Internet Marketing for Luxury Brands: Good or Evil?

Today Internet is a medium used by the majority of the global brands as an indispensable marketing tool. Its multiple benefits make it look like a panacea for the marketers’ problems. Still, some of the well-known brands consider online marketing damaging to their image. Those are luxury brands. Luxury goods have a rarity value which makes them more desirable, while Internet is available to the masses seeking a bargain.

Luxury designers invest heavily in retail outlets which play the most significant role in the overall luxury buying experience. Physical surrounding and personal attention of luxury stores continue to remain important to the customers, while online shopping is seen as being to mass and not exclusive.

Few of luxury brands such as Prada, Bulgari, Burberry, Gucci, Louis Vuitton, Bang & Olufsen, Tiffany's, Chanel sell their goods directly online. Real luxury brands don't have successful websites. They look like shiny brochures, take a lot of loading time and lack functionality. I am not sure about the peacefulness of my dreams tonight after seeing the image on the index page of Prada website.

Yet, few companies, such as LVMH (Moët Hennessy - Louis Vuitton) realize the importance of their online presence. LVMH owns the E-Luxury site on which it sells most of its brands augmented with selected products from other high fashion brands. Still, instead of using any of its brand sites for the online selling, the group has set up an independent site, with an unconnected brand.

While most of the luxury brands keep ignoring the Internet, the demand for global luxury online sales is on the increase. Recent reports indicate that the wealthy are almost all online and are pleased with making online purchases. Therefore, even considering that online shopping is much less fun than traditional, there's no reason not to use the Internet to share information about the brand and create desire. Internet marketing for luxury brands could be an opportunity to reinforce the brand as it exists in offline world stores.

Image: Bulgari website

What the World Needs Is Zero?

As it was stated in Computer-Human Interaction Conference in Vienna back in 2004, ‘blogging is the latest form of online communication to gain widespread popularity and it is rapidly becoming mainstream’. Well, there are no doubts that today it IS mainstream already. Blogs in their current format emerged around 1997, and today, according to Technorati’s State of the Blogosphere report, we have an almost unlimited choice of blogs for our Readers, which amounts to more than 70 million, with 120.000 new weblogs created and 1.5 million posts written each day. So there’s little surprise that companies find blogging to be a very useful tool in their marketing campaigns. They use blogs as a new communication channel, providing an opportunity to inform their customers about their products and services worldwide and to receive feedback.

I am going to write more about how particular brands use this web phenomenon in the next posts. Today I just want to focus on one example, a controversial one, offering something to learn for the marketers. Enough about Pepsi, let’s talk about Coke for a change. Yes, Coke. Zero Coke. In 2005 as a part of a massive campaign in Australia Coca-Cola launched The Zero Movement blog. Oh, it’s awesome. Just have a look at it. The writer is apparently a young man in his 20s, depressed by working in a ‘cubicle’ under unbearable pressure. One day he wakes up (well, I think it happened just after he woke up, or, more likely, he was still dreaming – as such ideas come up only in the wildest dreams) and decides that ‘what the world needs is ZERO’. For real. I’m serious. ZERO = POWER. ‘Why do I have to act my age?’, ‘Why can’t a lunch hour go all day?’, ‘Why can’t guys…?’, and, of course, ‘Why can’t you have real taste and zero sugar?’. The comments to these posts are even smarter and look so real: ‘Coke Zero tastes really nice’ , ‘thank you Coke Zero... you made my life worth living!!’. You don’t have to wonder why this blog was widely criticized in press. The desire to connect to the target audience was apparently too strong here.

This blog got a lot of publicity, even more with the creation of The Zero Movement Sucks blog, criticizing Coke’s online spamming. But, of course, the campaign was planned with the intention to be controversial. The TV commercial they initially used in Australia was banned. Coke had to comment on ethics of its activities. Still, this campaign resulted in Zero Coke being the most successful new product launch in Australia retail history. Was Coca-Cola sure about its success? I think it might have failed just the same. But apparently well-calculated risks are worth taking if you want a success in marketing.

Image source: http://icanhascheezburger.files.wordpress.com/2007/02/do_not_want_coke_zero-chris.jpg

Pepsi's Social Media Marketing: Wanna Play?

Some of you have probably already heard that PepsiCo International, a company with revenues more than $39 billion, is going to launch a social networking site focused on football later in April starting from Europe. The Beta-version of Pepsi Youniverse is already available for football fans, allowing to create your Visual DNA and compare it to those of big football stars like Lampard, Henry, Messi, Ronaldinho, and, of course, Beckham. The Visual DNA is an Imagini Holdings Ltd invention – it is a personality test, you have to answer the questions by choosing the appropriate images to get your psychographic description. Pepsi Youniverse’ Visual DNA describes what type of a football fan you are, using questions like ‘The best thing about being a footballer is…’. My closest match, according to this test, is Lampard, and football is definitely a huge part of my life (they don’t ask you whether you’re interested in it or not, it is assumed that you are). After launching this site Pepsi plans to create even more networks, focused on music and ‘hopes and dreams’.

There already exists another Beta-version (I am surprised how it’s got through the alpha test, though) which I personally find more interesting, but of which almost no one heard about (at least Google search makes me think so). It is another Pepsi social network targeting specifically the Pepsi Max drinkers. I liked it a lot not only because I had to choose what type of man I am (Visual DNA again), select the contents of my car and then select my gender (female, what a surprise), but because it lets you merge your email (whether you use Gmail, Yahoo or Hotmail), other networks (Facebook, Flickr), RSS subscriptions, and that’s not the whole list. It also includes space for blogging, digital storage, videos, and standard social networking site options. And as we are using more and more different sites, with even more appearing almost every day, merging it not a bad idea at all.

But let’s get back to Pepsi: all these networks could definitely become very powerful research and marketing tools. If people do really need them. How many teenage football fans and for how long would be amused by comparing their personal profiles to Ronaldinho’s? Are these investments going to pay off?