,” a definitequality, a vision. They are inspirations for people, not only for what they produce but also in terms of values.Coco Chanel will always be remembered for reinventing the way women dress, breaking the codes, andimplementing newness revealing the evolution of women in society. Bergdorf Goodman, the famous NewYork department store, has recently partnered with Italian luxury brand Fendi to launch a promotionalcontest on Facebook: pure crowd-sourced merchandising. The designs of the bag were already set and thechallenge was about the colors: “Fendi Frenzy: The Color Challenge.” Users were invited to submit their «Social Media and The Luxury Industry 44

designs » on the retailer’s Facebook page. Fendi’s team of designers reviewed the 5 participants with themost votes and the winner’s creation will be part of a limited Fendi for Bergdorf Goodman collection. Thewinner will also receive his very own bag for free. This type of campaign is created to get users continuallyengaged and to gain attention and “Likes.” As the designs were already set – in terms of shape of the bag–and as the collection was a limited edition for Bergdorf Goodman instead of being directly handled by Fendi,it is reasonable to question the effects of this campaign in terms of luxury marketing. Are these type ofactions demonstrating that the brand is forward thinking and manages luxury’s consumers desires or isthis more of a PR action, to gain attention, to reach a wider audience? The main question being: what kind ofimpact does this have over Fendi’s image? Luxury is about experiencing something special, about scarcityand personalization, about talent and innovation. This campaign was not about Fendi but more about thenumber of “Likes” gained by Bergdorf Goodman. For Bergdorf Goodman which sells a wide range ofproducts, this was a great operation: it brought attention to the store and demonstrated how much it wasinnovative, capable of procuring a great experience for its users by allowing them to have the opportunity ofdesigning their very own Fendi bag. For Fendi the benefits were very limited. If the campaign had evolvedaround the quality of the materials, the softness of the leather, getting the identity of the brand right, etc;maybe the experience would have been different. The truth is that the actual customers could be skepticalabout buying an expensive bag designed by someone on Facebook. In terms of crowd-sourcedmerchandising, it is a very complicated process for luxury brands and if they ever decide to reallyexperiment this route, they will have to make sure that the experience is incredible and maintains thestandards the brand has set.Social Media and The Luxury Industry 45

2. Social media are an interesting way of enriching the luxury experience onlineMost luxury brands think about social media as a one way broadcast medium and are not really listening.They are scared about negative comments and still struggle to understand the real power of communities.But brands have understood that social media is a key tool to advertise and to make sure that more peopleare exposed to their products. In today’s environment, luxury consumers could be surfing on any websiteand liking any kind of Facebook page. Luxury fashion consumers for instance, have evolved; today they aremuch more likely to mix key pieces of clothing with more affordable labels. It is important for brands tocontinue increasing their audience so that each one of their campaigns reaches more people. That is whybrands have started working with power users: people who have succeeded in gaining attention, in creatinga certain voice on the web, usually thanks to their expertise in a certain domain; like bloggers.Brands are scared of opening conversations on their own websites and sometimes even on their brandedsocial media accounts, but they do realize that advertising in magazines is not sufficient anymore and thatother forms of media have appeared. Top bloggers around the world have tens of thousands unique visitors.Considering the level of influence they have reached, brands know how much of a good opportunity it is forthem. By working closely with bloggers, brands can show another face of theirs, a more human face. Socialmedia are all about transparency, knowledge, sharing, discussing, etc. And for luxury brands it is a struggleto succeed in this particular case. So bloggers do appear as a great way for the most “social mediareluctant” brands to open up their doors to a wider audience. Bloggers have an audience; a certainexpertise, but most importantly, they are passionate. However brands cannot work with bloggers in any kindof way, as it is essential that any form of communication meet the standards of the brand. Additionally,blogging contrary to journalism is about viewing everything from a personal point of view; it is more aboutsubjectivity than objectivity. So brands have started to showcase their savoir-faire, their expertise, theirhistory to online power users like bloggers, usually by inviting them to experience the brand offline. Chanelhas understood this for a long time and in 2007, the brand invited top bloggers from all around the world tocome and experience the brand in Paris, allowing them to see the ateliers, talk with the designers, visit CocoChanel’s apartment and meet Jacques Polge – the nose of the brand, etc. We have mentioned before thateven if not all users can afford to buy ready-to-wear, most people can afford a bottle of perfume. To makesure that even buying a simple bottle of Chanel perfume is a special experience, the brand wanted bloggersto meet the great Jacques Polge and for him to introduce them to the science of scent. All blog posts sayhow impressed and overwhelmed they were to get to experience the brand in its very own place of birth,learn and experience all this history, getting to see the work that is realized every single day by thecouturiers, etc. Bloggers got to experience the brand as few customers ever did. And they have then beenable to tell the story of their journey, bringing the experience to life with their own words, allowing every oneof their readers to live the dream through the eyes of their favorite blogger. Brands have been making surethat they could reach a wider audience and that users could get to experience the brand as a whole. This iswhere social media matters so much: it can truly enrich the luxury experience online and thus the power ofluxury brands.In terms of customer service – which is a key part of the luxury experience, some brands have also starteddoing some interesting things through social media, by taking advantage of its instantaneous capabilities; forinstance, by creating dedicated Twitter channels to answer users’ questions. In today’s fast pacedenvironment, people no longer have the time nor the patience to wait 10min on a hotline to get someone onthe phone. Because of the Internet, people are now expecting to find anything they want in the instant.That’s why in many cases; customer services seem completely out dated. On Twitter for instance, users –who are often customers too - have to express their concerns in a very explicit way – only 140 characters –Social Media and The Luxury Industry 46

