Is Digital Killing the Luxury Brand? | Adweek
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Is Digital Killing the Luxury Brand?

The democratizing power of the Web means figuring out how to go online without going downscale

Cross Stitch: Jacqueline Gable; photo: Glenn Lowson

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High-end fashion brands have a problem. Let’s call it the “Kreayshawn quandary,” after the young Bay Area rapper made famous by the Internet and her hit song “Gucci, Gucci,” which has gotten over 16 million views on YouTube. Sample lyrics: “Gucci, Gucci, Louis, Louis, Fendi, Fendi, Prada...the basic bitches wear that shit so I don’t even bother.”

It may have taken a rapper to say it best, but the message has been clear for a while: Luxury designers are losing their cachet. And the problem is only being intensified by the medium that made Kreayshawn a star.

Just a few years back, most high-end fashion brands distrusted all things digital. Their fear was understandable. Digital is democratizing; it’s about accessibility. The brand image for high-end fashion is all about inaccessibility: Keep the masses out so that the people who can afford to buy their way in feel they’re exceptional.

Then those haute couture designers who’d shunned new media took some hits—thanks to the recession—from price-slashing department stores and discount websites, at the same time they began paying attention to changing retail statistics. And an industry obsessed with being ahead of the curve realized it was dramatically behind.

“A couple of years ago, we were in Italy, and we met with [Donatella] Versace and [an executive at] Armani…and they were like, ‘Digital, whatever,’” remembers the CEO of an agency that deals with several luxe brands. “Now it’s, ‘How can I do it?’ There’s been almost a cataclysmic shift.”

“There is a sense of urgency associated with digital platforms,” adds Vera Wang president Mario Grauso. “We haven’t so much shifted [advertising] resources, but rather we have allocated additional resources to build, support, and promote our social media platforms.”

Now that they’ve embraced digital, though, high-end brands find themselves having to face the fears that kept them from it for so long. Digital isn’t as easy to do as some of them would like to think. And if the brands do it badly, the democratizing effect of digital can backfire on them, further eroding the aura of exclusivity that defined them for generations.

The reasons for going online are, as most other industries already know, compelling. Eighty percent of people with an income of over $250,000 are social media users according to Unity Marketing research, and 50 percent have used social media to learn more about a brand or see new products. Data from management consulting firm L.E.K. Consulting shows that those earning more than $150,000 are the only people spending more than they did before the recession. And a 2011 Digitas study notes over the next decade digitally entrenched millennials will become the next major luxury buyers—and should therefore be targeted now.

From a revenue standpoint, it makes perfect sense. Many luxe fashion brands have huge beauty and accessories businesses, and make their real money not from couture but from shoes, handbags, jewelry, makeup, and so on. And what better place to advertise and sell a $23 nail polish than online?

So brands from Versace to Hermes to Chanel have delved into Facebook, Twitter, and other social network sites. They’re blogging, live streaming runway shows, introducing mobile apps (Vera Wang’s, in development, will be a “wedding design and inspiration app” for the iPad), running cross-platform campaigns, revamping websites with a new focus on e-commerce, and jumping into mobile commerce—doing, in other words, pretty much the same things other categories have been doing for years. New York’s Mercedes-Benz Fashion Week—where former clipboard-bearing publicists are suddenly all hauling iPads—has seen a flurry of related digital efforts, such as the live streaming of some 30 shows at YouTube.com/liverunway.

Of course, not all labels have been laggards. Designers including Diane von Furstenberg and Ralph Lauren “got” digital early, and for younger brands like Prabal Gurung, it’s been a touchstone. In May 2009, Demi Moore tweeted a picture of herself wearing a dress from Gurung’s first collection; her husband Ashton Kutcher retweeted it, and Gurung immediately had 500 followers (he now has 31,000). “I said, ‘Here’s the power,’” Gurung remembers.

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