luxury social media

Is Luxury Marketing Changing?

Isaac Mostovicz writes...

A recent report by TAMBA notes that luxury brands, which shunned social media in the past, are embracing it much more today. Consequently, the report questions the status of exclusivity, a term that has been used interchangeably with luxury. The report claims that identifying luxury with exclusivity is an “old European myth” that does not appeal to today’s young, more democratic audience.


Showing the importance of social media among luxury shoppers, Kay Hammond of TAMBA points out several takeaways. First he claims that the notion of exclusivity is changing and that young people are purchasing luxury brands as a way of expressing personality as opposed to acquiring rarity. Secondly, he says that social media is about personal connection; despite its being seemingly removed from the customer, it is actually used to reach customers in more personal and direct ways. Lastly he proposes that luxury consumers are increasingly prominent social and mobile media users.


I think that some of Hammond’s claims are questionable. Throughout his article, Hammond refers to luxury products and services as “exclusive”, relates luxury to “exclusivity” in general, and then claims that “exclusivity” is an unappealing “old European myth”. However, throughout my years of research I never found “exclusivity” used to describe any facet of luxury. I personally do not fully understand what the term “exclusivity” is meant to convey. Though customers might use the term to inaccurately describe the value they find in luxury items, serious luxury researchers never refer to “exclusivity” when talking about luxury. Hammond presents a quasi-professional claim with no serious basis about “exclusivity” being related to luxury, and then claims that times have changed and this relation no longer stands. However, without first establishing what “exclusivity” is, it is meaningless to say that people shun it in luxury today.


A term more accurately used in luxury is rarity (which was perhaps what Hammond intended by “exclusivity”). However, without understanding what rarity it, it is impossible to judge its value among luxury consumers. Rarity comes in two forms, depending on the individual. Some see rarity in a product itself. To this person a diamond would be rare, since there is only a small amount of diamonds in the world. Others perceive rarity in the difficulty of obtaining a product. Such a person would not perceive diamonds as rare if he worked in diamonds because they would be easy to obtain, but would perceive as rare an antique Persian rug that took him years to acquire.

If you see that luxury consumers are less interested in certain items that are generally perceived as rare, that does not mean they are not interested in rarity. It just means that those items do not satisfy their definition of rarity. Rarity is not a European myth, although it is very old. Searching for rarity is based on a psychological need that is embedded in human nature and it is certainly still a part of luxury consumption.


Once we understand rarity, we can critique Kay’s claim that customers are concerned with “personality…over the notion of rarity.” Personality and rarity were never competing values. People use what they perceive as rare to express their personality. One person might use an unusual, handmade dress that she searched many stores to find to express her personality, while another might invest in an expensive pair of shoes to express his personality. Both perceive the items they acquired as rare. And both use those items to express their personalities. People did not choose the value of personality over the value of rarity – the two values work hand-in-hand.


Regarding Kay’s other claims about social media –though Kay may be correct that marketing luxury through social media is effective, we have to keep in mind that selling luxury is a different matter. Proper marketing and sales require a dialogue between seller and consumer. It is easy to engage in this dialogue face-to-face but difficult when our connection with our customers is purely technological. For most luxury products, selling requires establishing a relationship with the customer through direct contact – and for this contact, social media is not quite direct or personal enough. Perhaps established brands, such as Tiffany’s and Burberry, can cash in today on the successful dialogues they created over the years. However, it is worth checking whether these dialogues become richer and spread wider. Without continued direct contact with their customers, it is hard to imagine that they would.


Luxury consumers did not change, they simply changed the way they express their interest in luxury (which is something that will always be changing!) Rarity is and will always be an aspect of luxury. If we see luxury consumers losing interest in what we think is rare, we have to question what rarity means for them. Also, though social media is widely used by consumers and may be a useful tool for marketing luxury, it cannot provide the necessary personal dialogue between seller and consumer that selling luxury needs. Only being faithful to the principles of proper luxury marketing can assure us that we will thrive in today’s luxury market.

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A digital opportunity for luxury brands

Isaac Mostovicz writes that luxury brands must increasingly consider the diverse media habits of their target market...

A new report from the Luxury Institute, a global body looking to provide a voice for the high net-worth consumer, found that wealthy individuals 35 years of age and younger are avidly consuming a wide range of new media on smartphones and tablet computers, and quickly losing the television, radio and print newspaper consumption habits of their parents.

