Blog: Minter Dial – Digital Transformation for Luxury Brands.

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Digital Transformation for Luxury Brands – How to Add Value in a Luxurious Way.

This is a re-post from Minters blog at The Myndset.

The digital strategies of luxury brands run the gamut from avant-garde (Burberry) to retrograde (e.g. Celine (LVMH) and most old-fashioned watch brands, such as Vacheron Constantin & Blancpain, that refuse to do eCommerce). Whether through ignorance, fear or conservative (reactionary) thinking, luxury brands have generally been slower to move. Digital transformation for luxury brands has, for a number of reasons, been a more complicated process. Recently, however, there has been a lot of news and change in the digital luxury landscape, including the merger of Yoox and Netaporter to form an integrated luxury online player. There has also been pressure coming from the fast-paced changes in the Chinese luxury market.

When faced with a cocktail of terms such as “open,” “transparent,” and “real-time,” for the typically discrete, opaque and refined-timethat characterizes many luxury brands, the digital cookie has been hard to digest. {Please tweet this!} Luxury brands are no longer being tested and benchmarked in the digital space against their peers, but against all manner of competition and distributors, including the likes of Amazon, Apple and Gilt. {Do tweet this!}

Luxury eCommerce

Among the major luxury brands to refrain from giving their customers what they want digitally (i.e. eCommerce) have been Fendi, Chanel and Celine. Fendi (LVMH) only recently acquiesced and opened up its eCommerce site in March 2015. Chanel just announced that it will open up this new channel by the end of nextyear. Clearly, they are in no hurry. What has been a strategic absence may turn into a strategic error in that the learning curve will remain long and steep against a competition that has been living and learning the ropes for several years. Various pundits place the eCommerce potential for luxury brands at 10-20% of total sales versus the current estimated 8%, according to this composite graph below via the Wall Street Journal (Bain and Altagamma/BCG).  

Whether it is in terms of user experience, social media or customer service, the luxury brands must find ways to provide superior value-added services and deliver against heightened expectations set by the lower-priced competitors. {Tweet this!}

Digital transformation for luxury brands

In this infographic, based on a survey of over 300 executives, we look at how luxury brands are facing the digital transformation challenge. In terms of digital strategy, the role of leadership, digital marketing budget and social media, we see how luxury brands have been or are planning to navigate the transformation journey differently from the other segments.

digital transformation for luxury brands v2

This infographic is part of a series on Digital Transformation.

You can also download the above “Digital Transformation for Luxury Brands” infographic as a PDF here. And a final thanks to my graphic artist, Renaud Ramaud (Yopps Agency), who produced this piece.

 

Minter Dial is an expert and speaker on Branding and Digital Strategy at The Myndset. He combines years of senior multi-cultural leadership experience, worldwide management of Redken (US #1 salon professional brand) and a deep involvement in the Internet and new media. In 1998he created L’Oreal’s first ever web site. With this experience, Minter helps brands to capitalize on the digital opportunities by providing proven methods to drive the mindset change necessary to make a digital strategy succeed. Minter is also VP of International Media and Business Development for Netexplo, a Worldwide Observatory of new technologies.

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