and brands have dedicated teams ready to respond. Luxury brands have yet to embrace this way ofremaining close to their customers; indeed most of them do not need to deal with such large number ofpeople as more affordable brands, but some have been exploring interesting options. MR PORTER forinstance – the men’s version of Net-A-Porter – offers every Friday between 4 and 5pm personal shopperson their Facebook page and through their Twitter account. As said before, luxury is all about the experienceand the challenge to maintain the in-shop standards online is sometimes complicated. In this precise case,the luxury e-retailer succeeds to provide the same level of quality in its responses, as it would do on theironline magazine. Every response starts with @MR XXX in capital letters - as is the MR PORTER logo - andprovides customers with insightful feedback and often suggests them an item directly on the website. This isa very interactive approach that could be catastrophic if not handled the right way. If someone at a juniorlevel was handling the responses, his potential lack of knowledge in terms of style or just regarding theavailable products could mean a lower quality than the content available on the website. As the whole MRPORTER’s concept hinges on a magazine that people can shop from, this could diminish the power of thebrand. In this particular case, most probably an editor at MR PORTER gives advice to users for an hourevery Friday; in comparison, in a shop, salesmen are not necessarily experts in style, nor have the time to dothis. This is a great example where social media, by implementing a competent human presence as thevoice of the brand, has reinforced the luxury experience online, providing users with relevant advice. This isalso very valuable for a brand like MR PORTER – a very young brand; launched earlier this year - toshowcase its knowledge, and get more people to experience its fantastic concept of a magazine that youcan shop from (MR PORTER’s Editor used to be Esquire’s).These are examples of how social media have helped brands enhanced the luxury experience online. But aplatform like Facebook is still quite limited in terms of creativity. The few brands that tried to implementshops within Facebook, like Tory Burch, have understood the toughness of the task. First studies show thatconsumers are not ready yet to buy via Facebook – mainly for privacy concerns, and second the userexperience is very slow: many clicks are required before actually being able to make the purchase. Notmentioning that each social platform should have a definite mission in the overall strategy and should notreproduce the capabilities of the website. After getting strongly involved on established social platforms likeFacebook and Twitter, and inviting bloggers to explore their very own secret world, luxury brands have alsostarted to consider other options that can allow them to be more creative like iPad Apps. While maintainingthe ideology behind social media – giving users quality brand content for them to talk about; the aim withother platforms is also to enable other technological capabilities like e-commerce platforms, onlinemagazines, interactive videos, etc. 3. Digital in the larger sense is key to the luxury experienceSocial media and mobile work together: the social revolution could not have happened without mobile andvice-versa. Key data reveals for instance that Americans spend, on average, 2.7 hours per day socializing ontheir mobile device; 91% of mobile internet users access it to socialize compared to only 79% on desktops.Over 1/3 of Facebook’s 600 Million+ users do it through mobile whilst it is 50% for Twitter. The mobilerevolution has been key to the expansion of social media and working together, the possibilities are huge.Apps for instance, have been a key tool for brands to accompany the user everywhere. Many have beencreating online content to push the users to interact with the brand offline; and this has often happenedthrough the combination of websites and mobile apps. Multiple luxury brands for instance have started theirvery own city guide to demonstrate their knowledge of what is best around the world and suits theirparticular lifestyle. Gucci, within its mobile app, has implemented its little black guide which recommends toSocial Media and The Luxury Industry 47

users the favorite places of the brand all over the world: hotels, restaurants, bars, etc. Some have gonefurther, also implementing social functionalities like the Louis Vuitton amble app which allows people to addtheir own notes, photos to the places they visit; for them to build their own travel journal. Indeed the brand’simage evolves around travel. LV was first a luggage creator and in the recent years it has enriched aconcept called The Art of Travel. Whether it is on the web, on a mobile or as an iPad app, the aim was toimplement solutions for users to live the brand on all digital platforms: the key being to start from the ideaand to conceive digital solutions around it. This whole paper is about showing how brands have beenhandling the digital revolution and how they have been integrating these new forms of communication withintheir overall strategy. No need to change the brand’s image, but the question has been: how do we makesure that users can get closer to the brand, how can we enrich the user experience through these newmeans, how do we multiply the points of contact with the brand.The mobile revolution has happened because of this need for real-time information. This has pushed brandsto develop e-commerce capabilities within apps. Some brands have understood this very well. Gilt – aninvitation only online luxury retailer now realizes 8% of its overall sales through its mobile apps. So it is notjust about branding; it is also about embracing these new means of communication to meet the customer’sexpectations. On smartphones, the size of the screen still limits brands creativity but the apparition of thetablet – and more specifically the iPad – has allowed brands to create content with a different userexperience. A recent article in the New York Times called Retailers Offer Apps with a Catalog Feel explains 36how tablets provide a close equivalent to window-shopping. “Shopping on the iPad is more convenient thanusing her laptop in bed, Ms. Sara said, and easier than scrolling through tiny images on her phone whilewaiting in the car for her children.” The user experience is greatly improved and brands have succeeded notto give it the same sense as a regular e-commerce website: “now, though, retailers like Net-a-Porter thinkthey have found a way to give online shopping more of the feel of an outing at the mall or an hour with acatalog — by creating apps that resemble magazines for tablet computers.” Retailers have understood howmuch these new tools can be lucrative for them, especially since iPad owners tend to be affluentconsidering that the starting price is $499. The article adds for instance that: “at Net-a-Porter, about 15percent of shoppers buy from the iPad app, while eBay says the average purchase amount through its iPadapp is higher than through either its Web site or through mobile phones. Meanwhile, Blue Nile executivessay they expect iPad shopping to outpace Web shopping at some point.” Even if all brands have not startedto embrace this new trend linked to tablets, there are strong insights showing that users are looking forbetter online experiences and this is where the iPad makes such a difference; because the user-experienceis much better than a regular e-commerce website.iPhone, iPad, Android apps might just be a temporary thing as brands will soon be able to create apps withinthe mobile browser – web apps – thanks to the capabilities of HTML 5. Facebook investor Roger McNameeexplains for instance how because HTML 5 can allow brands to make sites much richer and much moreinteractive, the level of engagement from users will go from seconds to minutes. That is what matters mostonline. The major challenge is always for brands to keep users on their websites to eventually encouragethem to buy; combined with social tools allowing users to ask for their friends’ advice or just to show recentpurchases, brands will see a major difference. Basically, HTML 5 will allow brands to be as creative on theweb as they are through iPad apps, and even more. As we have seen all along in this paper, the key forluxury brands is to enrich the experience because this is what is at the core of luxury. For long, brands havebeen limited creatively and scared of embracing these new trends. Now, however, they are investing indigital, creating exclusive content for the web like the Lady Dior saga – a wonderful example of storytelling.36 Retailers Offer Apps With a Catalog Feel – NYTimes.com – May 29, 2011http://www.nytimes.com/2011/05/30/business/media/30tablet.htmlSocial Media and The Luxury Industry 48

