Tuesday, June 25, 2013

Can the Real Value of Digital Luxury be Measured?

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Digital Media is undoubtedly re-writing the rules of luxury businesses and ushering in a new luxury world with a different set of norms and practices. It is no longer an illusion that the advent of digital media has transformed human behaviour and consumer habits. The mass adoption of the web, social media, mobile media and interactive platforms has re-defined the very meaning of value creation for luxury companies. People and data have emerged as the currency of the web; and fans and followers have been transformed into brand ambassadors.

But is this accelerated transformation an advantage for luxury? Is the value created by digital media for luxury real or perceived? Are luxury brands rightly poised to fully adopt digital innovation and its best practices? If so, which metrics should luxury companies adopt for the measurement of the impact of digital media on the top line and bottom line across the value chain? How can the digital value of a luxury brand be assessed? What transferable traits and value does the wider digital economy hold for luxury? How can these be channelled through the feasible strategies, tools and systems suitable for luxury? Is there such a thing as the digital luxury economy? 

The recently held Club e-Luxe International Summit which took place on 12th June 2013 at the Hotel Le Meurice in Paris provided answers to these ongoing questions. During this stimulating full-day event, luxury and digital experts brought insightful analysis and in-depth assessment of digital luxury across its full spectrum of web, social, mobile, multi-media, virtual reality and others. 

The highly successful Club e-Luxe International Summit hosted by Luxe Corp brought together a team of renowned experts from the digital, technology and luxury worlds to address diverse topics related to the event’s theme of “The Web Economy”. This theme led to presentations, live demos, debates and workshops around the topics of Social Economy, Mobile Economy, E-Services, Digital Privacy, E-Commerce, Digital Luxury in Asia, e-Fraud and much more.

The event began with a presentation by Uché Okonkwo, LUXE CORP’s Executive Director & Founder. She presented an overview of the “The Digital Scorecard Report”, the first integrated digital luxury report that assesses the digital strategies, initiatives and executions of 100 luxury brands' across multiple categories. The Presentation rationalized the need for such a research report by highlighting that although the luxury industry has taken impressive strides in the area of digital media in the last few years, there is currently no reference or means of concretely measuring the qualitative and quantitative value that digital media contributes to a luxury company’s market value. She particularly highlighted the digital success story of Dior which is widely viewed as one of the luxury brands with the most integrated and advanced digital practice, from the perspective of content development and diffusion. According to her, Dior’s website is one of the few in the sector that has identified the “content as a product” and has presented this accordingly throughout the entire digital platform.

Some of the key points of the presentation are the following.
  • The digital luxury scope assessed include: web, social, mobile, interactive, artificial intelligence, e-commerce, virtual reality, e-services, cyber-presence, cyber-experiences, innovation, gaming and e-consumers.
  • The categories assessed are fashion, leather goods, jewellery, timepieces, beauty & fragrance, wines and spirits, hotels and spas, retailers and automobile.
  • Some best practice examples with full 100% digital integration are Dior, Louis Vuitton, MontBlanc, Chanel, Marc Jacobs and Bvlgari.
  • Some best practice examples with 90% digital integration are Dunhill, Lanvin, Calvin Klein and Burberry.
  • The most watched video in the luxury fashion domain wasn’t created by a luxury fashion brand but by a blogger.

The second presentation at the 2013 Club e-Luxe International Summit was made by Joerg Zuber, Managing and Creative Director of OPIUM EFFECT, the global multi-media, design and branding agency on the topic: Digital Communications as the Lifeline of Luxury Today – How Multi-Media Impacts the Value of Luxury Brands. This presentation focused on displaying the evolution of Interactive Media and Branded Content in the luxury sector and how this is translating to value creation.

Joerg started off by reminding the audience that the digital revolution has changed and will continue to change the way people interact with brands. He also reminded the audience that the lifecycle of innovation is getting shorter, which means that digital integration should move at a faster pace. He however emphasized that digital media shouldn’t replace the physical world bt should be a complement to physical experiences. He further showed examples of interactive media experiences for brands such as BMW, Bvlgari, Hermes and Triumph, which successfully merged the physical with the virtual to produce high-impact experiences. He also emphasized that digital media enables e-stores to merchandize and personalize experiences to perfection much more than what is obtainable in the physical world. The audience was also reminded that digital media can push luxury brands to become better in marketing communications and create stronger customer connection and loyalty.

