Is Digital Killing the Luxury Brand?

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

It’s worth keeping one undeniable fact in mind: Social media can disseminate the information, but there are still only an elite few who can afford the high-end goods.

Derek Lam learned this, ironically, when it partnered with eBay earlier this year to create a less-expensive line that was actually crowdsourced: Users were given a selection of different garments and voted on which ones would be produced. Derek Lam’s CEO, Jan Schlottmann, says it was an experiment to see “how we can use the immense traffic and technology of eBay to find out more about our consumer.” Traffic to the company’s website increased, Schlottmann says, and e-commerce sales doubled. But those sales still only made up 1.5 percent of the company’s total—and most of those sales were of discounted items or accessories. “It’s still a harder sell to sell a $1,500 dress online,” says Schlottmann.

Which brings us back to the problem. If brands’ websites and social net offerings are geared toward less-expensive lines, is this hurting their exclusive images? If they don’t decide soon, the people—the bloggers, the tweeters—will decide for them. To quote another rapper, Theophilus London, “The clothes don’t make the man; it’s the man that makes the clothes.”

But maybe the notion that a brand could ever truly own its image was always an illusion. “You can tear magazine ads out, cut them up, paste them on things—they’re interactive,” says MediaLink’s Salomon, “and they reach anyone at a nail salon getting a $15 manicure. What does that say about controlling your message?”

—Additional reporting by Emma Bazilian