Thanks to social media, brands have been able to invest more money in the production rather than in themedia investment. The same phenomena will happen with apps. Right now, there are two main OSs –Android and Apple, and multiple devices with various sized screens, complicating the task for designers,requiring extra costs to develop apps for each one of them. HTML 5 gives the possibility to create appswithin websites; the focus (including in terms of money) will shift from platforms to production, allowingdesigners more creativity, and thus enabling luxury brands to provide a better experience to their users.In today’s digital environment, it is key not to think in terms of platforms of media; but to think about how thecore message of the brand can be spread using the different functionalities of each platform. Brands haveunderstood that customers, because of mobile internet, do not consider offline and online to be twoseparate entities. Despite social media not being yet being within our TVs (Apple TV, Roku, set top boxes,Xbox are connected but not to social platforms), people already discuss what they are watching on socialplatforms, while watching the show. The time where the internet was bound to a desktop is over and societyhas started to see how digital can make their lives easier at all times. Google maps helps you find your wayin an unknown environment, price comparison apps allow customers to see if they can find the exact sameproduct online for cheaper, being an insider in a city is less and less about the places you know as this isnow accessible for all; and there is a place for brands to demonstrate their personality at all times, to meetpeople’s needs. Luxury brands have always drawn everyone’s attention because they are aspirational to all;they use the best materials, the latest technology, have a fantastic history and give us this feeling ofexperiencing something special. As the boundaries between online and offline are getting smaller; as theinternet is getting more and more mobile – 4G is coming soon allowing us to surf 10 times faster than 3G;as there is a standardization in terms of coding thanks to HTML 5; there are more and more opportunitiesfor luxury brands to impact our daily lives and make us feel like we belong to a specific social tribe.Social Media and The Luxury Industry 49

IV. Recommendations A. Dos and don’ts: golden rules and lessons to learn 1. Some key findings a. The engagement is not correlated to the size of the community The level of engagement could be related to the size of the community but there is no rule among luxury brands. This is based on a survey done by Luxury Lab about brands on Facebook. Going even further, there is a trend showing that brands that have focused more on building or increasing their community have seen their engagement rate fall. This is often due to the fact that those brands have closed their pages –the inability for users to post on the wall or comment- and thus have chosen a one-way communication. Source: L2 prestige 100, Facebook IQ b. Social media are not a promotional place for luxury brands Social media could be a great place for pushing promotions and discounts: not for luxury brands. Promotions are a good way to increase the amount of fans but do not lead to engagement. The % of interactions per number of page “likes” is only 0.07 for promotional posts, whereas it is up to 0.21 when it comes to products highlights. The reason behind this is that promotions easily attract new users who are not necessary luxury consumers. Luxury consumers and brand advocates are not looking for promotions but mainly for a sense of exclusivity. Social Media and The Luxury Industry 50

c. It is not just a one way communicationIf brands have really started to implement social media within their communication strategy, they are stillfailing to adapt to the rules of each platform and tend to protect themselves with a one-way communication.This all changed on August 15 , as Facebook does not allow brands to switch off the “post to wall” thfunctionality anymore. d. Facebook should not be seen as an islandLuxury brands tend to see the digital space and social media as an addition of different platforms that arenot specifically related to each other. More than 50% of the brands do not have a Twitter, Youtube or 37Flickr link, the customized tab “Like” or site “Like” API. They tend to use Facebook as they use their websites,in an isolated way whereas those platforms, APIs and applications are interconnected and this is where thestrength of social media relies. e. Luxury brands are playing at a glocal level on social mediaLuxury brands are still trying to find their way between global and local organization on social media. It doesnot seem like there is a single answer to that. Brands have mostly been applying a “glocal” strategy: thebrand has a unique English fan page with a tab allowing users to find their local pages, or the brand has aunique page with geo-targeted posts. Another strategy could be to use different platforms for local content.Burberry for instance, has a unique international Facebook page and multiple Twitter accounts. Figuresshow that there is more interaction around pages that adopt a glocal strategy than the ones who only haveglobal pages. If luxury brands have to adopt an international and multicultural approach, they must take intoaccount in their communication strategies the local specificities, especially when it comes to communitiesand social media. f. A few attempts at F-commerceE-commerce is very important for luxury brands, and as the social commerce trend has emerged, brandstend to be more active about it online. They try to implement more e-commerce links within social mediaSome brands have even started to try f-commerce . It is an interesting move for brands in terms of 38business, but a slightly dangerous one regarding the luxury experience. The shopping experience isfundamental in luxury, and even if it is just for accessories, this could damage the brand’s image. Mostbrands are trying to go deeper into social media because it is a new way for them to gain exposure andpotentially to sell more. But luxury brands should not be following traditional marketing rules and exclusivityis essential. Luxury brands have first and foremost to provide an experience, not only to sell products.37 Survey done among 100 iconic luxury brands on Facebook by L2 and Buddy Media in May 201138 F-commerce is an e-commerce available on Facebook, through tabs of the fan page of brands.Social Media and The Luxury Industry 51

