Following up on my recent post about luxury companies going online, the Economist has posted an interesting article on luxury companies going online. Some companies, like Tiffany & Co., are doing quite well with their online sales, while others, like Fabergé, are taking more of a ‘wait and see’ approach. These companies say they are reluctant to put their goods for sale online because the experience isn’t the same. Says the author:

Luxury executives explain that the internet is too impersonal for their products, which need the human touch. Allowing anyone to buy online can mean a loss of cachet. Luxury firms like to dazzle customers with plush stores and sleek ads, so that they think only about beauty and not at all about price. The web, by contrast, shines a clear light on price. “That’s the last thing I want people to think about,” wails an executive from the watch industry.

Still, luxury firms are going online in greater numbers because their customers increasingly want the convenience of ordering online. I don’t think it’s impossible for luxury companies to offer a unique, exclusive experience through the online channel. It just needs to be well planned and thought out, and needs to appeal to the different ways that individuals look at the world and consume luxury. A website that appeals to a Lambda woman in one way and a Theta man in another could be quite successful.

Photo by Erin Blatzer

A recent article in the Financial Times shows that luxury retailers are failing to harness the potential of the virtual world. Many luxury brands still prove poor at offering personalised custom service online—a keystone of what makes their brand high-end instores. Are these brands underestimating how new technology and social networking tools can help build personal relationships and loyalty between visitors and the brand across global markets? A missed opportunity for global connectivity or protection of the luxury brand?

Therein lies the tension inherent in an online outlet: how do you expand your brand to mass consumers while retaining high-value buyers? For high-end luxury brands known for exclusivity, does an online presence make a brand too accessible to everyday Joe? The fear of devaluing one’s brand through a strong web presence has slowed many exclusive names from entering the virtual marketplace.

Perhaps, an understanding of the classic differences between Thetas and Lambdas could help marketers understand how new communication outlets like the web can tap into luxury consumer mindsets without losing hte personal attention expected in luxury marketing. By raising awareness of the brand online, marketers can draw in Thetas by creating a virtual community for various peer groups. On the other hand, by maintaining a high-end value of personal service and localised responsiveness, Lambdas can retain a sense of exclusive individuality through the luxury brand. In turn, the web can be embraced, rather than feared, by luxury retailers.