Information Technology Reference
In-Depth Information
Chapter 1
Is luxury (still) afraid of
the Internet?
“Every few hundred years in western history there occurs a sharp
transformation. Within a few short decades, society rearranges itself:
its worldview, its basic values, its social and political structures, its
arts, its key institutions. Fifty years later there is a new world.”
—Peter Drucker, Business Guru
The world has changed because of the digital revolution and it will keep
changing. This change is currently being felt by every society in all
their facets and will continue to resound in every business sector whether
technology-driven or unreceptive to transformation. It is a reality that can no
longer be questioned or resisted, even by an industry that carries as much
economic and socio-cultural clout as the luxury sector. The reverberation of
this digital-driven revolution is echoing even louder in the face of the cur-
rent global economic recession, which has encroached into the luxury arena
and has led to the stalling of the uninterrupted growth that the luxury sector
has known for several decades. The famous phrase “unsinkable luxury” has
been challenged by the multiple issues that digital technology has brought to
the luxury domain. To make matters worse, the arrival of the dreaded word,
“recession” in the luxury vocabulary, mainly as a result of stalling growth in
key markets, has thrown the entire sector into a pandemonium of sorts and
magnified the challenge of the digital and interactive technology. Hopefully
this scenario will be temporary.
This drastic transformation that is powered by technology is taking form
in ways unexpected and interconnected. For starters, the challenges are not
only in luxury e-retail - which has been an ongoing debate for over a decade -
although as I write the industry as a whole continues in its struggle to get
its act together and cover the gap of its lateness in adopting e-retail. In the
meantime the social web movement has come along led by citizen journalists
(otherwise known as bloggers) and social network addicts (otherwise known
as cyber residents) who are affirming the power of independent thought and
triggering a worldwide generation of opinionated consumers. Their spin-
off sibling, the virtual world, which until now has been underestimated, is