2. Lessons learned and recommendations a. Be there or someone else will take your placeThis is a basic but important thing that brands should know: social media is different from a website andwhether they join it or not, people –not brands - are the ones truly driving these platforms, and generatingconversations. If brands do not develop their own Twitter account or Facebook fan page or even YouTubechannel, they have to be aware that fans and users could still develop it for them. Thousands of unofficialpages or accounts have been created and this is one more reason for brands to control their own presenceon social media instead of avoiding it. b. Promote content, not postsSocial media is something quite new for brands; as such they tend to focus more on the platforms than onthe content itself. Remember that posting something on Facebook or tweeting anything should not bedisconnected from your overall communication and brand strategy. Do not try to always promote your postsor blog articles across all your social media platforms, but promote the content itself. That brings us to thefollowing point. c. Dispatch your content on the right platformAdapt your content to every different platform. All social media tools and platform have their specificitiesand rules. You must respect them in order to be recognized as being a part of it, but also to being able tobuild a community and have credibility. You cannot say the same thing in the same way on YouTube, Twitteror Facebook. Those platforms are connected but they are also complementary. Use each platform for whatit has been conceived for. Try to think about the type of consumers that are on it. For instance, Twitter ismore a place to connect with “influencers;” so do not use it just to promote your new blog post. d. “Content is king, but this is no monarchy”Content is king; there is no more doubt about it. Content is king for luxury brands because it could stand asthe guarantor of luxury’s core role: quality. It is the translation of what the brand is, and it is important to payattention to every detail. A lack of content could be a reason to fail. At the same time, content itself is notenough. In the current digital space, and especially in social media, it is fundamental that brands also thinkabout usability, accessibility and “sharability” of the content. Positioning content should be as important asthe content itself, and brands have to think about how to integrate content. “When this material is organizedin a way that is intuitive and presented to the user when and where it is most relevant, the brand hassucceeded by engrossing users and increasing time spent, number of shares and steps taken towardpurchase.” Brands should think about using existing platforms when they are looking to jump into social 39media for a campaign, because people are already there, as well as the social tools that go with them. It isnecessary for brands to think both about the quality of the created content and how to position it in order tobring the best value to the brand.39 Elizabeth Schofield in her post, “Content is king, but this is no monarchy”.Social Media and The Luxury Industry 52

e. Speak when you have something to say or to shareBecause social media practice is something relatively new for brands, and especially for luxury brands, theytend to think that they have to talk because this is all what social media is about. It could be a huge mistake.Luxury brands must apply the same rigour online as they do offline, and cannot afford to post average orpoor content. Luxury brands have to speak on social media only when they can bring value to theconversation and have something to say. Social media require more real-time and spontaneous content, butit does not mean speaking too much, for no reason. Always remember that your community and consumersare not on your page/ blog/ Twitter just because of you, but because of what you deliver. You have to givethem a purpose for being here. Frequency has little influence on followers, so favour content quality ratherthan quantity. It is important that brands check their unsubscribing rate on each platform to adjust theirstrategy. f. You only get out what you put inThis point is highly related to the previous one. Because you have to give your community a purpose and areason for being here for you, you will only receive what you give. Do not expect engagement from yourcommunity with poor content or little content. Being there is not enough. Luxury brands will not be able tonetwork just by showing off. g. You are not at homeThis is fundamental. Your website is your place. Your fan page is not, such as your Twitter account or anyother presence that you have on social media. You are on platforms that are not yours, so learn thelanguage, the etiquette, and do respect them; otherwise you could easily receive bad reviews. On Twitter,use the tools and rules, do not try to reinvent them: #, RT, @ but also shorten your links. On Facebook, openyour wall to comments and posts, use tabs, videos, photos and do reply to your customers that havequestions. Social media are not just for fun. You have to understand that these social platforms have theability to increase the power of digital and enhance it: they can be used for different objectives and differentcontent: from awareness to customer service. h. Be careful of every detailLuxury lies in the details: for your products as well as for your marketing and communication strategy. It isalmost all in the details. Make the difference by being careful about little details, each time you post, saysomething, etc. Your audience on social media and your luxury consumers are also paying attention todetails. But they have a voice on social media to say what they want. Do not be afraid about that. It shouldonly be a motivation to deliver high quality and do your best.Social Media and The Luxury Industry 53

B. Content strategy for luxury brands: what type of content can be used?There are a lot of different types of content that could be used and created on and for social media by luxurybrands. Here are the major ones that could be developed by brands. All those types of content could beinteresting to build brand awareness, desire, and in a more indirect way, to drive consumers closer to thesale. In every case, it is important that brands pay close attention to create a highly and easily shareablecontent that remains consistent with the brand’s image, the marketing strategy and business objectives.If luxury brands should not turn into “crowd-pleasers,” they must understand why people are using socialmedia, what motivates them to join conversations and communities. Here are the main motivations forusers to join brand conversations on social media. Those motivations are not specific to luxury consumers. - Brand interest: followers could be first and foremost brand advocates. They could choose to join your brand because they like you, because they are interested in the brand’s universe and believe in the brand’s values. This is an important point for luxury brands as one of the main reasons consumers are following them is because they are passionate about them, they enjoy their history and values, and are proud of liking those brands. - Product interest: consumers follow brands to have information about the different products, they want to be up to date about new products or want to comment about negative or positive things about the products. - Services interest: it refers to brand utility. Consumers are looking for any service from the brand that could help them choose a product, enhance their product experience, find out more about the products and the brand. - Offers interest: consumers are also following brands for promotions. They want to be rewarded for their loyalty, or want to have offers to try new products. It should not be a real motivation for luxury consumers. - Self-interest: it is a motivation often seen among the influencers. They want to show off, to be seen as experts, to co-create and be seen as “special” consumers by the brand. It is an important motivation for luxury consumers, and has to be taken into account by luxury brands. - Other interest: it refers to all the motivations related to altruist behavior, such as “I want to meet people,” to share my interest, help and ask. It is definitely a certain motivation that has to be taken into account even if this will probably not be the motivation of the core consumers of luxury brands.After taking into account all those different typologies of motivation for consumers on social media, and allthe luxury consumers’ specificities and the roles that luxury brands have to play, here are some types ofcontent that could be used for social media: a. Artistic content incorporating productsThe specific relationship that luxury brands have with art and culture legitimates the creation of contentwith artists. As they have to be trendsetters and inspirational, luxury brands can create “artistic content,” topromote their products, but also their values and a certain form of lifestyle.Social Media and The Luxury Industry 54

The Lady Dior saga is a great example of artistic content created around an iconic product, and shared onsocial media and digital. The four movies are proper masterpieces: the Lady Noire Affair is a thriller directedby Olivier Dahan and shot in Paris [Video], the Lady Rouge is a video clip by Jonathan Akerlund [Video], theLady Blue is a visual poem in Shanghai by David Lynch [Video] and the Lady Grey is a movie directed by JohnCameron Mitchell in London [Video], all starring the French actress, Marion Cottillard. b. Behind the scenesBrands always have had behind the scenes content; it is just a matter of using it properly. This type ofcontent can easily be featured on social media via videos. Behind the scenes are very important, especiallyto emerging consumers - as it is part of their education to luxury. It enables consumers to understand thework behind the pieces of art later sold in shops.Social Media and The Luxury Industry 55