With more Generation Y consumers watching online video (78%) than those who regularly read a printed magazine (76%) or newspaper (68%), the case for luxury brands to extend their online presence is continuing to be made.

“This is clearly a tipping point, with the rising generation of wealthy consumers consuming media in vastly different ways than anyone did just a decade ago,” Milton Pedraza, CEO, the Luxury Institute, said.

Furthermore, with 70% of respondents in possession of a smartphone, and 23% an Apple iPad, it’s clear that luxury brands need to consider their mobile marketing strategy as carefully as their broader online and social.

As I have previously discussed, online marketing and social media are certainly tools that luxury brands are beginning to explore, but this report further corroborates why engaging with consumers through digital channels can be particularly fruitful.

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Social media for luxury brands

Isaac Mostovicz writes that luxury brands will continue to explore the potential of social media in 2011...

The efforts of mid-range brands to reach consumers through social media channels are well documented. However, social media’s association with inclusivity means that ‘exclusive’ luxury brands have been slow to explore its uses, but this looks set to change.

2010 saw the luxury market experience a digital tipping point. Many brands launched e-commerce sites, some experimented with Facebook and Twitter personalities (e.g. Burberry, Gucci), while a few went even further; streaming live runway shows at New York Fashion Week and enabling consumers to interact in real time, is just one example.

The fashion industry in particularly has been quick to recognize the potential of such interaction, and has driven the emergence of ‘crowd sourcing’. This allows an engaged consumer base to determine which products should be manufactured – the ultimate empowerment of the consumer.

My prediction is that luxury brands will this year look at how to capitalize further on the instant consumer connection that social media can facilitate. However, a recent report from Gartner revealed that 70% percent of social media campaigns will actually fail in 2011, highlight

ing that brands must carefully consider their strategy before executing a campaign.

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Redefining luxury in the social media world

Isaac Mostovicz writes that luxury has become fractional in the world of social media...

Everybody knows about the digital phenomenon that is social media and how it has become massively popular during the last few years. However, some luxury brands have only recently begun to exploit this new dimension in luxury marketing. This trend in luxury brands going digital reminds me of something that was said in the American Express’ Luxury research I mentioned in my blog post:

Companies looking to embrace social media as a way to break through persuasion immunity need to be careful to not put all their resources into this one opportunity.  Four in ten (37 percent) of affluent and wealthy consumers currently use Facebook, but only 3 percent say they use Facebook as a researching or purchasing tool.  Facebook remains a mostly a social tool (and a game platform for many).

What should be taken from this is its emphasis on the social side of, well, social media. Steve Rubel on Forbes recently wrote an article asking a key question:

In an era of ubiquitous social networking–one where every online and mobile experience is enhanced by the lens of our friends–how will luxury be defined?

In today’s digital age, social media is redefining the way luxury is marketed online.  Rubel goes on to say that because of the fragmented nature of the media environment and the increasingly personalized world of social media, luxury has become fractional.

A brand that’s achieved luxury status among thirty-something moms in Los Angeles could be considered taboo by the same demographic in New York–all because of the types of social connections we keep online and how they shape our worldview.

This idea parallels with another article I found online about the power of word-of-mouth in China. While these two articles concentrate on different types of social interactions, they note the same big impact it has on brand marketing when it is properly applied to these social channels.  Going back to social media, three key points which are essential for luxury brands to successfully use social media is to make every online experience a social one, develop coveted social objects and map and tap networks. While the first and last points make sense because it stays true to the essence of social media, the second key point revolves around the old age practice of showing off what you’ve got. Only here, it is done virtually, digitally. We’ve got the same primal, luxury urges as we’ve always had, but now they have translated themselves through a more sophisticated platform.

Such an upcoming trend in digital luxury marketing is also recognised elsewhere, for example, a guest contributor on Business of Fashion discusses why luxury brands should focus on mobile web and not mobile apps. Though a complicated process (setting up multiple compatible versions of the same website), the long term effects of such an endeavour is well worth the effort and luxury brands should quickly adapt to this growing trend, otherwise they will face a similar incident like the recent article featured on PSFK- consumers found themselves disappointed when top luxury sites failed to work on the iPad.

To survive long term, luxury brands should not only take advantage of social media, but also do it correctly by marketing socially. Keeping up to date with the latest digital trends is also very important. This new digital and social media dimension only adds to the difficulties luxury brands are now dealing with in the face of a new specialised, luxury consumer.

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