Impact of Social Media Over Luxury Brands

Impact
of Social
Media over Luxury
Brands

Author: Catalin Ancuta

Student number: 6371892
Supervisor: Antoon Meulemans,
Drs. Ing
Second Supervisor: Dr. J.H.J.P. Tettero

Impact of Social Media over Luxury Brands
Acknowledgements:
First of all, I would like to thank my family for the tremendous support in the last
past two years. It was a rough period considering that I had to divide the time
between working and studying. Nevertheless, in the end I did it, and their help
made everything feel easier.
Secondly, I would like to thank all my friends that pushed me during this entire
process, but as well my girlfriend that was a huge support.
Moreover, I would like to thank Drs. Ing. Antoon Meulemans for according me the
opportunity to end my master studies.
Catalin Ancuta
Amsterdam 2012
Abstract:
Luxury is neither a product, an object, a service nor is it a concept or lifestyle. It is an identity, a

philosophy and a culture (Okonkwo, 2007). As a business sector and management discipline,
these characteristics signify the presence of challenges, in the integration of luxury branding
within the Internet and digital environment and the requirements of intricate strategies to
overcome them. Lots of publications mention that the compatibility between luxury and internet
is not strong or suitable, others that the Internet is just another channel of communication that
will bring too much exposure in the luxury industry.
The purpose of this paper is to enlighten the impact of using a marketing tool as social media in
the prestigious and demanding industry of luxury brands. For doing this, first the paper suggests
understanding what influence can social media bring over the luxury brand image; second it is
trying to see if social media is able to replicate the luxury boutiques through its online medias,
but as well presents a study case of a company present in the luxury market that is already using
SM as a marketing tool. In the end, with the help of luxury consumers and the owner plus
managers of the presented company, a small guideline is created with the scope to help the
managers of other luxury companies to understand how Social Media has to be approached.
Keywords: Social Media, luxury brands, brand image, luxury boutiques, study case,
guideline;
Table of Contents
Introduction: .......................................................................................................... 6
Description of the topic ............................................................................................................... 6
Gap in the literature and research problem ................................................................................. 8
Theoretical and practical relevance ............................................................................................. 9
Research question...................................................................................................................... 10
Brief outline of the research ...................................................................................................... 10
Literature Review: ............................................................................................... 11
Social Media:............................................................................................................................. 11
What is Social Media? ........................................................................................................................ 11
Are Social Media and Social News the same? .................................................................................... 11
Social Media Websites ........................................................................................................................ 11
How Social Media Works.................................................................................................................... 19
Social Media as a marketing tool ....................................................................................................... 22
The Luxury Industry.................................................................................................................. 23
What is luxury? What it constitutes the luxury industry? ................................................................... 24
Luxury brands ..................................................................................................................................... 26
Luxury branding on the internet ......................................................................................................... 29
Research Question ..................................................................................................................... 32
Methodology ......................................................................................................... 36
Research design ......................................................................................................................... 36
Data collection........................................................................................................................... 37
Analysis ................................................................................................................. 40
Social Media.............................................................................................................................. 40
Luxury brands ........................................................................................................................... 42
Impact of Social Media over luxury brands .............................................................................. 44
Social Media - marketing tool in the luxury industry ......................................................................... 44
Main considerations for using SM in the luxury industry ................................................................... 45
Flag-ship store experience re-plication through e-boutiques: ........................................................... 47
De Oost Bespoke Tailoring BV ................................................................................................ 49
About De Oost ..................................................................................................................................... 49
De Oosts way of communicating with consumers before implementing Social Media ..................... 50
Why Social Media? ............................................................................................................................. 51
Main changes after implementing Social Media ................................................................................. 51
Future implications and advices for managers that want to implement SM in their marketing strategy
............................................................................................................................................................ 52
Discussion and other findings ............................................................................. 54

Other findings............................................................................................................................ 59
Conclusions ........................................................................................................... 62
Limitations and future research ................................................................................................. 63
References ............................................................................................................. 64
Appendix ............................................................................................................... 69
Introduction:
Description of the topic
Social Computing is not a fad. Nor is it something that will pass you on your company by.
Gradually, social computing will impact almost every role, at every kind of company, in all parts
of the world (Mayfield, 2008). Social Media cannot be ignored anymore, it is part of our life and
it is influencing people all around the world on daily basic tasks. As well it is a strong tool that is
uniting users all around the world.
The Euromonitor report regarding the Top 10 Consumer Trends of 2011 is putting the online
world first on the ranking. From their point of view consumers are reaching out to higher-end
products, greener consumption if the price is right and experience-based consumption while
considering purchases more. Brands need to tap into the on and offline cultural zeitgeist to best
connect with their existing and potential consumers.
The following graph is presenting the situation of Internet Users and Internet Retailing by region
in the period 2010 2011:
% growth (year-on-year)
Figure 1: Annual real growth of Internet Retailing and Internet Users by region: 2010-2011
Source 1: Euromonitor Report. Top 10 consumer trends for 2011
As it can be seen in the graph, Asia Pacifc and Latin America are the areas with the biggest
number of internet users, but as well a high percent of internet retailing usage. The emerging
countries seem to be the most attractive markets for companies that want to implement online
strategies in their portfolio.
Moving on from the statistics regarding the online world to a specific industry such as the luxury
industry, it can be seen that in the last years the biggest growth of luxury goods, has been as well
in the emerging markets. This is presented in the following graph that shows the luxury goods
market in term of real growth post recession between 2010 2011:
% growth (year-on-year)
Figure 2: Luxury Goods markets in terms of real growth - post recession: 2010-2011
Source 2: Euromonitor Report. Top 10 consumer trends for 2011
The motivation given by the above presented facts, should give the luxury managers a lot to
think when considering their next marketing strategies, marketing channels and approaches.
Luxury brands are pushed to adjust to the new demands created by the emerging markets. The
buying power has been transferred in these regions, whereby the consumers in the developing
regions are making purchases across the entire portfolio of distribution channels, here it can be
included the outlet stores, flag-ship stores. At this point, the luxury industry is facing one of its
biggest questions: How can they reach the consumers in the new markets, and with what new
channels? But at the same time considering to keep their most important values that are
uniqueness and exclusivity.
The economic downturn had a big impact in the sales of the luxury goods, but slowly the luxury
industry is recovering, even if obvious marks can be observed. From this reason, the focus of the
luxury industry has moved more on the Asian markets and on the emerging markets in general,
attracting as well a younger type of consumers as main targets. Moreover, it is considered that
aspirational luxury is out, while high-end classics, which continue to maintain their worth, are
pop.
Luxury goods are slowly beginning to move on the online environment, but they are still afraid
that this could harm their brand image. Net-a-Porter is one of the examples that are trying to lead
the way, and to make the luxury industry understand that the online environment is a viable
solution. Considering that one of the biggest demands of the consumers is the accessibility
factor, the managers of luxury companies should study and understand the features of the online
world so they could adapt them to their strategy and widen their approaches towards the
availability of new marketing tools.
Internet usage has increased extremely fast in the past fifteen years, and because of this,
companies found new possibilities for promoting their products and services. The purpose of this
research will serve the luxury industry. Why to choose or not to choose online services for
luxury brands, what effects do Social Media could have over your luxury brands and is Social
Media a solution for bringing the luxury industry closer to the consumer?
Gap in the literature and research problem
Researching the current academic literature it can be observed that the topics of Social Media,
but as well Luxury Brands are well discussed and debated through the help of in-depth
researches.
What brought up the curiosity of the author towards the topic of the Impact of Social Media over
Luxury Brands was the fact that no other literature focused on it before. Many blog writers and
non-academic researches can be found that are debating around this topic, but nothing concrete
that is first explaining the world of Social Media, then moving on to the Luxury Industry and
then trying to understand how SM can influence the world of luxury in a concrete and well-
structured paper. Still, during the last past years, many authors are debating the usage, benefits
and consequences of implementing the Internet as a strategy in the Luxury Industry, but nothing
focused only on the Social Media.
Observing a gap in the literature, the author realized that a research entitled Impact of Social
Media over the Luxury Brands would bring a plus in academic purposes.
The bases of this research are the papers done by Okonkwo(2009) and the Macmillan (2009)
study who are sustaining the idea of using the Internet as part of the marketing strategy in a
luxury company. The core and scope of Macmillans paper is to examine a business discipline,
particularly in the dimension of branding within the digital context (Macmillan, 2009). As a
difference, this paper will have a greater focus on Social Media and not on all services provided
by the Internet. At the same time, Okonkwo (2009) was ending his research by presenting the
future challenge of the luxury industry being the Social Media world. As a final statement in its
research he was mentioning that the social media and the blogosphere have put the phrase The
consumer is king permanently in marketing vocabulary.
Theoretical and practical relevance
Choosing the topic was not arbitrary. During the last year of his studies, the author had the
opportunity to work as a Social Media Intern for a small Dutch Bespoke Tailoring company that
is active in the luxury industry. The name of the company is De Oost Bespoke Tailoring BV,
Garment Consultancy company, like they like to be introduced, a tailoring that crafts all kinds of
garments for professionals and connoisseurs1. There, the author had the opportunity to bring
communication at the next level by creating a better channel for presenting the products and
services of the company to the actual customers but as well for approaching new customers and
markets.
During the research, the work at De Oost will be introduced as a study case. The study case will
be conducted after interviewing the owner and managers of De Oost, for a better understanding
of the marketing strategy of the company before implementing Social Media, what were the
ideas of choosing SM, what are the main changes and implications after using SM in the
1
from the French connoisseur that means a person that has a great deal of knowledge about fine arts or an expert judge in matters of taste
company for 1 year and half, but at the same time a small guideline for luxury managers to
follow when approaching SM as a marketing strategy and tool in a specific luxury company.
Research question
The research proposes and examines a topic not yet discussed by the current academic literature,
entitled The Impact of Social Media over Luxury Brands. At a first glimpse, Social Media cannot
be perceived as an appropriate marketing tool in the Luxury Industry. Many researches before
argued about the usage of Internet with all its features as not appropriate in the luxury industry,
but years are passing, technologies are improving and the mentality of the consumers are
adapting to modern trends. The following research will try to understand if Social Media can be
accepted or not as a marketing strategy tool in the luxury universe by understanding if and how
SM affects the luxury brand image and if SM has the technology to replicate the luxury
boutiques in the online world.
Therefore, to summarize the above statement the research question is stated:
What influence/impact does Social Media have over the luxury brands?
Brief outline of the research
The research consists of six chapters in total. The following chapter presents the main literature
regarding the definition of the Social Media and the Luxury Industry and continuous with
investigations about how SM can be a marketing tool and how luxury branding is done over the
internet. Based on the just presented literature review, the research question of the paper plus the
sub-questions and conceptual model are presented and discussed. Continuing, chapter three
presents the motivation for choosing the methodology followed by the research design and the
type of data collection.
Subsequently, chapter four gives the complete analysis complemented with compelling quotes
from interviews and the small study case of De Oost Bespoke Tailoring. After, in chapter five,
the results are discussed and additional findings are presented. The research ends by drawing the
main conclusions, but as well its limitations, suggesting additional future investigations.
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Literature Review:
Social Media:
What is Social Media?
Going to the routes of each word, social media can be defined as an instrument that helps to
communicate and interact. Media is a tool used for communication, like TV, newspaper, radio
etc. But social media is not only about communication, it includes as well interaction between
users. The most important characteristics that SM has are:
o Participation everybody is continuously involved in this contribution process to share