One of the best examples of behind the scenes content is the Louis Vuitton fashion show insider. [http://fashionshow.louisvuitton.com/insider.ht ml] It is a comprehensive experience into a fashion show, from the front row to the backstage. The user can experience the event and discover great quality and rich content in a highly interactive way. The content is easily sharable, and displays a Facebook connect. It is available through a dedicated website, so you can have a full desktop experience, but also via a Facebook tab.Social Media and The Luxury Industry 56

c. In-store and live eventsWhat digital and especially social media enable really well is for offline experiences such as trade/ fashionshows, PR events, parties and sport events to be experienced in a rich way online. As brands are not justproduct sellers but also deliver a specific in-store experience, this is an important type of content that caneasily be delivered on social media. It could be related to in-store exhibitions, openings, window displaycreation. This can also go a step forward and luxury brands could even host an event online.Recently, Burberry created important digital content to celebrate the recent opening of the brand’s mosttechnologically advanced flagship store at Sparkle Roll Plaza in Beijing - a 12,500 square foot store,designed by Christopher Bailey. It hosted a live streaming music event of the band Keane on the 13 of April, thplaying live from the Great Wall. This was a massive event, bringing Burberry’s Britishness to China andcelebrating fashion, music and innovation. Everything was also live streamed on Facebook and on theirwebsite. The show was combining live models with animated footage and life-like holograms with a fullyimmersive audio, visual and sensory experience connecting the physical and digital.[http://uk.burberry.com/store/content/experience/show/beijing/index.jsp - /beijing/show/1]Social Media and The Luxury Industry 57

d. Archive and brand history and heritageLuxury brands rely on a strong heritage and history. It is an important characteristic of what luxuryembodies and it is important to share it with users. It is part of the education to luxury. Social media anddigital offer a great way for brands to share old content with a fresh and innovative touch. The content couldbe old advertising, vintage photos, and historical press articles.Recently, LVMH has chosen to create a specificwebsite and content with events around LVMHbrands’ savoir-faire and culture, Les Journéesparticulières.[http://www.lesjourneesparticulieres.fr]Social Media and The Luxury Industry 58

e. Product related contentIf artistic content, educational content or useful content could be linked and related to products, it isimportant – without using too much promotional content - to deliver to the consumers what they could beinterested in: your products. It is not necessarily about the price, which should often not be given, but moreabout the functionality, how it has been made, the different colours, ways to wear it or any useful informationthat could create desire around the product. Here is an example, recently seen on the Dior Facebook page [http://www.Facebook.com/Dior] about the Miss Dior bag production. It is a simple 3 minunte video, showing the creation of a bag, but the content is dynamic, of high quality, interesting and not too long for a Facebook post. By putting it on Facebook, people can easily comment on it, like it, but also share it as it is YouTube content. It creates desire around the product, but also educates consumers about all the know-how that could then justify a certain price, and explain the difference between buying a real one and a counterfeit. f. Educational content around the brand and the cultural universeThis type of content helps consumers understand more of the history, know-how and philosophy of thebrand. As seen before, luxury brands have the legitimacy to talk and publish content that goes further thansimply about the product. This content should educate consumers about the universe of the brand. It couldtake the form of books and magazines, films, or websites. Louis Vuitton City Guides, published by Louis Vuitton, are available for more than 26 cities around the world and showcase a certain luxury lifestyle. This “art of travel” which has always been the signature of Louis Vuitton is legitimate content to share on social media. It brings value around the brand to the consumers. They also recently developed a digital and interactive version, the Amble iphone app.Social Media and The Luxury Industry 59

Brands like Cartier have always had the tradition of publishing high-end magazines to distribute to theircustomers. Those magazines could be about art or the jewellery, but also have some designers’ interviews.Cartier has digitalized a version of their Cartier Art Magazine, and also created another magazine aroundjewellery, Rouge Cartier. The last issue of Rouge Cartier was about their famous Cartier Tiaras acrosshistory and its link to royalty. [http://rouge.cartier.co.uk] g. Inspiring contentAs trendsetters, luxury brands not only can, but have to play an aspirational role. They have to giveinspirational content to consumers, whether it is about a lifestyle, around a specific product, etc. This couldeasily be hosted and shared on social media platforms, and blogs are the most used platforms for this typeof content, but it is not the only one. The content could be related to travel, cultural events, and new trends…Nowness has been a main example for such inspirational content, without supporting any specific brand, butbeing part of LVMH. The Standard hotel has elaborated upon a rather good strategy, using well the functionalities of the micro-blogging platform Tumblr [http://standardculture.com/] to provide inspiration in terms of restaurants, shopping, culture, art, etc. They also talk about new trends, as well as music. It is a great way to give an overview of the values and “style” that the luxury brands want to carry.Social Media and The Luxury Industry 60

h. Useful and practical contentThe important thing that luxury brands cannot forget is that, despite the fact that people are linking, sharing,and following luxury brands on social media first and foremost because they like the brand, they have to givethem a purpose to do so. Users and consumers will engage with brands on social media but luxury brandshave to give them reasons to do so, to spend time with them, to show it to their friends. This means that thecontent has to be of high quality, relevant to the brand, to the platform and the consumers they want totarget. The content also has to be easy to share, easy to comment on, and even easy to embed. It mustmake people feel “special.” Brand utility could go from videos about how to use the product to an addedservice. It could be videos about how to apply your make up- like the ones on the Yves Saint Laurent YouTube channel. [http://www.youtube.com/playlist?list=PLDF26048 7B088C9F3]Social Media and The Luxury Industry 61

An interesting example of an added service is the “virtual concierge” of the Ritz-Carlton on Foursquare[https://foursquare.com/ritzcarlton] i. Insight news from the brands – BlogsA last important type of content – which could contain the previous ones – is insight news from the brand.This news could come from an important person working for the brand, or from a blogger receivingexclusive content by the brand. It is important to keep this content really exclusive. It enables brandadvocates to feel special and to feel that they understand and discover more of the brand, not through aglossy magazine but in a much more personalized way. This is something brands have started to do quiteearly because they were less scared to do so, feeling that this content was more controllable.Social Media and The Luxury Industry 62