The main highlights of the presentation are the following:

  • Luxury has moved from couture to conversation — and there is no returning.
  • Digital media has put people back in control. In an anarchic, chaotic universe, we can tailor our own ‘cyber zones’ that are more pleasurable than the economic fallout that surrounds us.
  • Digital media means brands have nowhere to hide. The internet cannot be ignored.
  • Digital media gives luxury brands the power to do magic.
  • When people shop online they can create their own cyberspace through sound and other powerful experiences.
The third presentation was made by Christopher Rowlison, Vice President of Corporate Development of Wirestone and CEO of Wirestone Europe on the topic: “The Interactive Mobile Economy – Where Device meets Content & Customization”.
Christopher started off by sharing illustrations of the great evolution in Mobile from 2005 to 2013 with highlights focusing on the fast growth rate of the smart phone adoption, the expansion of the digital eco-system featuring smart phone, tablets, computers and other innovative devices such as the revolutionary Vantage Point Multi-Touch Screen. He went ahead to present the Vantage Point and demonstrate how this unique multi-media deice can be exploited by luxury brands to convey interactive and immersive digital experiences in several contexts. The presentation was supported by a demo and clear examples of Wirestone projects from within and outside of the luxury industry such as Cartier and Michael Jordan for Nike.

Some of the key points of the presentation are the following:
  • Change (through digital media) means opportunity (through stronger brand experiences).
  • Luxury brands can maximize client experiences and emotional brand connection using immersive interactive technologies.
  • Personalization happens when companies know the consumer well and this can be enabled by technologies.
  • The Vantage Point brings a powerful interactive experience with branded content, videos, applications and live web feeds on a giant diagonal touch surface.
  • The Vantage Point can be used in multiple contexts including in-store retail, product launches and presentations, fashion shows, exhibitions and other forms of events.
  • The Vantage Point can be applied to all luxury categories as it is image and motion-picture driven.
  • The future belongs to the brands that understand that good enough is not enough for digital luxury; and that strive to adopt solid mobile strategies; as well as invest in personalization.

The fourth presentation was made by Ivana Marsic, Founder & CEO of MYRIO on the topic: “Vitural Reality Value for Luxury – From shopping carts to shopping windows & shopping bags”.
The presentation focused on MYRIO’s solutions which include innovative shopping solutions for
in-store, store windows, web and mobile, to maximize sales for retailers while creating a new improved shopping experience. Ivana presented the latest innovations that are designed to enhance the in-store experience for luxury brands through merging the physical and virtual worlds by offering a personal digital shopping assistant through a combination of in-store apps on tablets, touchscreens, mobile screens and interactive windows. Ivana Marsic supported her presentation with live demos of various applications.
Some of the key points of the presentation are the following.
  • Store experience is the most crucial point for luxury shoppers irrespective of the product category.
  • Recent research indicates that people spend 10% more on average per month when they have consistent positive shopping experiences.
  • Customers who enter the fitting room are 3 times more ready to make purchases than those who are just browsing the store. Therefore the fitting room experience is one of the final factors that convinces them to purchase the product.
  • In fitting rooms, shoppers feel alone and they experience a lack of service and a limited involvement of sales personnel. The fitting room is the most important conversion area but the least served!
  • The MYRIO solution applications enable brands to track client preferences, which enables personalisation of services and offerings.
  • The MYRIO applications are also for both the sales personnel and end customers.

Julian Peh, Group Founder and CEO of WHITE WAVE MEDIA GROUP was the fifth speaker at the 2013 Club e-Luxe International Summit. White Wave Media Group is Asia’s first integrated luxury media group and the topic of Julian Peh’s presentation was: “The Digital Luxury Explosion In China – Insights into what China and Asia can offer European Luxury”.
Julian started off by describing the current digital luxury context in China focusing on the web, social media and mobile media platforms. He provided insights on the psychology, interests, attitudes and expectations of Chinese web users in their daily life. He also analysed the current digital trends and shared several application examples for web, mobile, social and e-commerce. He further provided a set of strategic and operational recommendations for digital adoption aimed at luxury brands already present in China or those seeking to enter the Chinese market.
The main highlights of the presentation are the following.
  • We are currently in the "attention media" era. Every brand is fighting for the attention of the same people.
  • The Chinese are extremely social in their online habits. Social media is playing a major role in the Chinese digital evolution.
  • 521 million web users in China which is more than the entire population of USA.
  • 75% of the internet access in China is via mobile phone.
  • 91% of the Chinese web users have been on social media websites and only 9% of web users are not active on social platforms.
  • The problem with digital media in China is that there are so many different statistics with big numbers and few are credible.
  • Chinese web users don't trust anyone apart from people they know or others know in the social media space.
  • China’s searching engine Baidu, has close to 80% of all searches made on the web in China. The company has a the stance of "No Money, No Honey”.
  • Copyright issues are a major challenge for media companies and content producers in China.