news, to give feedback
o Openness the barriers are small; the content is reachable and opened to discuss it
o Conversation the dialog is really important; you offer information but as well receive
feedback or/and other information
o Community common interests, hobbies, passions are creating groups where you can
share all these
o Connectedness permanent connection, links between people, resources, life styles etc.
Are Social Media and Social News the same?
Even if it sounds as an easy question, usually these two terms are easily confused. One of the
reasons is that a social news site is as well a social media because it is part of the broader
category. But it is incorrect to say that social media is the same as social news, social news being
just an element of social media.
Social Media Websites
The SM Websites are divided on more categories regarding their different types of users. The
division is made as it follows:
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Social Networks
Social networks sites are providing the new social and economic change of the world. The
industrial age is slowly taken over by the new era, the Social Networks Era. It can be seen that
technology is changing rapidly and at the same time changing what people consider normal daily
life. Social networks and social media are seen as the darlings of technology, business and media
managing to transform our lives and our very nature.
A different reason that is driving the change is the inter-connectedness function of the online
social networks. If you look how information and media was defined until the rise of Social
Media it can be clearly seen that everything was carefully categorized. Information was found in
books, magazines, articles; on CDs it could had be found videos, music, photos, movies; the
phone was used only for talking etc. Social Network websites are now offering all these features
online, accessible digitally via computer or mobile phone. Below an overview of the inter-
connectedness function is described using a simple chart:
Figure 3: The Inter-Connected Nature of Social Media
Source 3: Adapted from the report The global rise of social networks: brave new world or the same old thing (2010)
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As the name says it, social networks sites are the websites were users interact between each other
by sharing different content, news. These platforms allow you to generate a web base profile and
connect with your friends, or any other users registered in their database. One of the famous and
the fast growing Social Network website is Facebook, website where the possibilities to build a
wide network of friends, relationships, create different groups of interest, share news, audio and
video content, debate on diverse products and services, create company profiles, brand profiles
are offered. Facebook is expanding its limits, and is far away from the typical social network
websites that are focused on certain target groups, like students, professional categories, athletes
etc.
Figure 4: Social Networks Sites Landscape
Source 4: Social Media Landscape 2012. www.FredCavazza.net
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Social Networks Overview
There are over 200 worldwide known SN websites. The total number of copy-websites is greater
than 200 and it can be unidentified do to the fact that they are created daily all over the world,
and the numbers are increasing substantially.
A part of them are presented in the table below:
Table 1: Social Network Websites
Source 5: Data gathered online
1. Facebook The Game Changer
Facebook is the most popular social network website in the world. It was launched in 2004. The
entire history of how Marck Zuckerber, the creator of Facebook, how he came up with this
strong business idea is already worldwide known.
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Many words cannot be said about this platform, considering that Facebook is part of the daily
life of the majority population of this world.
2. Twitter The SMS of the Internet
Twitter is ranked the 2nd largest SN website by monthly unique visitors. Twitter is considered a
real-time information network that connects the people to the latest stories, news, ideas,
opinions and everything that makes part of the daily life. It was created and launched in 2006 by
Jack Dorsey.
The way of how Twitter works is by simply sending tweets on your profile. Tweets are read text-
based posts of up to 140 characters.
Twitter is increasing its popularity among users, generating over 340 million tweets daily.
3. LinkedIn
LinkedIn is the worlds largest professional network with over 160.000.000 users and still
growing. It was created in 2002 and since it was online in 2003, it managed to gather
professionals over 200 countries.
Compared with Facebook, that became a huge success because its decision of opening up,
LinkedIn goes in the other extreme and may owe its success for its closed approach.
4. MySpace
MySpace, as any other general SN website allows users to create profiles where they can share
pictures, videos and music. The popularity of MySpace was built around its music services.
Until 2008, MySpace was the most successful SN website, until it was overcome by Facebook.
Created and launched in 2003, MySpace is now owned by Specific Media LLC and pop star
Justin Timberlake.
2
5. Google+ - Googles biggest attempt to rival Facebook
2
More about G+:http://www.youtube.com/watch?v=hC_M6PzXS9g&feature=player_embedded
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Google+ started as an invitation-only social media platform but because it had huge demands
for new accounts, G+ removed this restriction.
By launching G+, Google extended its communication platform into a unified sharing
platform. At the same time, G+ seeks to make traditionally risky online sharing more personal,
selective and the best part private.
Blogs
A blog represents a personal journal published online. It consists of various posts (entries)
published in a reverse chronologically order. For pointing a difference from normal websites,
blogs have a different set of features:
Tone the way of how blogs are written is the conversational style. Being a work of
an author or a group of authors
Topic usually blogs define what they are writing, being like a book in work in
progress
Links and trackbacks when providing extra information about a post, authors use
links to other websites as references
Comments each post has a comment section, that usually transform in a
conversation area
Subscription for keeping up with each update, it is possible to subscribe to a blog
and added to favorites. Constant updates will be received by e-mail
Taking in consideration the variety of authors, different backgrounds, age and other factors,
blogs can be dedicated to different themes:
Personal blogs
Political blogs
Business blogs
Almost Media blogs
Mainstream Media blogs
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Reading blogs
Wikis
Wikis are websites where the users can add/edit/delete content via a web browser. They serve
a good working method by creating and sharing a large document or project among a team. At
the same time a wiki can be open or private, depending on the feature chosen.
One of the most known wiki website is Wikipedia, an online encyclopedia launched in 2001.
Other examples of wiki websites are:
Wikia
Wikihow
Wikinews
Podcasts
Podcasts are subscribe-only websites where users can access audio or video files.
Internet users were already able to upload audio/video on the web and exchange it, but what
makes a podcast a powerful social media tool is the subscription feature. With this feature
building communities and even a regular audience becomes easier to do.
Another good feature is the alert; whenever a new podcast is posted on the web, subscribers
receive an automatic notification about it and how to download it to their computers.
Good places to find and start listening to podcasts are: iTunes, Podcast Alley and Yahoo!
Podcasts. Own podcasts can be created by using diverse applications (e.g. Audacity) and also
lots of tutorial guide can be found online.
Forums
Forums are one of the oldest forms of social media, even considered to exist before the actual
term of social media was introduced.
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Forums are opened discussion on different topics. User can create a thread with a certain
discussion topic free for all to intervene and add comments. In general, each forum has his
moderators that can remove posts/threads that are considered unsuitable or just simply spam. No
matter what, moderators do not lead the discussion; they can control it, but do no lead it. This is a
primary difference between forums and blogs. Blogs have owners, where forums have members.
Forums still remain really popular and worldwide used across all industries; often with
membership from a couple of hundreds to thousands.
One of the biggest forum search engine that tracks 61 million conversations threads among
40.000 forums is named Board Tracker. It is used as well as a incredible useful index tool.
Content communities
More or less the content communities can be triggered as social networks. In short describing
terms, you have to register as an user, you get a home page and you start making connections.
The difference is that they have a focus on sharing a particular type of content. For example,
Youtube, the largest video sharing content with over 100 million videos viewed by day. Here it is
possible to upload/watch videos but also to create your own channels with your favorite videos.
A second example can be Flickr, which has its base on sharing photography, being one of the
most famous services of its kind in the UK.
Micro-blogging
Micro-blogging is a tool that combines the classic blogging with instant messaging and social
networking.
The most known and worldwide leader in micro-blogging is Twitter. Other important players are
Pownce and Jaiku.
Nevertheless Twitter shades any competitor being a tremendous tool used more and more across
all countries.
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Second Life
Second life is one of the biggest online virtual worlds where you can connect with other players
and live your second life. Second life, one of the largest online game platform where you can
register, create an avatar that represents you and live a new life with other online friends.
Second life is considered a form of social media because it encourages community and social
interaction.
The numbers also look good, more than 10 million Second life user accounts have been created
and around 1.5 million residents log in to the virtual world every month.
How Social Media Works
Social Networks create definite groups of connections and this pushes the increasing rate of
social etiquettes. Access to computers and broadband internet is extensively enlarging to a
Global scale. The old rules no longer apply, but many are uncertain what the new rules might be.
A second thing would be the ownership of mobile phones that have access to internet. It can be
clearly seen that this is rather much higher than the ownership of computers. Access to the
internet and to the Social Media world is two buttons away, in this is facilitating the changes in
the consumer behavior.
The penetration and usage of Internet and Social Media is extremely high in Europe, even if they
are consistent differences between regions considering that the Latin countries are driven by the
cultural factors seeing face-to-face meeting more effective and important in business content.
Social Media can be considered one of the most fast moving domains as speaking, considering
that for SM what is up-to-date today, tomorrow can totally disappear from the landscape. In this
case, the most important for a company using such tool as SM, is to have a perfect set of
guidelines that has to be used and applied carefully.
In the following section, a set of priorities for companies who use SM is presented:
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First, as a company, you have to choose carefully. Considering the amount of Social Media
websites and applications that exist and develop every day, choosing what is most needed by
your company and industry involved, is an important fact. Time is really important for a business
and being involved in all that SM offers is practical impossible if you want your business to
survive at the same time. So, picking is the key for saving time, but also to attract the certain
target you are looking for. Nevertheless, consumers can be found in all SM features but
addressing to a definite target regarding on what type of products/services your core business is
offering can be essential.
The second step is to actually pick your application or just create one. After understanding in
which game you are involved where you can find your core target, picking how you will proceed
is again an important step. The solutions are to join an already established Social Media
application and just benefit from its popularity and the base of users. If it already exists, why not
benefit from it and use it as its best. But in some cases, using what is available is not enough and
then creating a new application or more exactly the right application is needed.
In both cases, no matter what the solution will be, one thing should be clear; Social Media is all
about involvement, participation, collaboration, sharing rather than the direct straightforward
advertising and sells. This basic idea should be perceived and put in practice.
Below, in the following table the classification of Social Media by social presence/media
richness and self-presentation/self-disclosure will be presented:
Table 2: Classification of Social Media by social presence/media richness and self-presentation/self-disclosure
Social presence/Media richness