A perfect example of a brand bringing its own insights and delivering exclusive internal content is the Chanel News blog [http://chanel- news.chanel.com/], written by Karl Largerfeld. Brand advocates and the consumers will find anything they would like to know about the brand, from the making-of, to specific projects by Karl, to archives and runway information. This is a lively and much advanced platform.We could give hundreds of examples: such as Christopher Bailey giving exclusive news from Burberry, theChanel partnership with the social media Platform Ykone, but a very surprising one that affirmed the hugeimportance of blogs, was the front row of the Dolce & Gabbana runway, where Bryanboy, Tommy Ton,Garance Doré and Scott Schuman were sat close to each other. It was sort of a revolution, showing theimportance of people, and social media in the strategy of luxury brands. Social Media and The Luxury Industry 63

C. Analysis of luxury case studies in social mediaThose case studies are just deeper analysis of social media strategies or campaigns done by luxury brands.There are plenty of them, but the ones selected were advancements for the luxury industry and got it right.The analyses were done on our blog, http://luxurysocialmedia.wordpress.com/. 1. Louis Vuitton or How to Master the Art of Social Media – Published on March 27 , 2010. thThe main idea we have developed about social media is that it needs to be fully integrated within the overallbrand strategy.Social media cannot be seen as just a trend anymore, nor as a new way to do marketing. Social media is botha social phenomenon that translates the changes happening in our society and an innovative tool which canbe used for marketing, communication, sales, PR, social CRM purposes. But it remains a means to an end,not an end in itself.The luxury industry still has a lot to learn about web 2.0 and must try to understand not why but how theycan handle it.Yesterday saw the opening of the new Louis Vuitton London flagship and the brand demonstrated how socialcould be exploited in order to make a local event, a global one.What was all the fuss about?Louis Vuitton has re-opened its New Bond Street shop or Maison as Yves Carcelle explained - it is not aregular store. The Maison is ”Reflecting Louis Vuitton’s art-de-vivre and savoir-faire, conceived as the home ofa collector . . . [it] gives visitors opportunities to discover new and exciting experiences.” This new Maisonshows the Louis Vuitton belief that retail is all about emotion. Louis Vuitton wanted to renew with thefundamentals of luxury: making your customers dream about your brand. Luxury is not only about price andquality but first and foremost about the dream, about an “art de vivre,” a way of life.This is where the Louis Vuitton strategy showcased yesterday with the re-opening of their London flagshipand the execution went very well, blurring the boundaries between art and fashion. A huge self-portrait byGilbert and George hangs between the two walls of men’s tailoring. The top-floor is an “apartment” which isreserved for special clients. They can make their selections in private. This apartment boasts a Basquiat, aKoons, another Gilbert and George, and two Richard Prince pieces. 64

The main question for LV was: how can we render this opening as an exceptional event, worth the attentionfrom a global audience? (Again the question is not why but how).Of course with such a brand as LV, the traditional use of PR and communication makes any opening a veryspecial event. The muses of the brand, many famous people and some trendy Londoners were invited toassist the event. But this type of event is extremely exclusive and only a limited number of happy few actuallyget to see what is happening in the shop – the rest of the crowd remaining outside.An aspirational brand such as LV has fans all over the world and the opening of a new boutique is somethingthat interest all of them: it showcases the latest trends coming from the brand, what direction it is takingrecently, and fans want to know everything happening with this brand they love; whether they are – potential– customers or not.In our current societies, we have a lot to learn from brands like Disney, which focus on making people dream.In an article written by Agenda Inc. agency, entitled What can the luxury brands learn from Cinderella?, theyexplain that “in an increasingly crowded luxury marketplace, luxury brands should remember that it’s thestory not the product that sells, and that it’s the story that represents the biggest element of differentiationfrom the competitive set.”Yesterday, Louis Vuitton did a great job at completing this mission thanks to the use of social media; theyenabled users who are fans of Louis Vuitton to be a part of this exclusive crowd as they live streamed theevent on their Facebook page. They succeeded to engage with their community by living the Louis Vuittondream.They first got people excited by releasing a small amount of information about the event through theirFacebook page.They also created an event on Facebook that is similar to an invitation you would receive to go to the actualevent. 65

The word was spread on their Twitter account:The result?Enabling all the fans of Louis Vuitton to see the London Maison Opening, live from the Red Carpet onFacebook. 66

During more than 3 hours, Alexa Chung introduced the new Louis Vuitton “Maison” and interviewed many ofthe very exclusive guests, asking them about the brand and what it represents for them.A Facebook app dedicated to this special event was created on Facebook. This very clever app was livestreaming. It offered you the possibility to update your status with news about the event, comment on thevideo – and thus interact with worldwide users doing the same as you, which reinforces the feeling ofbelonging to a community. The camera icon – as you can see on the image above – allowed you to takepictures from the live show. These pictures were then sent to a new Facebook album created on your profile.What is extremely clever is that this album would – as something new – directly appear on your news feed,exposing your Facebook friends to this incredible quality content.This example should clearly be watched by other luxury brands – whether they are focused on High Fashionor not, as it provides key insight on how these brands can master the art of social media: - Social is not an impossible challenge. With limited costs – regarding the digital part – it achieved amazing results. The one rule to respect is to use social as a tool to reach a define aim which is part of the brand’s marketing strategy - Luxury brands have to understand that people who are Facebook users are not only millennials. Everyone is on Facebook; especially the affluents who are the target audience. Luxury brands need to adapt and build a new kind of relationship with their customers who want to be more engaged with their favorite brand. Social is a way to create a more one – to – one relationship with your audience as social media is built on people. 67

