Information Technology Reference
In-Depth Information
potential of the Internet, but also its ability to change the behavior of millions
of people in a matter of seconds and positively to orientate them towards
particular brands. These are also the brands that understand that the Internet
is a multi-dimensional channel that comprises many segments.
The fifth area of challenge for luxury companies as they navigate their way
in the virtual world is linked to the luxury clients who are apparently the rea-
son why luxury brands were forced to go online in the first place. As men-
tioned in the early part of this section, the majority of luxury companies were
initially reluctant to adopt the Internet until they realized that the wealthy
segment of the consumer population were mostly online and were also using
the Internet beyond information search to actually shop! This was back at the
beginning of the noughties when the frenzy of registering domain names and
developing websites was in full swing. What many brands however mistak-
enly took for granted was that their consumers would stay the same after over
a decade of being exposed to the Internet. The truth is that the Internet has
changed the orientation, behaviors, attitudes and interests of luxury clients
worldwide. Luxury clients have moved on from the discovery stage of the
cyberspace to the control stage of the virtual world. Their behavior change is
reflected in the way they interact with one another and subsequently with lux-
ury brands both online and offline. They have become demanding of instant
rewards and do not hesitate to relegate the brands unable to deliver.
In addition, the vastness of the cyberspace and the prolific way that lux-
ury clients use the Internet has also resulted in an additional challenge of seg-
menting and profiling them online (quantitative) to further understand how
their online attitudes are reflected in their offline relationships with the brands
(qualitative). There are incessant questions linked to this challenge, such as
“Where and how do we find luxury clients online beyond the shopping web-
sites?”, “How can we segment them?”, “How can we evaluate their attitudes
and interests?”, “How can we monitor their presence online?” All of these are
valid questions and their answers are required in order to develop the appropri-
ate marketing and retail strategies both online and offline. Therefore the brands
that have raised these questions are already on the right path towards finding
the solution for obtaining competitive advantage both online and offline.
Then there is the big question of e-commerce, which is directly connected to
revenues and one of the measures of the success of a luxury brand's online pres-
ence. Two fundamental questions linked to luxury e-retail (I prefer this term to
“e-commerce”, sorry Americans!) are “What to sell?” and “How to sell?” The
former is related to understanding whether all of the product range in each cat-
egory should be displayed in the e-boutique or not, and, if so, whether their their
prices should also be placed online or not. If not, then there is the additional ques-
tion of whether the choice of the appropriate products should be based on price,
product category, geographical market, client segment, demand, competition,
logistics and so on. There is also the issue of catering to different geographical
markets and possibly different languages and prices, as well as managing the