Low Medium High
Self- High Blogs Social networking Virtual social worlds
presentation/ sites (e.g. Facebook) (e.g. Second Life)
Self- Low Collaborative Content communities Virtual game worlds
disclosure projects (e.g. (e.g. Youtube) (e.g. World of
Wikipedia) Warcraft)
Source 6: Andreas M. Kaplan, Michael Haenlein, Users of the world, unite! The challenges and opportunities of Social Media (2009)
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Ensure that you have a perfect fit between the applications you are using, between what
you advertise offline and among all your marketing tools. A practical example can be the
Digital Nomads campaign made by Dell. Dell is using SM tools like Facebook, LinkedIn but
at the same time blogs, content communities like Youtube etc. to present their entire range of
laptops and how do they enforce individuals to become a nomadic mobile workforce. Choosing
to use different channels can enhance your marketing productivity and bring your promotional
mix to the next level, but caution must be taken. Sending different messages across different
channels of communication will confuse the consumers. Being consistent is again a really
important factor.
An example of integration Online Media with Offline Media can be the example of Coca-Cola
when in June 2006 they uploaded a video with a pair of actors dropping Mentos mints into a 2-
liter bottle of Coke; the clip was a boom in the Internet, everybody started to imitate it and frenzy
was created around the experiment. Realizing the power of the video and the low cost media
coverage they started to show the video on TV during late-night television. After this strong
campaign Coca-Cola saw a measurable uplift in their sales.
Another priority for companies using SM should be the access for all approach. Even if it
sounds standard, it is known that companies usually restrict SM applications on the work PCs,
being afraid that employees would spend too much time on them instead of doing a productive
work. At the same time, they should find a middle solution and engage its employees on the SM
applications used by the company. For example, if a company uses certain blogs or Facebook
pages, the employees should be able to access them to work to interact with consumers and
create awareness, not forgetting that being social and communicative is key for SM.
Being online is not enough, creating SM profiles but not constant using them will not bring any
benefit. Being social comes with responsibilities so a company should:
Be active continuously update SM profiles, applications; discuss and interact with

consumers
Be interesting bring interesting, new and interactive topics upfront
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Be humble do not send out a feeling of superiority in front of the consumers; sometimes
they know more about SM because their countless hours spent on SM websites and
applications
Be unprofessional try to be less in a certain frame being extremely professional. Be
opened to suggestions and try to charm the consumer
Be honest be honest and respect the rule of the game. If you will do a wrong step, the
rumors will spread instantly.
Social Media maybe not be an easy task, but considering the easiness of getting in direct contact
with end-consumers by using low resources (considering that lots of SM features are free and the
costs of paid applications are not so big) and at the same time it is more efficient being able to
target an enormous crowd it makes it tool that should be considered in any industry. It can be
useful not only in large multinationals but as well in small and medium-sized companies, and
even nonprofit and governmental agencies.
Social Media as a marketing tool
As discussed in the research entitled Social media: The new hybrid element of the promotion mix
by Mangold (2009), the power of SM consists in engaging one company to communicate with
hundreds or thousands of consumers at the same time discussing products/services that they
provide. The easiness to attract such an audience is not possible with other marketing tool.
Another thing that makes the tool powerful is that consumers have access to other consumers,
that may already had the experience of using the companys products or services and can give
positive or negative reviews about their experience.
In his article, Mangold (2009) refers at the phenomenon of Social Media as consumer-generated
media, a phenomenon that describes a variety of new sources of online information that are
created, initiated, circulated and used by consumers intent on educating each other about
products, brands, services, personalities, and issues (Blackshaw & Nazzaro, 2004, p. 2).
Like mentioned before, SM has two important roles. The first role is as well the role of the
integrated marketing communications, that of communicated with consumers. For this,
companies can use platforms like Facebook, LinkedIn, Twitter, blogs, forums etc. The second
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role is that of enabling consumer-to-consumer interaction that can be seen as an extansion of

traditional word-of-month (Mangold & Faulds, 2009, p. 359). Consumers can review products
or services and transmit to other consumers their opinions and experiences. The question for
managers now becomes: How can we control this strong benefit to go in the direction that we
need?. This can be solved by using diverse methods that would influence and customize the
discussions so they would go in the direction needed. A part of them are described below:
-provide the perfect network platform customized to the needs of your targeted consumers.
Create a community of like-minded individuals with shared interest and values
-engage your customers by using diverse social media tools that would permit them to give
feedback about your products or services
-do not rely only on social media, include the traditional promotional tools and create a best fit
between them
-give lots of information, news, common points of interest about your latest discoveries, products
or future plans regarding the company
-try not to overload consumers by constantly selling your companys products and services.
Try to get in their hearts by supporting different causes of interest for them
-be creative, innovative, bring your products and services to live by creating stories around them
Social Media needs to be considered as part of the brands overall strategy. It may represent a
small part of the budget but it needs to fit with the strategy. Because the potential
conversations/interactions with customers are so direct (and potentially intimate) care needs to be
take about the tone. As in real life, it is better to be slightly more formal than necessary and
slightly more helpful than is strictly necessary.
The Luxury Industry
Luxury has been built on the foundation of certain principles that can neither be ignored nor
compromised. Luxury is perceived as a greater culture that requires deep understanding before
being translated in the business environment. This can be said because of its greater products and
23
services that are different from the daily consumer goods. It is said that in societies like the
Roman Empire, the class distinction was such an integral part of the society that the colors of
the shoes of each social class were decreed by the ruling class. In our times, this distinction
cannot be seen in such a powerful manner, but there are still strong traces of it. There is a big
need for the human being to differentiate, to show clearly their position in society. Therefore,
luxury did not change its course, focus and target. It still follows the same principals; to split the
different layers of humanity according to their social power (Okonkwo, 2009).
In this case, luxury is still an important factor in the society, being looked up by the consumer in
many ways even if the relationship between consumers and luxury is continuously changing
being influenced by new trends.
What is luxury? What it constitutes the luxury industry?
The luxury term can be defined by:
something that consists an indulgence rather than a necessity