- Luxury brands must understand that recreating the luxury experience online is key. They need to get people thinking of this question Alexa Chung was asking the attendants yesterday: “What is the Louis Vuitton Ethos?” - The last advice would be that luxury brands must remain innovative. The luxury industry has always been divided between its heritage, its tradition and the necessity to remain ahead of the game, to be modern brands. Luxury brands must remain as creative as possible, especially to adapt to their users who are now spending more and more time on social platforms, discussing about their brand and consuming the brands’ content.Luxury brands have always attracted people as they are focused on the products but are more culture-centric. The launch of a new store is always an event. But yesterday, Louis Vuitton really succeeded to makeit very special for a vast number of people thanks to its great understanding of social media. As Marc Jacobsexplained, this event was “like a catwalk” and the amount of exclusive content created for the event made itexceptional for anyone who watched it.Louis Vuitton did very well because they understood that social media should not be used as an end in itself,but as a new and extremely powerful communication tool where your community does all the work. 2. Burberry: Why are the Brits always a step ahead? – Published on March 27 , 2010 thBurberry is quite a unique case study as the brand has tried to reinvent itself in the digital age. Burberry’sstrategy is to focus on a younger audience – Generation Y is its core target – while drawing its strengthsaround its past and iconic products.It seems that among the various online strategies developed by luxury brands, Burberry has managed tobecome a leader in terms of social media. What they have understood is that social media is not aboutcreating an iPhone App, creating a Facebook page or having a Twitter account. If the Brits have managed tobe one step ahead in digital, it is because they are using social for what it is: a mean to an end, a tool whichcan be used for marketing purposes. Their use of social platforms is fully part of the overall brand strategy.As Sonia Marciano, Professor of Management and Organizations at NYU’s Stern School of Business, said,« digital initiatives must be rooted in solid business strategy ». Social networks have to entail a culture changein the brand’s approach.Interview of Angela Ahrendts, CEO of Buberry for the FT 68

Burberry’s digital strategy is dedicated to providing and enhancing the online brand experience. The “Art ofthe Trench” is an example of what is called crowd-sourced marketing: their customers are advertisingthemselves, realizing a strategy of “advertising from below.”The website was set up specifically to promote the iconic Burberry trench coat. The Sartorialist, one of themost famous Fashion bloggers - Scott Schuman – was mandated by the brand to photograph millennials andshowcase how an iconic piece can be worn in so many different ways. « The Art of the Trench » is a new wayto do marketing to the Millennials.The Art of the Trench[VIDEO: http://www.youtube.com/watch?v=htFS0iGaoyg&feature=player_embedded]“Attracting the Millennial customer to luxury started two years ago — I said that we can either get crushed orride the greatest wave of our life,” says Ms. Ahrendts. “We brought people on the team who wereMillennials.”; people like actress Emma Watson, born in 1990 and who plays Hermione in the Harry Pottermovie series. 69

She is the new face of Burberry, and she knows how to talk to other Millennials. “She was 19. She is aMillennial. And it is all about attitude,” says Ms. Ahrendts.[VIDEO: http://www.youtube.com/watch?v=EoK8yZ6L9fo&feature=player_embedded]To attract the Millennial customer, as well as “to play aggressively in the digital world,” Burberry understoodthat video was a key tool and a perfect way to create conversations. They started in 2005 with their own 70

channel on YouTube but showed their advance by streaming the 2010 Spring/Summer line show atLondon’s Fashion Week.The show was broadcasted on 73 different websites, including those of Vogue, CNN, Yahoo and many more.The show appeared in 3D at global VIP events in L.A., N.Y., Tokyo, Paris and Dubai. It was undoubtedlythe most widely distributed fashion show a luxury brand has ever staged, potentially reaching an audience ofmore than 100 million users, according to Burberry CEO Angela Ahrendts. During the show Burberryappeared as one of the top ten trending topics on Twitter.This new kind of social network enables a luxury brand such as Burberry to have a customer-focused brandstrategy as well as being product-centric. They are product-centric with the “art of the trench” showing theiriconic product.But they are also product-centric and very responsive when they sell key pieces from their A/W 2010Prorsum collection during the runway show that was streamed online. That’s the proof that social media isnot only about conversation, about showing the brand. That’s the proof that being advanced in terms of socialmedia also means you’re focused on your ROI, measurement and on selling!Who is behind this innovative digital strategy? Of course Angela Ahrendts, CEO of Burberry, and ChristopherBailey, the brand’s chief creative officer. But Burberry has appointed Bartle Bogle Hegarty (BBH) to work asits strategic marketing partner.What’s the future for this brand that has just tried a new way to market its products by adding a Facebookapp to sell Burberry sport?Can we call Burberry the world’s first truly digital luxury brand? 71

V. Conclusion Thanks to the social media revolution, which is both technical and sociological, the Internet is now more important than ever in our lives. Many of us, equipped with smartphones, disconnect rarely. Mobile Internet has allowed this transformation, making the frontier between both worlds – offline and online - thinner than ever. Tools like augmented reality will only make this even truer; allowing us to point our phones to a building, an artifact, an object to access all the available information about it on the web. Geo-localization has already revolutionized the way we move – we rarely get lost anymore – and the way we discover new things: restaurants, shops, hotels, etc. Luxury hotel brand Ritz-Carlton recently decided to implement its knowledge through Foursquare; the results: once the user has followed the brand on Foursquare, if he “checks-in” a place that has been referenced by a member of the Ritz concierge team (or close to it), he will see a tip, a story, an anecdote regarding this particular location. Brands can now connect with their users at all times. And luxury brands have realized that by becoming publishers they could become more desirable than ever, reaching a far broader audience than they ever did. One might think that over-exposure could be negative for the brand but “an object becomes an objet of desire only because it is desirable to others.” And the reality is that this brand content has been created for their customers. Although everyone can access this content, few can actually fully enjoy it. A city guide featuring a luxury brand’s favorite places can only fully be enjoyed by affluent people – or at least people who can afford to travel, etc. Same rule applies to behind the scenes videos of a couture runaway. Truth, the majority will never be able to afford it, but many could spare the money to buy ready-to-wear from a luxury brand. Even if it were only one piece, this person would now be a customer. By creating all this wonderful content, explaining the history of the brand, the tradition in the making, the quality of the products, luxury brands have become more accessible – in terms of information and in terms of exposure – while remaining exclusive by keeping a certain distance with this broader audience. Remember what Yves Saint Laurent use to say: “I’m not a couturier. I’m a craftsman, creating happiness.” The question is not to know if this is true or not, but rather if people believe it. By getting more exposed, luxury brands – for those of them who have done things the right way – have succeeded in maintaining this image of “happiness” providers due to this incredible unique experience. Not only maintaining it, but describing it online, shows what is so special about this industry, these brands, these products. Describing this particular experience only made people more willing to actually live it: bringing them even closer to owning one of these products. At the forefront of desire, luxury brands set in their histories have also succeeded to reinvent their place in our societies; not as much to prove to others you succeeded, but more to make this gift to yourself. Luxury has changed because the world has evolved. The eternal debate about American luxury vs. the European vision seems less relevant when China is expected to become the n°1 luxury market by 2015. For luxury conglomerates, the focus is now on Asia. Chinese consumers, for instance, are eager to learn about luxury because in China knowledge is power. The Chinese language is based on ideograms, which means that for the Chinese consumer, the concept is more important than the characters; they identify brands’ logos as ideograms; which explains why Chinese people love logos. Another key thing is that Chinese people – as with Brazil for instance – are extremely dynamic on the web: 90% of the users contribute to online content; they are already mostly mobile users and for instance, have more friends online than offline. Considering that luxury brands’ audiences are becoming more and more diverse, it is also important to realize what must be done to communicate with these new consumers that are not necessarily familiar with luxury itself but more with brands. They need to be educated and as we have seen all along, social media is a great way to execute this mission, while maintaining a certain distance with users. 72

