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Luxury world needs major interactive marketing push

After having sat through last week's Luxury Interactive 2010 conference in New York, one thing is clear: luxury brands are confusing marketing caution with brand protection.

Speaker after speaker extolled the virtues of their brands as excuses to avoid anything that resembles 21st-century marketing. Indeed, this is no time for the beleaguered luxury market to condone shrinking-violet thinking.

Here are the facts on the ground. As is evidenced by luxury retailers and numerous studies from consultancies such as BCG, U.S. consumers are trading down, mixing and matching. Tough economic conditions, coupled with luxury brands? diluting their mystique with entry-level products and outsourced manufacturing, are to blame for this developing pattern of behaviour.

At its core, luxury is all about exclusive distribution, impeccable quality and high perceived value. That said, none of this would matter if it is not communicated well to the desired target audience.

Marketing, overt or discreet, is what dials up desire within consumers for expensive products they don?t need but want. And marketing only works when it is communicated in the language known to the consumer.

Today?s consumer is used to marketing messages in mediums such as direct mail, display advertising in print and online, billboards, television, radio, social media, search engines, in-store collateral, email, mobile and wired Internet, and SMS and applications on mobile.

Yet, most luxury brands are stuck in circa 1995. They have cut back on mail and catalogs, maintained their print presence to a large extent and ramped up email. It?s taken a long time for them to embrace email after overriding concerns that ?it doesn?t fit with our brand image.?

That same brand-misfit argument is now being held against ecommerce and mobile commerce Web sites and SMS.

If luxury brands want to be relevant to their upscale and scaling-up audiences they need to have a user-friendly Web site that allows visitors to shop and search for items ? even, goodness gracious, buy. Skip that dazzling Flash display on the homepage ? it simply hurts search engine spider-crawling of pages. 

Louis Vuitton Moet Hennessy was one of the early luxury conglomerates that understood the importance of ecommerce. At launch, LVMH?s site was heralded and held up as a sterling example of how luxury brands can still maintain their aura without the taint of easy availability.

Alas, LVMH did not continue to support eLuxury and shuttered the site just when the promise of ecommerce was taking root.

Thankfully, LVMH has maintained its email presence and continues to send out marvellous newsletters such as NOW that showcase the best of fashion and luxury.

Cartier, too, has continued to invest online, albeit its site needs major work. Tiffany, by contrast, is more user-friendly and allows for easy search across product categories.

Driving sites
The rich do visit Web sites, you know. And they do read emails. And they do check their smartphones ? OK, some are loyal to their Vertu models ? for emails, applications, directions, sites and SMS texts.

So that?s why luxury brands have no excuse not to develop mobile-friendly Web sites that can allow searching for product and store addresses and hours along with the ability to call directly from the site for an appointment. The next step would be transaction-capability, but the first foot forward would be ecommerce before mobile commerce.

Also, luxury brands should quickly snap up common short codes to build up a mobile component to their relationship marketing via mail, online and personal telephone calls.

As luxury analyst and Luxury Institute CEO Milton Pedraza repeatedly emphasizes, CRM is the key to successful sales of high-end products.

Range Rover should take credit for incorporating a keyword and short code at the bottom of some of its print ads for new off-roader models. The call to action is intended to encourage SMS opt-in for test drives of the latest Range Rover at nearby dealers.

While not every luxury brand can adopt SMS, most can certainly maintain a ubiquitous interactive presence across the mobile and wired Internet. There?s no question of dilution of equity there, but simply offering consumers a seamless shopping experience across channels.

Talk is not cheap
The typical upscale luxury customer is aging. Mail and print ads might work for them. Not for the luxury customers of tomorrow: twenty-something bankers or Silicon Valley types or even Riviera-sort heirs ? their language is social media, email, Web, SMS, applications.

There will always be room for luxury brands as long as there?s capitalism and the desire to differentiate from others through possessions of limited editions and experiences. Plus, expect pent-up demand for leather and bauble from post-recession austerity.

Some of the most enduring luxury brands seen on Madison and Fifth Avenues in New York, Rue du Faubourg Saint-Honoré and Avenue des Champs-Elysées in Paris and Bond Street and Savile Row in London have survived two World Wars, the Great Depression and the Great Recession.

Many of these survivors shifted production from France, Britain, Italy, Switzerland and the United States to lower-wage countries such as China, India and Southeast Asia. Interestingly, that manufacturing issue is rarely brought up when marketing in contemporary channels is discussed.

Let?s get this clear: the well-to-do use the Internet, email and text across computers and mobile. They click on online and mobile ads and rely on search engines, social media, Web sites and applications to guide them to products, services and destinations.

Put simply, why should luxury brands excuse themselves from where their customers expect to see them? There?s a difference between mystique and mystery.

Final Take
Mickey Alam Khan, editor in chief of Mobile Marketer and Mobile Commerce Daily, New York.