the quality possessed by something that is excessively expensive or
wealth as evidenced by sumptuous living.
Therefore, the luxury industry can be defined by a branch of commercial enterprises that
manufacture or provide products or services which are not indispensable for the human kind.
These products or services create a clear delimitation between the social layers of the society.
An online journal called What is your definition of Luxury? by Courtney W. May debates a
variety of luxury definitions. Here, a series of definitions are presented as it follows:
Table 3: Definitions of the luxury term
Author Definition
Isadore Sharp, Luxury, by definition, means something that appears to be the best of whatever it
Founder, represents. Its world that raises peoples expectations, whether talking about
Chairman & CEO, clothing for women or locations for people to live. You pay for recognition, but
Four Seasons probably the most important thing it represents is delivery on the promise of the
Hotels & Resorts brands name.
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Bruno Frisoni, Luxury is uniqueness, exclusivity, these are luxury to me. Also, to be happy is a
Accessories luxury. You could put me in the most beautiful place, but if I am not happy, I will
Designer want to leave.
Reginald Luxury to me luxury is simply the best of the best. The finest quality and exceeded
Roberson, CEO, expectations in any are. Luxury is exquisite with supreme taste. In regards to the
Lavish Lifestyle, service that we provide, luxury is living without limits and having your time and
LLC peace to it ALL at the highest level.
Source 7: Adapted from an online journal by Courtney W. May. What is your definition of Luxury?
As seen above, the luxury term has many meanings but in the end all definitions have a common
ground, and that is recognition. Recognition seems to be the strongest asset of a luxury product
or service. How a consumer is perceived by others after purchasing such a good.
Luxury is in fashion, and the fashion is for luxury (Kapferer & Bastien, 2009, p. 1). This is a
small description about the luxury phenomenon made by Kapferer & Bastien in the book entitled
The Luxury Strategy: Break the Rules of Marketing to Build Luxury Brand. Here, the
extravaganza idea of luxury is underpinned creating from it something hard to get or available
only for the elite society.
For an overview of the luxury industry and its goods and services, the Journal of Brand
Management (2009) 16 through a Guest Editorial, presents in the article The luxury brand
strategy challenge the following framework:
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Figure 5: Luxury industry overview
Source 8: Adapted from Guest Editorial (2009). The luxury brand strategy challenge. Journal of Brand Management 16, 287 - 289.
When linked to a brand, the luxury concept is characterized by a recognizable style, strong
identity, high awareness, and enhanced emotional and symbolic associations. It evokes
uniqueness and exclusivity, and is interpreted in products through high quality, controlled
distribution and premium pricing (Guest Editorial, 2009, p. 287). All these core factors plus
the globalization, wealth-creation opportunities, new market segments, digital communications,
international travel and culture convergence, the expansion of the luxury client base and the
subsequent lowering of the entry barriers to the industry (Okonkwo, 2009) have led to the
development of $229 billion global industry in 2010, a growth of over 11 times more from $20
billion in 1985.
Luxury brands
According to Atwal and Williams (2008, p. 338) although the definition of a luxury brand is
open for debate, the natural evolution of luxury, with luxury brands first being adopted by the
affluent and wealthy before inevitably being translated and reinterpreted down to mass markets,
raises new challenges for marketing strategists. The brands have to find new ways to rich the
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consumer and to anticipate their next move by discovering different methods of serving their
needs. As well, by doing this, the relationship between the brand and consumer would be
stronger and would last more.
The way to market luxury goods has transformed in a hard process. Luxury goods do not only
transmit a high quality image, performance and authenticity but they also have to sell an
experience that is related to the lifestyle of the consumers (Atwal and Williams, 2008, p. 338).
In the existing literature there is a big gap for defining the process of development and creation
of a luxury brand and the clarification of how actually is a luxury brand defined. The previous
researches being rather limited. In Table 4, the ideas of different authors concerning the key
models of identifying the luxury brand, from their own perspective is presented in a summarized
overview (Fionda and Moore, 2008, p. 349).
Despite the fact that many of the dimensions of luxury branding are identified in the literature,
it is unclear whether and how these attributes are connected. At the same time it is not clear if
this is a final list of attributes or others should be added. So it can be concluded that there is a
dearth of research that empirically considers the dimensions (Fionda and Moore, 2008, p.
351).
A known concept closely related to the luxury brands is the rarity principle. It is known that the
exclusivity and prestige of the brand gets eroded when it is owned by many people (Dubois and
Paternault, 1995). A company is constrained, while trying to make the biggest profit as possible,
not to sell or to standardize too much. While trying to uplift the awareness level too, companies
have to bring equilibrium with high level of exposure and low level of sales (Kapferer, 1996).
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Table 4: Overview of the key models identifying the luxury fashion brand dimensions
Source 9: Adapted from The anatomy of the luxury fashion brand by Fionda and Moore (2008)
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Starting from the above statement the concept of online branding of the luxury goods will be
dissected exhaustive in the following part of the research.
Luxury branding on the internet
Using internet as part of your branding and communication strategy is not anymore a young
concept but instead it transformed in a really important factor in a business environment, going
from fast moving (e.g. Danone, Nestle, P&G) to luxury goods (e.g. Chanel, Dior). Peterson,
Sridhar and Bronnenberg (1997) comment that the Internet may provide an efficient medium for
accessing, organizing and communicating information, while Chaffey (2000) focuses on the
Internets interactivity potential and on the opportunity to build relationships with individual
consumers. Still, it should be taken in consideration that the websites, portals, forums or other
sources of Social Media differ on the quality of their information, sometimes going from really
interactive sources to just simple small talks. And at the same time, the level of customer service
provided by different companies that use online resources differs strongly (Riley and Lacroix,
2003, p. 96).
On the other hand, the same, Riley and Lacroix (2003) in the research Luxury branding on the
Internet: lost opportunity or impossibility? are mentioning that the basic rules for branding are
the same for online and offline but with just small adaptions at the executional level. Considering
this, the loop from the traditional offline marketing tools to the online tools is not so big.
Luxury goods are regarded as sensory in nature. From this statement made by Okonkwo
(2009) the idea that the human sense of smell, touch, visual and feel are extremely important
when purchasing a luxury good is debated. From here it can be understood that Internet is not
quite the most suitable channel of retailing for luxury goods. Internet and e-Retail lacks on the
human contact with the sellers and goods, but on the other hand Internet provides you with a big
variety of products, switching between websites is done fast and in a convenient way,
accessibility and availability without considering time and location and sometimes a benefit for
the consumer is the low power of sales, saying no to a computer being an easy way. Having all
these said, Okonkwo is pointing out that actually Internet and e-Retail can be successfully
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implemented in a marketing strategy for luxury goods, and this can be seen in several companies
that already adopted e-Retail and identified it as a fast growing distribution channel.
According to the previous researches, (de Chernatony, 2001; Ind and Riondino, 2001) the most
important element of the online strategy is the companys website. The Web-sites interactive
features should be sympathetic to the technology, but most important, they should have a
perfect fit in the entire brand presentation. The Web-site has to give you a luxurious feeling with
its perfect aesthetics, to communicate exclusivity and high-end quality and plus it brings an
innovative twist to the brand image.
Kapferer (2000), sees in the Internet and the entire e-commerce an opportunity but as well a
threat. The opportunity is perceived by the availability of the brand for those who do not have the
possibilities to reach a physical luxury shop, but as well for those who have a fear of entering
such temples of luxury. The threat seems to be debated to come from their culture of having
highly selective distribution and communication channels, where if using internet it would mean
to be referred by other portals, but also being pirated by those who buy merchandise on the grey
market.
After their research, Riley and Lacroix (2003) concluded that the internet is a strong
communication and information channel, but would not be an appropriate acquisition channel.
The internet was perceived as removing not only the spontaneity of shopping, but also the
pleasure of touching and feeling beautiful material and of entering their temples of luxury. At
the same time it lacks on in-store human service, thing that can hardly be replaced.
On the other hand, Okonkwo (2009), considers that luxury goods companies have this negative
opinion of using e-Retail as a distribution channel because the Internet was for a long time
perceived only for price discounted products, damaged goods and counterfeits or that the
brand image can be harmed by the high level of exposure or at the same time luxury goods
consumers would not be attracted by online purchases.
Taking in consideration the last years of progression in the luxury business segment, it can be
seen that companies like Louis Vuitton launched digital products; an example can be the
Soundwalk or Girgio Armanis virtual flagship store in the virtual world of Second Life. Step by
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step, modern technologies developed and adapted its applications to fit luxury goods strategy as
well in the online environment.
Nevertheless, luxury on the Internet is just on its early ages and it is a big opportunity for all
luxury goods and services companies to take advantage of it. For doing this it has to be taken in
consideration that Internet evolves from one day to another, innovations, new technologies and
the entire cyber space is growing in a rapid step.
A deep understanding of the challenges raised by the online channels that luxury companies face
will be presented in the following table. The table was completed with information from
Okonkwos previous researches (2004, 2005, 2007 and 2009) and from Social Media Websites3
specialized on the luxury segment.
Table 5: Challenges rose by Internet usage for luxury companies
Challenge Description
Corporate Luxury companies are not used to go through a changing process and choosing a radical change
orientation in their strategy is rather inappropriate. However, Internet brought a need of reconsidering and
re-thinking the companys strategy and practices across all business aspects. The continuously
innovative digital environment has to be treated with attention and given the appropriate place in
the corporate planning.
Unfounded Internet is simply a channel of communications, through websites and ads or of distribution
consensus through e-Commerce. This type of mentality has to change in the luxury companies where the
online world is part of their business. The internet is considered a multidimensional channel
that includes communication, branding, design, retailing, customer services, client networks,
consumer & business analysis, product development, managing logistics, supply chain and
operations. Luxury brands should analyze and understand the how to questions regarding their
relationship with their online consumers. The online media is not anymore only a medium of
information and retail, it become a virtual world where consumers engage in discussions with
each other and have the freedom to access unlimited sources of influence.
Representing The luxurious feeling and atmosphere presented in reality through flagship stores, has to be
the brand replicated in the companys website, but this is not enough. The content has to be as well relevant
essence online with a high usability and functionality, creating the webmosphere (web + atmosphere) the
through its perfect place for their consumers.
3
ASmallWorld:www.asmallworld.com
LuxeMag.com:www.luxemag.com
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own website
Cyberspace Cyberspace is more than websites; cyberspace is a virtual copy of the world that has 2D and 3D
understandings platforms, forums, blogs, communities, networks. People interact and connect continuously and
absorb huge quantities of information through all sources. Luxury brands should have an
appropriate positioning that would not harm their image.
Online It was believed that wealthy consumers would not engage in online conversation and would give
behavior of the so much importance to the online environment. But the reality is different, wealthy clients do
luxury participate in interactive discussions on platforms like A Small World or Luxe-Mag.com giving
consumers critical opinions about products and services, about own experiences influencing thousands of
other consumers. The understanding of how the online attitude of these consumers influences
their offline actions should be clearly understood analyzed.
e-Retail What to sell? All the product range or only a part. Good decision has to be taken considering
the delivery to different geographical areas.
How to sell? develop the perfect design and re-create the perfect luxury atmosphere in your
e-Boutique that would give a memorable experience to your consumers. Good examples are
Cartiers website, Viktor & Rolfs website, Hermes and others.
Social Web One of the latest challenges is the fast growing channel of Social Media. Luxury brands should
position themselves in a close connection with the Social Web. Social Web being the
phenomenon that clearly shows how Internet becomes the most important and critical marketing
medium.
Source 10: Okonkwo (2004, 2005, 2007 and 2009)
Research Question
Important international luxury brands as Versace and Prada waited until 2005, respectively 2007,
to engage on their first e-commerce experience. Was that a wise choice? Would they benefit
from an earlier entrance on the online world? The following research will try to answer these
questions by showing the portfolio of benefits and consequences of using Social Media as a
communication and promotion tool. Will desire and exclusivity, ones of the most important
factors in the luxury industry, will loose from their strength?
Macmillan (2009) is stating that the unique relationship that luxury has with its clients would
to be placed in the context of the Internet, where consumers are in total control and can react in
any way they desire, the luxury brand would loose from its exclusivity, it would be suffocated
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and leaded to anxiety while the luxury customer would be confused, surprised and somehow
disappointed of the total exposure of their favorite brand.
As an objective, the study will try to provide a clear interpretation of the benefits and
consequences that the Social Media is bringing to the luxury industry.
For more accurate findings, the small study case of the De Oost Bespoke Tailoring BV will be
presented with facts (before/after), actions, interpretations and benefits/consequences of using
SM as a marketing tool in the specific industry.
The research question of the study is:
What influence/impact does Social Media have over the luxury brands?
Above, in the theoretical part of the research the full concept of Social Media and Luxury
Industry were discussed. Taking separately and dissected with the help of question like what
is, what for, how to the two concepts were given a full definition. As well, how both of
them react in the marketing environment, social media as a marketing tool and how to market
luxury brands. Moreover, the topic of luxury brands in the online environment was discussed.
This, combined with future research will give good insights of how luxury behaves in the Social
Media environment, and how luxury brands should approach Social Media.
The research question is supported by additional questions that have a more targeted focus.
1. If used as a marketing tool in the luxury industry, what influence would Social Media have
over the image of a luxury brand?
Would the luxury brand image suffer from a form of deterioration? In previous researches,
Okonkwo (2009), it was stated that when getting on the online environment, luxury brands are
disclosed to face the risk of increasing sales and the risk of over-exposure. How would the
consumers perceive these influences and what is their behavior towards them?
2. Does Social Media have the power to replicate the luxury environment, luxurious feeling
and high customer service from the flag-ship luxury stores and boutiques in the virtual
world?
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At the moment luxury brands are still perceived as a point of difference in the society to divide
the various social layers (the rich from the poor; the ones that are perceiving the prestige of a
brand as an important factor of influence in purchases versus the do not have such high
expectations). Will the consumer still feel the exclusiveness and prestige as being part of their
experience when their favorite luxury brands are exposed in the Social Media environment?
Will luxury managers be able to re-create the journey throughout the flag-ship stores and still
give the consumers the feeling of uniqueness in the online world? Jean-Noel Kapferer and
Vincent Bastien (2009) were describing what customers feel when entering a Louis Vuitton
flag-ship store and what kind of feelings and emotions they have during a purchase and also the
superiority level of the customer care provided. Will Social Media have enough resources to
replicate this?
3. What are the principle guidelines for luxury brand managers to follow when using Social
Media as a marketing tool?
After ending the research, a guideline with the most important principles needed to use Social
Media in the luxury industry will be presented. This will also make from the entire research an
important paper that could serve managers from the luxury industry to understand the
appropriate usage of Social Media as a marketing tool.
Taken in consideration all the questions raised, for a better interpretation and for visualizing the
logical frame of the research the following concept model is presented:
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Figure 6: Conceptual Model
Using SM as a marketing tool in the luxury industry has a direct effect over three factors: brand
image, environment replication and consumer perception. Consumer perception when using SM
in the luxury industry is currently perceived differently. Opinions are divided between positive
and negative. Like mentioned by Okonkwo (2009), some users still perceive Internet as being a
channel for discounted products, damaged goods and counterfeits, but while the technologies are
evolving, consumers are changing their opinion.
Like represented in the conceptual model, the consumer perception can be influenced as well by
the brand image and environment replication on SM for the luxury brand. These are two
important factors that will determine if the relationship is positive or negative.
After the research the relationship between SM and the brand image and environment replication
will be presented. Is it a positive or negative relationship? Can SM be used as a marketing tool
in the luxury industry and what impact it will have over the industry? The research using its
practical research will try to bring good insights regarding all these questions.
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Methodology
The research design draws on data from the company De Oost Bespoke Tailoring BV that
operates in the luxury industry but as well from interviewing a group of luxury consumers.
Gradual improvement, growth, development, advancement of knowledge and best practices, in