When we started thinking about this thesis in January 2010, few luxury brands were actually using socialmedia. In a year and a half’s time, everything has changed. Budgets are available to marketers to createextraordinary projects such as the ones we have seen all along and it seems like social has found its placewithin the luxury industry. The platforms themselves seem to have reached maturity and it is very improbablethat any new start-ups knows the same success as Facebook or Twitter. What is more probable is that weare going to see the platforms – Facebook, Twitter, YouTube, Google + - become more flexible for designersto be more creative. The real question is now, what will be the next “revolution” in the Internet… 73

VI. Bibliography Oxford Dictionaries, http://oxforddictionaries.com http://www.mymarketingquestion.com/answers/why-is-exclusivity-so-important-in-marketing http://ezinearticles.com/?An-Exclusivity-Strategy-Can-Be-Crucial-to-Successful-Brand- Marketing&id=1605519 http://marketingdirectsales.com/2010/06/exclusivity-scarcity-marketing-strategies-direct-sales/ http://www.slideshare.net/scenariodna/the-culture-of-luxury-2011 Mortelmans, Dimitri. Semiotica, 2005, Vol. 157 Issue 1-4, p497-520, 24p; DOI: 10.1515/semi.2005.2005.157.1-4.497 Blackwell Encyclopedia of Sociology, Edited by: George Ritzer, 2007 Britannica, www.britannica.com Heritage Luxury, Past becomes the Future, by Suzy Menkes, 2010, http://www.nytimes.com/2010/11/09/fashion/09iht-rsuzy.html Trends in Luxury: Scarcit, by Ethan Lyon, 2009, http://sparxoo.com/2009/08/12/trends-in-luxury- scarcity/ The Idea of Luxury, A Conceptual and Historical Investigation, Christopher J. Berry, University of Glasgow, Publication date: June 1994 Du luxe ostentatoire aux luxes émotionnels. Entretien avec Gilles Lipovetsky *. Propos recueillis par Jean WATIN-AUGOUARD. L’industrie du luxe et la mode : du temps des créateurs au temps des communicants (fin XIXe, fin XXe siècle), Marc de Ferrière le Vayer (http://apparences.revues.org/index61.html#tocto1n3) Sign values in processes of distinction: The concept of luxury by DIMITRI MORTELMANS Les orientations stratégiques des outsiders du luxe, Eurostaf. http://www.stargroup1.com/blog/why-do-luxury-consumers-engage-brands-social-media Understanding Luxury brands and Social media, by Samir Balwani, July 2009, http://mashable.com/2009/07/02/luxury-brands/ Global Web Index – Welcome to social Entertainment - Annual Report 2011. Luxe et Brand Content, Michel Campan, Matthieu Guével & Daniel Bô, QualiQuanti & l’agence Same Same 74

China Connect 2011, Time to Engage with Chinese Consumers, Conference Report, June 16-17 2011 | La Maison de la Chine | ParisDefinition of Social Media on Wikipedia, http://en.wikipedia.org/wiki/Social_mediaHow global brands can optimize social media outlets, Luxury daily (http://www.luxurydaily.com/how-global- brands-can-optimize-social-media-experts/)Fashion Collective Blog, http://fashionscollective.com/Luxury Brands and Digital Strategy, by Zachary Cohen, October 2010, http://socialmediatoday.com/zacharyadamcohen/217342/luxury-brands-and-digital-strategyFacebook IQ, L2 Prestige 100, Scott Galloway, June 2011Creating an engaging, easy and affordable content strategy, Fashion’s collective, Tamar Koifman (http://www.slideshare.net/FashionsCollective/9-ways-to-create-an-engaging-easy-and-affordable- content-strategy-8142720)Social Media & Luxury blog, by Alexandre Corda and Josephine Lipp, http://luxurysocialmedia.wordpress.com/ 75

VII. Appendix Digital Burberry Facts, send by their Head of PR 76

CONTACTS Community Manager at Socilayse, a team of social media specialists in London, part of the integrated communications agency MPG Media Contacts. Alexandre has specialized and became a social media strategist for the Fashion, Luxury and Lifestyle industries. Twitter @alexandrecorda Blog http://alexandrecorda.wordpress.com/ Linkedin http://uk.linkedin.com/in/alexandrecorda Contact corda.alexandre@gmail.comALEXANDRE CORDA JOSEPHINE LIPP Account Manager at Marcel WW Agency, Publicis Groupe, a creative and interactive agency in Paris. Josephine is specialized in digital strategy, focusing on the Luxury industry. Twitter @josephinelipp Blog http://laptitemome.com/ Linkedin http://uk.linkedin.com/in/josephinelipp Contact lipp.josephine@gmail.com Social Media & Luxury http://luxurysocialmedia.wordpress.com/ 77

http://pinterest.com	4
http://twitter.com	2
https://twitter.com	2
http://luxurysocialmedia.wordpress.com	1

SOCIAL MEDIA AND THE LUXURY INDUSTRY

by josephine lipp on Mar 03, 2012

Accessibility

Categories

Upload Details

Usage Rights

4 Embeds 9

Statistics

SOCIAL MEDIA AND THE LUXURY INDUSTRY Document Transcript