The sixth presentation was given by Kate Barnett, the Digital Director of THE MAN REPELLER. The topic of Kate Barnett’s presentation was: “The Social Economy & The Currency of the Web – How Luxury Brands Can Monetize & Enhance their Brand Value through Social Media ”. Kate started with a general view of social media’s effect on shareholder value. She emphasized the importance of relationships with customers, especially through social media. Kate she also analyzed the presence of luxury brands in social media.

The main highlights of the presentation are the following.

  • Honesty and Transparency is ever more important in the context of integrating a luxury brand’s message in the social media context, such as collaborations with blogs and bloggers.
  • Luxury brands must maintain control and partnership between blogs and readers. There should be clarity and no tricks.
  • The strongest anecdotal evidence for the power of authenticity in social media is the influence of blogs.
  • Social media is a community not a sales channel. Luxury brands must keep this context in mind and make use of it.
  • Fashion brands replied to only 6% of followers’ posts on their Facebook pages. Jewelry and watch brands replied to 21% of followers’ posts.
  • Engaging content extends reach and authentic interactions build sustained loyalty.

A Roundtable Panel Debate session was held on the topic “The Social Economy & The Currency of the Web – How Luxury Brands Can Monetize & Enhance their Brand Value through Social Media”, and featured Rohan Dreusker of STYLITICS, Helene Leblanc of THE LUXE CHRONICLES, Kate Barnett of THE MAN REPELLER and Joerg Zuber of OPIUM EFFECT . The session was moderated by Uche Okonkwo of LUXE CORP.
The session provided insights and in-depth analysis on the topic of the evolution of social media particularly from the perspectives of blogs and blogging, social media extensions like styling and s-commerce and data privacy and value. Each member of the panel gave their views on how social media is a key value generator for luxury companies, referring to their areas of expertise.

The round table session provided insights and in-depth analysis on the influence of social media on luxury brands; and the tangible and intangible values of social media for luxury brands . Each member of the panel gave his / her views on the different questions that were raised and the opposing views were debated and analyzed. Some of the issues discussed centered on the current definition of blogs, the current role of bloggers, the value and risks of social media and the extent to which luxury brands should go in collaborating with social media platforms and bloggers. The rise of annex social platforms linked to shopping and styling was also analyzed and various recommendations were made to luxury brands.

Other key points raised during this interactive session include the following.
  • The definition of blogs is changing from independent journals to full-fledged media companies. Bloggers are moving from citizen journalists to business people and media moguls. This is not very positive for the luxury sector as the independent opinion of bloggers is now questionable.
  • Most bloggers are extending their offerings to e-commerce and styling. This is perceived as a natural evolution in the consolidation of the blogging world.
  • The major influencers of fashion and lifestyle are no longer only celebrities and models but now also bloggers and fashion stylists.
  • It is imperative for bloggers to be transparent about their partnerships with luxury brands. Luxury brands must control their partnerships with bloggers and execute these in a tactful manner.
  • Consumers upload everything for personalization and are not conscious about the value of personal data and future implications.
  • Data is currently the currency of the web. In the future it will most likely become the luxury of the web as it will become very expensive for those giving it away to re-acquire.
  • Stylitics brings a new extension to social media as the world's largest e-closet platform. It is a major window into consumers’ clothing behavior online and offline.
  • Since 1 in 4 luxury customers are 'new comers', it is essential to educate them.

Following the series of enlightening presentations and DEMOs by an inspiring line-up of speakers, Luxe Corp took the audience into its traditional Spotlights and Highlights sessions which featured a major Raffle Draw during which a lucky participant won the highly coveted HP Envy X2 Laptop-Tablet, the world’s foremost laptop that effortlessly transforms into a tablet.