one single word: progress. The relationship between Luxury Industry and SM can be described
in this way, a continuous progress in a fast growing step. This was the main argument for
implementing Social Media in the marketing strategy of De Oost.
Everyone has the opportunity to make choices in life. Some decisions can be evident and other
can be masked by the haze of the majority. Bespoke tailoring is about maneuvering mentality
and rejuvenates the consciousness of external presentation which leads to added value of non-
verbal communication in the consumers day to day lives. This allocates the presence of
consumers to speak for themselves by creating their own trend to enhance their experience,
influence their behavior and with others around them in a positive matter. The challenge is to
embrace individualism by leaving behind the idea of being the same as the next person in line
and crossing over to the unknown of being one out of a hundred in a crowd wearing a specific
luxury brand.
The core principles that drive the business of De Oost rotate around the consumers and
consumers needs. In times where evolution is part of the daily routine, where consumers expect
from their brands to perform all the time at its best, practices like Social Media cannot be
ignored.
Research design
The research adopts the subjectivism position suggesting that social phenomena are created
from the perceptions and consequent actions of social actor (Saunders et al., 2009). This is
connected to the constructionists need to investigate the subjective constructs and reveal what
stands behind them. In order to explore the research question the inductive approach is applied. It
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aims to provide a more accurate in depth comprehension and insight into the understanding of
the impact and influence of Social Media when used in the Luxury Industry as a marketing tool.
The research will use a qualitative study that will bring insights regarding the relationship
between Social Media and the Luxury Industry. As well, it will provide the best practices for
managers of how to use Social Media in this business sector.
The research process used a cross-longitudinal study that started in February 2011 during the
internship at De Oost Bespoke Tailoring. The internship lasted for 4 months, while data about
the actual positioning of the marketing strategy of the company was collected and the
implementation of Social Media as a marketing tool. After a period of 1 year and half new data
was collected to understand the main changes that appeared during the usage of SM as a
marketing tool, the benefits and consequences, the new brand image of the company but as well
a small guideline for luxury managers that want to approach SM as a marketing tool.
The collection method is semi-structured interviews. The transcripts of the interviews, enclosed
in the research, enable the readers to evaluate if the findings can be deployed in other
circumstances what reflects the high external validity and transferability of the paper. In
addition, the research applies existing constructs what attests its high construct validity.
However, all the interviews were conducted within one organization engaged in the luxury
industry (bespoke tailoring) plus consumers of luxury goods, fact that decreases the
generalizability of the results (Saunders et al., 2009).
Data collection
The first person interviewed was the owner of De Oost Bespoke Tailoring, Jean-Paul Samson,
for a full in-depth interview, followed by two other managers of the company plus luxury
consumers of different nationalities. In total, there were 10 interviews conducted via Skype, mail
or face-to-face meetings. The questionnaire was consistent via the entire sample, the only
difference being for the owner and managers of De Oost that have additional questions regarding
the company. It used a checklist of 17 questions divided on three blocks for the consumers
(Social Media, Luxury Brands and Impact of SM over LB) and plus an additional block for the
owner and managers of De Oost (De Oost understandings). Collected data was transcript into a
37
hard copy and inductively analyzed. The open coding approach was applied in order to analyze
illustrative quotes and identify initial concepts. Then it was grouped into several categories.
Table 6: Coding approach
First order codes Second order codes Examples

-the SM concept Social Media A tool to reach a lot of people so the right one may stumble up on
-SM channel of us or gets us on his/her radar because of sharing of others. Int. 3
information and It is most certainly a channel of information and communication.
communication People all over the world have now got the possibility of meeting
-SM channel of each other on a regular basis over the internet. Communication has
purchases become easier, geographical boundaries are ceasing to exist. And
-SM as an advertising in the era of Facebook and twitter and such definitely
influencer in touches more people. Its not like an add on the side of the street that
purchases you pass by while hurrying to work and maybe not even see; its
there , on the side of the page youre starring at expecting a reply or
something in your spare time, so youre bound to notice it. Int 6.
-Luxury brands Luxury Brands A luxury brand for me is a company that leaves the price/ value
definition reasoning and attracts fans who want a certain experience and by that
-The emotions and judge what the value is for them personally. Int. 3
feelings of
possessing luxury To me, the experience in the luxury store is very important. The
-Flag-ship store unique feeling of being a customer in an exclusive place makes the
experience purchase itself a very pleasant act. Int. 7
-SM as a Impact of SM over LB Yes, I do. Giving the consumer the opportunity to voluntarily
marketing tool for choose, whether he or she wants to be influenced in his or her
the luxury purchase intentions (getting his or her attention through notable
industry design, entertaining features on the internet, through useful apps or
-brand image of offers etc. Int. 4
the LB after using It depends on what kind of content would the brand post, if it is
SM consistent to their message, it would not change my perception.
-main However if it differs strongly from brands mission and image, it
considerations for would affect negatively. Int. 5
using SM as a Definitely not. The experience inside a flag-ship store cannot be
strategy equaled by an experience in SM with the brand. Firstly, I'm thinking
-flag-ship store about the assistance you get in such a store, that you cannot get
experience online. Furthermore, a flg-ship store tells the customer what he/shee
replication needs to know, it transmits the brand's core value through all the
-E-boutiques elements inside. In SM, I only find those platforms that spring
experience directly from a core brand ideal or customer need successful without
diluting the brand itself. Int. 7
-SM in De Oost De Oost Luxury brands worry that if they allow interactivity or user-
-Implications and generated content, if they initiate a conversation between brand and
learnings of using buyer, they will lose control of the brand image. This is simply not
SM within De true. There are many ways to encourage interactivity while still
Oost maintaining control of the brand. Look at Burberry s Art of the
-Key milestones Trench, a photo-sharing destination that primarily features
of using SM Burberry-commissioned, high-end photography of models in the
-Future brands seminal trench coats. Whats more, it also allows consumers
expectations inside access if they upload their own pictures (which are vetted and
selected by the brand). Therefore, Burberry successfully reaches a
significant audience while maintaining brand control. Like Burberry,
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luxury brands must learn that they can create digital campaigns with
embedded brand control. Killing the conversation outright is not the
answer. Int. 7
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Analysis
Social Media
Online social networks are the latest phase of a broader economic and social change. The
industrial age is coming to an end and this may either be one of the final stages of it, or it may
represent the emergence of the next phase of society. Either way, technology is changing what is
considered normal daily life. Global connection is unprecedented in terms of numbers and speed.
Social Media has established a firm position in consumers life by being used and seen on daily
basis, but as well accepted as a positive change for how people interact between each other, with
companies, brands and daily news.
After all interviews, there were no negative answers to the question Are you aware of the Social
Media term?. Moreover, interviewees were able to give full definitions of the SM concept
capturing the broader meanings of it.
The meaning of Social Media from my point of view is communication in communities, most
likely based on online or mobile technologies. I see social media as an opportunity to be social,
without being social. Meaning staying at home and interact with people from all over the world.
It makes it very attractive for firms to advertise on these platforms, as they reach the people at
home, in a comfortable situation. The brands advertised with social media can evoke the WOM
effect easier and map themselves as the brand of society in consumers perceptions. (Roman
Jurjew CRM Representative luxury consumer).
From a professional point of view of a daily basis user of SM in a company, the owner of De
Oost has an interesting definition and approach of SM.
A tool to reach a lot of people so the right one may stumble up on us or gets us on his/her radar
because of sharing of others. (Jean-Paul Samson, owner De Oost).
Both definitions focus on the WOM advantage of SM, being a tool that has an easiness in
reaching consumers worldwide with reviews and own opinions of other consumers.
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Still, it is not only about connecting consumers with each other. Starting from the following
statement that Social Media makes the whole world seem like a small town where everybody
knows everyone and by connecting a lot of people of different social status, age etc (Andriescu
Ana-Maria, owner of Bakkerij Steylaerts luxury consumer), SM can be translated as a strong
source of advertising for a company, a great advertisement tool which has a big influence.
More than that it is necessary to underline the fact that it is comparable cheaper for the
companies to advertise their products through Social Media. (Kliuchkovska Larisa, Director of
Revenue Accounting Department at Ukrainian International Airlines luxury consumer)
Considering the contradicting theoretical approaches of Riley and Lacroix (2003) that internet is
merely a communication channel and does not feel like an adequate purchasing channel whereby
Okonkwo (2009) is on the opinion that Internet can meet both communication and purchasing
functions, the interviewees brought their own experience of how they see SM. A
communication and informational channel? Or purchasing channel? Or all three of them? SM is
such a broad term; it covers a large range of websites. But the one common link between these
websites is that one is able to interact with the website and interact with other visitors. As SM, on
the other hand, is a two-way street that gives the ability to communicate too, it is, for sure, a
good purchasing channel as well. Getting relevant information from others helps one make
better and more informed decisions when purchasing online. (Adelina Cimpeanu Account
Manager luxury consumer)
Still, other consumers where on the opinion that Social Media is clearly a channel of
communication and information that grows rapidly from one day to another. It cannot be
ignored. Nowadays it is not enough anymore to have only a website, but you have to be present
and active on Social Media where you can promote your products and services. Customers and
clients have a big present on the Social Media World and you are not allowed to miss any
opportunity. (Corina Ripeanu, Finance Director Intracom Romania luxury consumer)
Even if the opinions and own experiences where shared and not in the same direction, one thing
is certain. SM it is not only a channel of communication and information but also a strong
influencer for making purchases. When asked about the influence of SM in their purchase
process the majority of consumers accepted the fact that SM offers a great help for acquiring
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different goods and services. I search online before making any acquisition, read reviews or
even join some forums, groups and discuss any doubts I may have. (Adelina Cimpeanu luxury
consumer)
Luxury brands
As discussed in the theoretical part of this research, luxury brands are perceived differently by
each individual. Therefore, to get a better understanding on how luxury is positioned in their life,
each interviewee had to define the luxury brand term.
In the following table the most distinctive definitions are presented. Uniqueness, high-quality
and low availability seem to be the most three important characteristics of a luxury brand.
Table 7: Luxury brands definition
Who Definition
Finance Director Luxury brands are part of a different world, where the really wealthy people
luxury consumer are living in and people that from time to time are trying to enter it.
Luxury brands offer you a good state of feeling, comfortable when you own
them, but it is said that this state feeling disappears if the access to them is
unlimited.
Owner De Oost A luxury brand for me is a company that leaves the price/value reasoning and
attracts fans who want a certain experience and by that judge what the value is
for them personally.
CRM representative Luxury brands for me are brands, which do cost usually more than I expect.
However, mostly of those are linked to higher service and product experience
(e.g. customized suits).
Account Manager Luxury is all about providing exclusivity, providing unique experiences,
fostering deeper customer engagement and creating emotion around a brand.
Beyond all obvious and superficial considerations price, availability and so
forth what fundamentally sets the luxury objects apart is the concept of unique
achievement.
Frequently buyer of Luxury brands are brands producing any kind of goods aimed at a certain
luxury goods group of people that can afford buying high quality products for a high price.
Usually luxury brands belong to the so-called trend.
Moving further in the research the interviewees had to explain their state of feeling when
acquiring and possessing a luxury brand. Relatively all answers were constant, each consumer
referring at the good feeling when wearing or using a luxury good/service but as well at the
social position that it offers you among other consumers. It separates you from other people,
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they give me a nice feeling that I got what I wanted, the satisfaction comes from knowing
that Ive bought something good and long lasting, they make me feel good, they look good and
also make me look good, but as well it is something related to the a certain social class, your
feeling of being part of an unique group.
When questions about the flag-ship luxury store experience were prompted the answers given by
the participants were rather opposite. The persons that use to be more frequent users of luxury
brands considered that the experience in the flag-store shops is really important. Yes, the flag-
ship store of luxury brands do evoke and increase my state of feeling towards luxury but at the
same time it depends to a big extend on the people working there, if they make a good
atmosphere. From my experience I can say that pretty often in luxury brand stores, shop
assistants behave not really polite. Also, a different participate considers the flag-ship store
experience as very important, stating that the unique feeling of being a customer in an exclusive
place makes the purchase itself a very pleasant act. On the other side, were the interviewees
who did not consider the flag-shop an important factor, stated that most of them look like
decors, not really authentic, and often the employees do not fit the brand or give the correct
treatment/experience.
Here, it can be distinguished a different class of consumers, frequent consumers that perceive the
flag-ship store important, even though they do not see the experience perfect because of the
personnel from the stores and the second, the less frequent consumers that do not have a special
attachment for the flag-ship store. Still, from the answers it can be deducted a third class of
consumers, the ones that do not buy frequently luxury goods, season buyers. The flag-ship store
experience being here perceived as something to be detoured because of the constant high prices.
If the stores are too demanding and too luxurious I tend to avoid them.
Coming back to the frequent luxury consumers, they consider that certainly some of these stores
make you want to own a few of their products and also they their state of feeling towards style
and self-presentation.
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Impact of Social Media over luxury brands
Social Media - marketing tool in the luxury industry
Like mentioned in the theoretical part of the research the consumer perception over using
Internet as a marketing tool in the luxury industry is slowly improving. Sustaining Okonkwos
(2009) findings and also answering Rileys and Lacroixs (2003) research if luxury branding on
the internet is a lost opportunity or impossibility it can be mentioned that Social Media can
definitely be part of a marketing strategy for a luxury company. Majority of consumers
considered that not only SM is a good tool at the moment, but also it still has time to grow
considerable because of the daily innovations in technology. SM can be used as a proper
marketing tool especially in the case when the experience tools/applications further develop so
you can give more look and feels. Also then you could show more of the actual expertise. Still,
the fact that SM puts you in direct contact with consumers and potential customers to
strengthen brand affinity by creating groups around their brand and also because it represents
an elegant opportunity to control and enhance a brands exclusivity, it can be said that SM
brings a high potential in a marketing strategy.
Nevertheless, the findings and implications of Okonkwo(2009), Riley and Lacroix (2003) and
Seringhaus (2008) when using internet in a marketing strategy for a luxury brand, are translated
also for Social Media. SM can be used as a marketing tool in the luxury industry, but only if the
other channels are kept in parallel. Considering that the frequent consumers of luxury need the
classic luxury boutiques for the services delivered there, being their way of living. Still, SM being
an impersonal channel of communication, automatically less intimidating, it could be utilized for
the less frequent consumers that are afraid to step in the luxury flag-ship stores. Being able to
check new models, prices and decide for a future purchase.
Starting from Roux and Floch (1996) research where they concluded that luxury brands
organizations have to maintain a fragile equilibrium between high exposure and awareness,
internet and automatically Social Media had been put in a bad light regarding its usage as a
44
marketing strategy in a luxury company. The respondents are confronting these findings by
embracing SM as a tool for their favorite luxury brand by underling that mostly of the brands I
like do fit in my way of life. Again, the majority of respondents do see the possibility for their
favorite luxury brand to be active on Social Media by underlying that luxury brands must
embrace the fact that their primary products are actually elusive and ephemeral feelings, and
that their physical products are mere mediums through which consumers achieve those feelings.
Therefore, a luxury brand must determine its emotional value first, and construct its physical and
digital manifestations to express and extract that specific emotion. No matter what, luxury
brands should be present on the SM mediums but in a more luxurious and extravagant way so
they would not create a discrepancy between their offline and online image. Still, the luxury
should be perceived as a hard accessible level so it would not transform in a common good. This
does not mean that it should not find ways to comprehend new techniques and survive within the
online mediums.
Social media enables luxury brands to build tremendous clout among the aspirational set. In
some cases, social media may be the only place where aspiring consumers can reach the brand at
all. As such, it can be said that the perceptions change in the long run taking into consideration
their activity in SM.
Main considerations for using SM in the luxury industry
Table 8: Consumers' advice for luxury companies that want to use SM
Consumers How/Why
Director of The luxury brands should be clearly distinguished from all other mass of products
Revenue presented through SM. The charm and uniqueness should be also saved online. Like you
Accounting enter a luxury shop you should enter a luxury page and understand that even online you
Department are taken as a special customer. I think it is very important that people can quickly and
easily reach web sites and get aware of features and qualities of such products; however
the access for such products and ability to buy for everyone should be limited.
Finance Do not lose the focus of the customers needs; they need to feel special, being part of a
Director unique target group.
CRM It should not be cheap looking, or annoying, or filled with information. A good looking
representative picture, a wise or funny quote, or a useful tool (e.g. an app, with a full body picture,
where you could combine new clothing collections and see how it looks like on you, or
sent to friends to rate this combination. This might increase the purchase intention
45
dramatically, feedback from friends).

