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specialists. The majority of both established and emerging luxury companies
are still struggling to understand the scope of the Internet and how to allot
a place for it within the internal organization. Others are trying to overcome
the widespread (and unfounded) animosity that exists between the Internet
retail and store retail teams as they compete for the same clients and sales
revenues. The brands that will lead in luxury online are of course those
that embrace the Internet as a complement to offline activities, instead of
viewing it as a threat; those that integrate Internet activities with existing
offline departments, instead of treating the Internet as an independent busi-
ness unit; and those that apply Internet and digital tools in the full-range of
their online marketing activities.
The second fundamental challenge facing luxury companies online is
the somewhat unfounded belief that the Internet is simply a channel of
communications or a channel of retail, in other words, advertising and sell-
ing. Several brands approach the Internet as another advertising medium that
is evaluated in the same way as magazines, television and newspapers. This
is appalling because there is simply no basis for viewing the Internet as a sin-
gle channel. The Internet is not a channel that serves one (or even two) busi-
ness purposes; rather, it is a multi-channel for communications, branding,
client services, retailing, consumer analysis, client congregation, marketing,
customization and product development, not to mention managing logistics,
supply chain and operations. Digital technology enables the assembling of
these multiple aspects for the optimization of efficiency and performance. It
remains a surprise that some luxury companies have subscribed to the outra-
geous idea that the Internet exists only for communications through adver-
tisements and that they need media buyers to execute this. Even if a brand
has applied the most effective choice criteria for selecting suitable websites
to advertise (for example A Small World and Café Mode), as Larry Weber
appropriately writes in his topic Marketing to the Social Web , “you don't just
drop 30 ads into websites the way you have dropped 30 spots into television
shows or a color spread into a magazine”. Except if your plan is to look back
two years down the line and ask, “What were we thinking?”
In order to communicate online effectively, a luxury brand must first sepa-
rate advertising from communications because advertisements are one-way,
and the Internet now requires two-way communications where the receiver
is engaged in a 360º interaction with the brand, even on e-retail websites (see
Figure 1.4). Understanding how to approach e-communications both through
the brand's own website and other appropriate websites goes far beyond adver-
tisements. Luxury brands currently need to comprehend how to “converse
with” their publics because the Internet is now a real “world” that includes the
social web where consumers also congregate, connect and exchange dialogue
in an independent way that excludes both the luxury brands' direct participation
and the influence of the mainstream media. As much as I recognize the impor-
tance of advertising, I have to emphasize that the Internet is not a channel of
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