In addition each participant received a Gift Bag containing a blend of luxury teas from Luxe Corp’s corporate partner for the event KUSMI TEA; as well as a gift from Luxe Corp’s LIVING EMOTIONS corporate gift series.

Also in keeping with Luxe Corp’s now renowned tradition, the participants were able to interact with the impressive digital installations at the Digital Suite, which featured the impressive Vantage Point Multi-Touch Giant Screen by HP, the 3D Interactive Media Display by Arscenique and the Digital Sensory Pod by Noise I Nose.

The participants were also treated to a gastronomic three-course lunch meal by the famed Michelin-star chefs of Hotel Le Meurice, Paris.

The Seventh Presentation was made by Dr Stephen Topliss, Director of THREATMETRIX, the leading provider of digital solutions for online fraud prevention and counterfeiting. The topic of his presentation was: “Fighting Fraud Online”.
He started off by introducing the company ThreatMetrix, the proprietor of the Cybercrime Protection Platform, considered to be the leading online payment fraud prevention solution that can reduce fraud losses and charge backs while minimizing manual reviews. Dr Topliss took the audience through the solutions key technologies followed by numerous real life examples, notably the solution called the Device Tracking Across IP Addresses. He further provided key recommendations for luxury brands involved in e-commerce for both the prevention and detection of fraud online.

The main highlights of the presentation are the following.
  • Everybody is equal when in front of the screen.
  • There’s no current automated anti-fraud system.
  • Existing systems are failing because of the increasing fraud levels and chargebacks.
  • Fraudsters are methodical; they hide their true locations by using cloud, VPNs or public wifi.
  • The problem of fraud is rampant in luxury because of luxury companies’ limited experience in e-commerce, non-standard customer profile and other non-consolidated aspects of their online business.
  •  Emails are an open letter to the public. They are not entirely private.
  • Avoiding putting one’s last name in their email address reduces the risk of fraud and hacking.
  • Luxury brands need to improve the assessment of customer profiles for ecommerce registration and payments.
  • Luxury brands need to gather an extra layer of information to stop fraud threats before they occur.

Guillaume Rostand, Marketing Director of SPLENDIA was the eighth and final speaker at the 2013 Club e-Luxe International Summit. The topic of his presentation was: “The E-Service Economy & How Digital Media has changed the Concept of Luxury”.
Guillaume gave insights and direction into the rapidly evolving domain of luxury e-services and how luxury brands across multiple categories can draw benchmarks from the digital travel services segment. By emphasizing the Importance of “Give More” to customers, he demonstrated how Splendia communicates best with their customers, giving them the feeling of belonging and being guided.

The main highlights of the presentation are the following.
  • Online businesses have moved from single to multiple platforms.
  • Trust is the key to digital media, ecommerce, luxury industry, thus, trust is the key to online luxury business.
  • Images are not enough, internally created quality content are needed.
  • Driving emotion is the only way to create and enhance a luxury brand.
  • Luxury brands need to build a solid online ecosystem of offerings, partners & content.
  • Online businesses have moved from single to multiple platforms
  • Strong online experience is equal to emotions.
  • Digital media is fast, you only have 3 seconds to catch the eye with images.
  • In digital media images are not enough, brands need relevant content, internally created qualitative content.
  • Trust is the key to digital media, ecommerce, luxury industry, thus, trust is the key to online luxury business.

The Club e-Luxe International Summit ended with a champagne cocktail reception where guests were able to network, interact with the technologies in the digital suite and carry on passionate discussions on different aspects of digital luxury.
The next Club e-Luxe event will be the Club e-Luxe Breakfast Seminar to be held on Thursday 9th January 2014 at the Hotel Le Meurice, Paris. The event will focus on the theme of Virtual Reality for Luxury - Striking a Balance Between High-Tech and High-Touch. As is now the tradition, the event will be fully curated by LUXE CORP and will gather renowned digital experts to share the most relevant digital tools and innovations with luxury executives, as well as offer insight and solutions for the most challenging related digital issues facing the industry.

To read the full live Twitter coverage of the event, see #eluxe on Twitter or simply follow Luxe Corp on twitter at www.twitter.com/Luxecorp

To stay connected with Club e-Luxe, visit the Luxe Corp website: www.luxe-corp.com

Luxe Corp wishes thank the following partner companies for their support in making the Club e-Luxe International Summit a success.

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