Project Lately every brand wants to be on social media just because everybody else is there. Do
Coordinator not leave this impression.
Frequent Stick to the brand style and try to reach all the customers. Procedures should be safe
luxury and easy.
consumer
Account Luxury brands worry that if they allow interactivity or user-generated content, if they
manager initiate a conversation between brand and buyer, they will lose control of the brand
image. This is simply not true. There are many ways to encourage interactivity while
still maintaining control of the brand. Look at Burberry s Art of the Trench, a
photo-sharing destination that primarily features Burberry-commissioned, high-end
photography of models in the brands seminal trench coats. Whats more, it also allows
consumers inside access if they upload their own pictures (which are vetted and selected
by the brand). Therefore, Burberry successfully reaches a significant audience while
maintaining brand control. Like Burberry, luxury brands must learn that they can create
digital campaigns with embedded brand control. Killing the conversation outright is not
the answer.
The respondents consider that high exposure of the brand on the SM platforms is not a thing to
be afraid of. If the brand image is replicated perfectly in the online platforms it could not loose
from its heritage. Moreover, SM can be accessed worldwide on computers, laptops, mobiles,
tablets thing that brings the favorite luxury brand closer to the consumer. At the same time,
managers of luxury companies should never forget their routes, satisfying the customers needs
at the highest level and make them feel part of an elite group. These can be achieved by using
technology on their side, with new applications but as well with interactive digital campaigns
that would bring the exclusive to the next level. One of the interviewee gave the example of
Burberrys Art of the Trench campaign, where they successfully engaged in interactivity and
conversation with the consumers without losing control.
Franois Le Troquer, the Managing Director for UK from Cartier Ltd. was recently saying that
the world is changing, the economy is changing, and the geography of luxury is changing. We
want to just remind people who we are at Cartier. This was said while lunching LOdysse de
Cartier, a film of 330, which took a team of fifty talented people around two years to be ready.
The movie not only that presented the entire history of 165 years of Cartiers heritage, but as
well it showed in a prestigious and extravagant way the luxurious jewelry in their most important
46
three luxury markets. Considering that the short movie was available on channels like Youtube4,
Facebook and Twitter, not only that Cartiers strategy is embracing Social Media but as well
embracing the new trends and changes in the society.
Together with this example, the findings of the interviewees strengthen the idea of contradicting
the theory that luxury should not suffer big changes and should not be exposed to masses. If
done, in a proper way, according to the entire strategy of the company, according to what
consumer understand through the term of needs and putting high value on quality and somehow
managing to separate the different layers of consumers (consumers that feel unique because they
poses such goods and consumers that only dream to touch such level), SM could be not only an
useful tool but as well a successful tool for such an industry.
Flag-ship store experience re-plication through e-boutiques:
Table 9: Flag-ship store experience re-plication
Consumers Re-plication of flag-ship Luxury boutique offline Experiencing products in

store experience in the vs. luxury boutique luxury boutique offline vs.
cyber world online luxury boutique online
Director of The replication is possible, In real life you can touch For me it is very important to
Revenue however strict criteria should things, see them, and feel see and feel products in real
Accounting be followed to prevent loss of life, which is why I prefer to
their uniqueness. You are
Department the luxury sense. In order
treated as a valuable/ special experience luxury products in
to keep customers, companies
should virtually create guest. When you enter a real life. However to get
atmosphere of uniqueness luxury shop you enter acquainted with new trends and
and rareness. SM should another world as everything collections I prefer online.
transmit the same perception from furniture till small
as real shops do. details are designed in order
to create synergy of luxury
brand. Entering shop online
it is different because you are
surrounded by common
things. However, these
feelings disappear as soon as
you enter the page where all
the sense of uniqueness is
created online.
Finance It is hard to re-plicate the From my point of view, I The disadvantage of using e-
Director same type of experience but would feel rather more boutiques is that you could not
this could be used at the comfortable in a virtual try the products but as an
4
For experiencing Cartiers magic follow the link: http://www.youtube.com/watch?v=yaBNjTtCxd4&feature=player_embedded#!
47
same time as an advantage. store. Here I could stay as advantage you have more
Using SM for targeting the so long as I want and change freedom of choice.
called occasional luxury my mind as many times I
consumers that feel need too, but as well study all
intimidated by the magnitude goods in details without
of the luxurious boutiques. feeling any pressure from the
shop assistants.
CRM The process should be I feel not comfortable in a There is the difference that in
representative possible. The brands need boutique in real life, where in real life you can see what you
recognition. Making a the virtual world I do not get. Where SM actually just
luxurious atmosphere by care. strengthens the intention to buy
using adverts and it in real life.
applications that fit in the
strategy portfolio.
Project Replication is possible but In my opinion the biggest Yes, I prefer to see and feel the
Coordinator not substitution. Social media difference are the people in luxury product before purchase,
still has its limitations and I the store. While watching since I am paying more for the
think luxury brands have other customers you get a luxury product, I want to get the
strong associations to special feeling of being part feeling of having the product
feelings and atmosphere, of an elite group. Online is before purchasing it. When
which is harder to replicate hard to achieve this. purchasing online the product
online. will just appear in my post, and
the purchasing cycle doesnt
differ in any way from buying a
low price product. In real life
you can get the premium feel of
the store, the employees, other
customers, etc. for me it works
as re-assurance of the quality of
the actual product.
Frequent luxury The techniques are available I can spend more time for I can spend more time for
consumer for such a replication; it viewings on-line, which is viewings on-line, which is
depends on the quality of pretty awkward in a real pretty awkward in a real shop,
work that people put in their shop, however in the real however in the real boutique
creation process. boutique you can touch and you can touch and try the good.
try the good.
Bakkerij I am a bit doubtful about this, Theres the whole feel of it, As I was saying, seeing is
Steylaerts everything looks better in not only the product itself but believing so there definitely is a
Owner pictures so I guess I tend to also the store and the difference.
distrust them a bit. decorations and the
atmosphere. Online, you
only get the product.
Account Definitely not. The Firstly, I'm thinking about the There is nothing above touching
Manager experience inside a flag-ship assistance you get in such a and feeling exclusive high-
store cannot be equaled by store, that you cannot get quality goods made from
online. Furthermore, a flag-
an experience in SM with the premium materials. Online you
ship store tells the customer
brand. what he/she needs to know, it can experience the brand itself,
transmits the brand's core watch it as it builds tremendous
value through all the prestige among the affluent set.
48
elements inside. In SM, I only Social media enables luxury

