Information Technology Reference
In-Depth Information
Internet we may understand luxury's initial opposition to the Internet. These
presumptions range from the credence that the Internet is a channel of retail
for price-discounted mass products and damaged goods, or that online adver-
tising over-exposes a brand's image and damages its equity, or yet again that
luxury clients won't bother with making online purchases but would always
prefer the sumptuous surroundings of the physical stores and the real human
contact with the products. You and I both know that these assumptions are no
longer valid.
Irrespective of the fact that luxury should adapt to a changing business
world rather than remain inflexible and risk becoming obsolete, we have
also to recognize that luxury thrives more on progressive evolution in both
business and creation and would likely flourish less by jumping on the band-
wagon of change without a sound strategy. This could also explain the vis-
ible struggle that the industry has been undergoing in its attempt to strike the
right balance between satisfying the requirements of luxury in a changing
market context and consumer orientation, driven by the Internet revolution.
Fortunately modern business applications have made it possible to develop,
adapt and apply e-business strategies that will enable luxury to thrive on the
Internet and the digital world without compromising its innate qualities. Exploring
these strategies, styles, systems and applications is what this topic is all about.
In recent years and particularly in the last year, the luxury sector has
shown signs of commitment towards catching up with the other industries
that are considered to be more advanced in e-business and regaining its posi-
tion as a truly innovative industry in every sense of the word. For example,
Louis Vuitton's launch of the Soundwalk (Figure 1.2), the first digital prod-
uct by a luxury company, introduces a new chapter to the extension of luxury
product categories beyond physical products to virtual products. Armani's
reconstruction of its Milan flagship store in the virtual world, Second Life;
Cartier's creation of Internet downloadable music and films; and Ritz-
Carlton's launch of Internet-based short movie series (Figure 1.3) shot in its
different hotel locations are all testimonies of the luxury industry's increased
openness to the adoption of digital technologies. Luxury companies are
also using the Internet as an essential channel for educating new clients and
reinforcing their positioning in emerging markets such as China, India and
Russia. A notable example is Lancôme's online community, Rose Beauty,
which in less than a year has become one of the top references in online
beauty portals in China, generating 550,000 message posts every month.
While all these efforts demonstrate a movement in the right direction, there
remains a lot to be done, particularly in customer experience and brand rein-
forcement through engaging the clients that now have control of the cyber-
space. Luxury clients currently have high expectations from luxury brands
in terms of online innovation even as this channel becomes a crucial source
of growth for brands. If these expectations are not met, today's luxury clients
will simply move on.