find those platforms that brands to build tremendous
spring directly from a core clout among the aspirational
brand ideal or customer need
set. But experiencing a luxury
successful without diluting
the brand itself. product in the real life is a
totally different thing; it always
brings cheer to a gloomy
situation.
Replication can be possible but not substitution. This is not the purpose of this research, to
find out how the classic marketing strategies can be substituted with the young SM approach.
Therefore, it can be said that the consumers interviewed see in SM a good support for the
classical marketing strategies followed by the luxury companies. A good example of supporting
classic marketing activities with Social Media is the opening of the new Louis Vuitton flag-ship
store on the New Bond Street in London. Consumers that were not able to join this premier live
in London, had the opportunity to stream it live directly on Louis Vuittons Facebook Page and
Youtube, but as well to find the streaming link on Twitter.
Also, the biggest advantages and disadvantages brought by the usage of SM seem to be the same
in each particular case. As a disadvantage, consumers miss the lack of actual touching and
feeling the respective luxury good. Where the advantages tend to slowly grow, the respondents
saw a great support for a future purchase in SM, by having a longer time of decision over your
future purchase, to research and learn from past purchase experiences of other consumers, and
professional opinions. Also, for the occasional consumers, the fear of entering the luxury
boutiques it is not a constraint anymore, having the freedom to stay online how much they
consider without having the feeling that they are pushed by the shop assistants to make a faster
decision.
De Oost Bespoke Tailoring BV
About De Oost
De Oost Bespoke Tailoring is a classic Tailoring House with a contemporary sense of style and
personal attention. Based on traditional handwork they create looks and styles for consumers to
feel dressed as their personal story.
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De Oost designs and crafts all kinds of business, leisure and formalwear for ladies and gentlemen
who reckon the value of a personal and hand-tailored creation. Also, De Oost receives clients
personally to discuss and brainstorm regarding their look and style.
Based on the garment consultation fabrics and design will be decided and all the preparations
(e.g. measurements) will be done. After one month the garment is ready for the final impression
and decision of the consumer.
The motto of De Oost is: Dress Consciously because De Oost thinks that clothing is more
than a fabric or a label.
The services offered by De Oost:
Bespoke Tailoring for ladies and gentlemen

Alteration and repair service
Garment and style consulting
Corporate fashion consulting
Travelling tailor services
Wardrobe management
De Oosts way of communicating with consumers before implementing Social Media
De Oost appeared on the Dutch market in 2004. As every start-up, the initial database of
connections (future possible customers/clients) was rather unsatisfactory. But, considering that
De Oost was offering high-end products and services, a strategy of full exposure and awareness
could not be chosen. De Oost, had to be careful and target a specific group of consumers.
The number of communication channels was rather small, being considered to use first, a web-
site for showing and arising the future customers appeal. WOM was the most important factor,
De Oost having a rule that you can be a client only of at a recommendation of a present/previous
client. Like this, De Oost was targeting a niche group of clients and appealed as being more
unique and apart from the other Bespoke Tailors.
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Why Social Media?
Seen as a contradictory approach to the actual strategy, De Oost considered engaging in Social
Media. But, the owner of De Oost did not see it as a contradictory option; it was just a way of
keeping pace with the fast moving trends of reaching consumers.
At the same time, being a small company that was going through a hard budget period, Social
Media sounded the perfect option.
A full research was made with the potential future SM platforms to be used, of how to engage
and interact with present customers, potential consumers and why not potential partners.
Main changes after implementing Social Media
The use of Social Media did not yet reach its goals. It is still in a development process,
upgrading and rising fast towards a better and improved channel of communication. Along the
past years, many SM platforms appeared as the next game changer, while they found themselves
just victims after 1-2 years because of the crucial and rapidity of changes in the online world.
Everything is adapting, changing and trying to satisfy the known and unknown needs of the
consumers. (Jean-Paul Samson, Owner of De Oost Bespoke Tailoring BV)
To be considered and underlined the fact that SM is used in De Oost for only 1 year and a half.
Many things are still in a learning curve and not yet met. On the other hand, things did evolve
and a part of the expectations were met.
At the moment De Oost is engaged on Behance, Facebook, LinkedIn and Twitter. As well, it
managed to change its old website by recreating a new version, with a blog image. Here you
can understand easier the story behind each product and service but as well interact easily with
the creators of De Oost and other consumers. Also it has a more luxurious and classy
attractiveness.
The main changes that appeared after implementing Social Media as a marketing strategy were
stated during the interview conducted with the owner of De Oost.
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First of all, I would like to mention that the most important thing is to build your Social Media
Strategy in line with your brand strategy. On Social Media information spreads in a really fast
pace so it is really important to engage on it correctly from the beginning. Any wrong moves can
damage your image as a brand and company. The aim of Social Media is to create richer
interaction between customers and the brand than is possible with the normal media.
The biggest change in the company was that we had the opportunity to reach the consumers
easier and to maintain a stronger relationship with them by supplying with weekly stories that
are found behind our brand name and products. As well the consumers found of way to reach us
easier and to interact with the past experiences of other consumers. Feedback and back-and-
forward information, opinions, experiences and stories are extremely important for a company
as De Oost.
I found Social Media as a really accessible tool for De Oost, a tool that can lower the financial
commitment but also gives you the opportunity to build a brand heritage in an integrated and
continuous manner.
Also Social Media was an opportunity to extend our old ways of communicating our strategy and
image, a way of increasing our potential as a Tailoring House and also a way of having Global
reach.
Future implications and advices for managers that want to implement SM in their marketing
strategy
Considering that SM offers a variety of opportunities but as well threats the owner of De Oost
offered its time to present them from his own point of view. The following table is summarizing
them in a more easy-to-read shape:
Table 10: Opportunities and Threats of SM
Opportunities Threats
New way of communicating with consumers Not easy to control
Accessible for new and small brands Risk of clutter if the SM strategy does not meet
Low financial involvement the initial strategy of the brand
Opportunity to build a brand heritage
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An extension to the traditional media No certainties about what and how works best
Global reach Huge amount of hours spent on interaction with
High potential consumers
Mobile internet that allows you access to SM
Global reach
platforms
New technologies and applications that can
bring SM to the next level
As seen above, Social Media presents a long list of opportunities and threats that managers
should consider from the beginning when thinking involving it in a marketing strategy.
Still, as mentioned before SM is still in an evolution process and will certainly bring more in the
game, managers should keep track of routine updates and understand how everything can fit in
their strategy and ultimate core.
Jean-Paul Samson, in the ending of the interview had a final statement saying that: Never forget
what your purpose is and of course, keep on posting!
There are many stories of companies that want to be in control and get it wrong. Many
companies seem to be taking their time, listening, learning, appointing CSOs and trying to get
SM right. De Oost, is one of the companies that learns from its mistakes and from mistakes made
by others, improving regularly and trying to keep track of its purpose and strategy without
creating confusion among consumers.
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Discussion and other findings
Throughout the journey proposed by the flow of the interview, consumers brought the same final
conclusions even if each interviews were done separately without disclosure.
Starting from the first sub-question of the research, it can be said that consumers do not see
Social Media as having a negative affect over the luxury industry if used as a marketing tool. As
considered by Kapferer (2000), internet presents both an opportunity and a threat for luxury
brands, in this case Social Made can be both, an opportunity and a threat. It is at the managers
decision of how they perceive SM and how they translate it in their strategy. The strategy has to
be consistent and translated carefully in the online world without distorting the consumers
perception. Social Media by itself cannot change the brand image of a luxury brand but having
different strategies in real life and in the online world could. Moreover, consumers consider that
by approaching SM, managers will be able to engage communication with all different types of
luxury consumers, creating different target groups and at the same type strengthening their
relationship with their favorite brand. As already known, a luxury good has all the time a story
behind, which enhances its value and upgrade its image to exclusivity. By using Social Media,
such stories can be delivered easier to consumers and confirmed by others with their own
experiences. Discussions can be driven in the directions pursued by the managers, easily, by
helping consumers to get in different points. Social Media is a consumers world, but with small
guidance everything can be controlled and impressive results can occur.
At the same time, consumers have the opinion that luxury has to remain something harder to
reach no matter what, but this does not mean that it cannot be translated in Social Media. Using
new technologies and applications, the luxury goods can still have an exclusive and hard to
touch image on the Social Media platforms. Like this, luxury goods will be perceived closer to
the consumers because they can be accessed (viewed) easier, but at the same time they will be
kept at a certain distance because of their hard to reach, impressive, high quality, greatness,
opulence and lavishness image. Still, consumers that had a negative reaction towards the usage
of SM (e.g. Project Coordinator) feel that the content shared on Social Media will make the big
difference. It has to be consistent to their companys message and image by any means if wanted
to be successfully.
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These statements bring a big support to the research made by Okonkwo (2009) when trying to
show that internet can be a positive factor in luxury company strategy but at the same time bring
additional knowledge when focusing only on the Social Media area. Topic not yet discussed in
the existing academic literature.
Looking at the entire research it can be concluded that between Luxury Brands and Social Media
exists a guided positive relationship by the managers experience, knowledge and way of
perceiving and translating its companys strategy.
Figure 7: The Positive Impact of SM over the Luxury Brand Image
The second sub-question of the research referees at the ability of Social Media to replicate the
luxury environment from the flag-ship stores in the online world. Analyzing the results driven by
the consumers answers, it can be observed different consequences and benefits of the re-
creation. However, consumers have a positive reaction to the re-creation by adding different
benefits but as well consequences when the process is done.
Starting with the consequences, the biggest minus of the online world is the tangible factor. Even
if the entire atmosphere of a luxury shop can be translated through a luxury website that brings
up to life the story of the luxury goods, or through a video that presents the experience, history
and heritage of the brand, or a live event presented on SM platforms like Facebook or even the
experiences shared and enhanced by luxury experts on different platforms, the need of
consumers to touch and feel the good is not satisfied. This can be commented in many ways, but
never fulfilled by SM at the moment even with all the technological progress nowadays. The
second minus is the customer care given by the personal in the flag-ship stores. This can be
commented as a positive or negative consequence because consumers complained many times
55
that the shop assistants have made their experience, to change in a negative way, the perception
over the brand image. At the same time, new technologies and applications allow us to have
audio and video guidance throughout the SM platforms in our journey for luxury goods. This
would help managers to avoid any future mistakes of the personal of luxury stores creating their
own way of showing the entire experience making it closer to the value and mission of the brand.
Moving to the benefits part of the SM usage we can see that the consumers view is rapidly
changing and adapting to the new trends of the society. Regardless to what consumers thought
about internet usage in general in the past, being only a channel for retail of price discounted
products or damaged goods and counterfeits or that online advertising overexposes a brands
image and damages its equity, moreover that luxury consumers do not access this channel (Chen,
S., 2001), now SM is seen as a channel that meets the expectations of the consumers; a channel
that brings the brand closer to the consumer and gives stories and experiences from other users; a
channel of uninterrupted interaction between company and consumers, brand and consumers but
also consumers and consumers.
Another benefit is the opportunity to create different target groups around your brand. Elite
expert groups that have a larger experience with luxury goods and can share their positive stories
regarding the brand to a second group of new luxury consumers or aspiring luxury consumers.
This can create a stronger relationship between both groups of consumers and the brand, because
it will be perceived as a brand that cares about the consumers needs and gives special attention
to them, feeling unique.
In some cases, consumers do not have permanent access to flag-ship stores, which makes them
not aware of the new collections and trends of their favorite brand. By being exposed on SM, the
brand can reach any consumer no matter the physical distance between them. As well, there are
consumers that feel intimidated to access such stores, real temples of luxury (Kapferer, 2000),
and by using SM as a marketing strategy, the brand will as well give them an opportunity to be
up to date with their favorite luxury brand.
Each luxury brand has a group of consumers called more or less, aspiring consumers. These are
the consumers that are amazed by the luxury world and want to be part of it. Changes in their life
and in their social statute can switch their status really fast into luxury consumers that is why the
56
luxury world should choose carefully how to interact with its users. Nevertheless, the boundaries
of the openness of the brand should be strictly considered.
Considering the daily technological progress, SM does not provide users only with the
experience related to the brand image itself but more than that. Nowadays, the experience of
trying on luxury goods like clothing, shoes, jewelry or other accessories can be made from
home or other locations, of course with special equipment and applications. An example is the
new Xbox 360 Kinect that allows the users to replicate their image on a projected image or
screen and with the use of a menu to fit and try on diverse luxury goods5. This can bring the
actual purchase experience to the next level, consumers and users being able to try and fit
everything from their favorite places and after doing this to have the option to ask for their
friends or experts opinions of how the goods look on them.
Taking in consideration all the reasons presented above, it cannot be stated if between Social
Media and the re-plication factor of the luxury environment exists a positive or negative
relationship, but more of a combination of both. There are presented factors that strengthen the
relationship but as well factors that decreases it.
Figure 8: The impact of SM over the Environment replication of Luxury Brands
The last sub-question of the research that completes the full research is actually a guide with the
implications that luxury managers should follow when using SM as a marketing tool in their
company. This guide was compiled by using the data from interviews, from two points of views.
The first point of views is the luxury customers needs, received directly from the customers.
5
Theexamplecanbeviewedatthefollowinglink:http://www.youtube.com/watch?v=WwUa14mNNhY
57
How they see SM to be a successfully tool and what managers should follow but as well to
avoid. The second point of view is the data compiled from the practical experience within De
Oost, how the owner and managers of the Bespoke Tailoring company perceived SM in their
case. The following table presents the data as explained:
Table 11: Guide of SM usage implication
Who What to follow? What to avoid?

Consumers The luxury brands should be clearly distinguished from all other mass of
products presented through SM. The charm and uniqueness should be also
saved online. Like you enter a luxury shop you should enter a luxury page and
understand that even online you are taken as a special customer. I think it is
very important that people can quickly and easily reach web sites and get
aware of features and qualities of such products; however the access for such
products and ability to buy for everyone should be limited
Do not lose the focus of the customers needs; they need to feel special, being
part of a unique target group
It should not be cheap looking, or annoying, or filled with information. A good
looking picture, a wise or funny quote, or a useful tool (e.g. an app, with a full
body picture, where you could combine new clothing collections and see how it
looks like on you, or sent to friends to rate this combination. This might
increase the purchase intention dramatically, feedback from friends)
Lately every brand wants to be on social media just because everybody else is
there. Do not leave this impression
Stick to the brand style and try to reach all the customers. Procedures should
be safe and easy
Luxury brands worry that if they allow interactivity or user-generated content,
if they initiate a conversation between brand and buyer, they will lose control
of the brand image. This is simply not true. There are many ways to encourage
interactivity while still maintaining control of the brand. Look at Burberry s
Art of the Trench, a photo-sharing destination that primarily features
Burberry-commissioned, high-end photography of models in the brands
seminal trench coats. Whats more, it also allows consumers inside access if
they upload their own pictures (which are vetted and selected by the brand).
Therefore, Burberry successfully reaches a significant audience while
maintaining brand control. Like Burberry, luxury brands must learn that they
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can create digital campaigns with embedded brand control. Killing the
conversation outright is not the answer
Owner De Oost Build your Social Media Strategy in line with your brand strategy
Engage on SM correctly for the very start (no confusions, no distorted
messages)
Maintain a close and strong relationship with the consumers
Introduce them in the fairytale, magic of the brand
Guide discussions on your path
Include the old media, SM is just an additional support
Interact, be calm and patient. Engage in discussions and spend time close to
your consumer. Have specific rules of starting the discussion, and transmit a
clear message. Etiquette and respect for relationship boundaries are key
Do not pretend you know everything in front of the consumer
Managers De Oost The mismatch of business objectives meeting engagement risks making the
relationship between brand and the customer instable is a really important
factor to consider and to understand how not to let it happen in your company
Keep in mind that everything is work in progress and all social networks are
changing daily
The most important SN (at the moment Facebook) is not all the time the most
important for your business. This can be consider as a first tier SN together
with LinkedIn, Twitter but there are second-tier SN that can boost up your
business targeting small groups of consumers. In De Oosts example Behance
Other findings
Additional to the goals of the research, extra findings were deducted after conducting the
interviews. The consumers of luxury goods are presented in the literature as being frequent
luxury consumers and periodic luxury consumers. From the interviews conducted and previous
research this paper suggests a different and more detailed segmentation of the luxury consumers.
This is how it follows:
Frequent luxury consumers these are the most loyal consumers. Usually wealthy people
that luxury is a priority and way of living
o Frequent luxury consumers that feel the need to be seen in flag-ship stores
59
o Frequent luxury consumers that fear to enter the luxury flag-ship stores and prefer
the online stores
o Frequent luxury consumers that have no close access to flag-ship stores and are
force to use more online stores
Periodic luxury consumers these are consumers that find luxury and important factor in
their life, but not the most important. They appreciate the high quality and prestige of a
luxury good and do not consider that the price paid is too much. Still, they aspire to be
frequent luxury consumers but their social position is not allowing them yet
o Periodic luxury consumers that feel the need to be seen in flag-ship stores
o Periodic luxury consumers that fear to enter the luxury flag-ship stores and prefer
the online stores
o Periodic luxury consumers that have no close access to flag-ship stores and are
Discounts only luxury consumers these are consumers that have the money but prefer
not to spend so much. They understand the quality of the goods more than the prestige,
and they are certainly paying for the quality. Still they do not allow themselves to go in
flag-ship stores, preferring usually to go in special locations with a big variety of luxury
brands and special discounts
o discount only luxury consumers that buy in outlet stores
o discounts only luxury consumers that buy online
To all these 3 main categories of consumers it can be added a 4th category that is a type of
periodic consumers combined with the discounts only type of consumers.
This type of segmentation of the consumers in a more detailed way would give a broader view
for luxury managers to see and understand where they should focus their business and how to
position their strategy.
For a better understanding of the proposed segmentation the following table will present the
consumers interviewed in each category:
60
Table 12: Consumers Segmentation
Type of consumers Sub-category of consumers Who

Frequent luxury consumers that feel the Frequent consumer,
need to be seen in flag-ship stores Owner De Oost
Frequent luxury consumers that fear to CRM Representative
enter the luxury flag-ship stores and
Frequent luxury consumers
prefer the online stores
Frequent luxury consumers that have no Account Manager
close access to flag-ship stores and are
Periodic luxury consumers that feel the Owner of Bakkerij
need to be seen in flag-ship stores Steylaerts; Director of
Revenue Accounting
UIA
Periodic luxury consumers that fear to Product Manager
Periodic luxury consumers
enter the luxury flag-ship stores and
prefer the online stores
Periodic luxury consumers that have no Project Coordinator
close access to flag-ship stores and are
discount only luxury consumers that Finance Director
Discounts only luxury buy in outlet stores Intrarom
consumers discounts only luxury consumers that Director of Revenue
buy online Accounting UIA
61
Conclusions
The research addresses a gap in the literature regarding the study of impact of Social Media over
the luxury brands and luxury industry. The topic of Social Media is nowadays one of the most
discussed and influencing topics in the day to day reality. Through the help of the research, the
definitions of Social Media and Luxury industry from the consumers point of view are
presented, but as well it is translating the relationship between each other when SM is used as a
marketing strategy tool in the industry of luxury. The research provides a support for Social
Media to be perceived as a useful tool for any luxury company but at the same time a consumer
need and trend. However different implications are met and different guides of how to use SM
correctly are compiled.
The research drives its attention towards the luxury brand image when using SM as a marketing
tool, from the consumers point of view but as well from managers that already implemented the
tool in their company. From the in depth interviews it can be seen that Social Media is perceived
as a positive marketing tool even in the luxury industry, creating and improving the relationship
between the luxury brand and the consumers. Also, SM gives a chance to aspiring consumers to
see and understand the benefits of a luxury good and to try to reach such world.
The second part of the research shows if SM is able to replicate the luxury world through online
methods and applications. The consumers answers give a big pro reason to understand that
nowadays technology is able to closely replicate the luxury phenomenon in the cyber world.
From certain points of view, it is also giving additional benefits when SM is used. Here, the big
plus is considered for the consumers that feel intimidated by the flag-ship stores and do not enter
them. The online replication being for them a secondary option for the reality.
The last part of the research represents the small study case about the Dutch tailoring company
named De Oost Bespoke Tailoring. Here, interpretations and advices from the owner and
managers of the company are presented.
In conclusion, Social Media represents a channel of communication that would be able to

strengthen the relationship between the brand and the luxury consumer but as well to create it in
a faster and elegant way. The brand can be closer to the consumer. For this, companies have to
62
better understand the benefits and consequences of SM, drawing a strategy that is in a straight
line with their current strategy and following the proposed points of the guideline integrated in
the above research.
Limitations and future research
Even though a lot has been investigated about the impact of internet usage over luxury brands
and industry, important academic literature cannot be found about the involvement and impact of
Social Media over the luxury brands. Moreover, there is a need of more in depth research to be
done for investigating more the proposed topic.
As an addition to a future research it can be considered a more elaborated quantitative research to

observe and understand the consumers behavior and perceptions regarding the two topics:
Social Media and Luxury Industry. Through this qualitative research it was possible to
understand and perceive the consumers needs and it gave the possibility to know how to guide
an eventually future quantitative research questionnaire that will include a big and diverse
sample of luxury consumers.
Another key limitation of the research is the fact that the study case presented referees only at
one company involved in the luxury industry, which is rather small and active only on the Dutch
market. Therefore, future research should involve other companies that are active local, but as
well international and why not global. In addition, more findings can be brought by using the
above mentioned advices for future researches.
Taking in consideration the dynamics of Social Media but as well the daily improvements of the
technology and applications, a longer cross-longitudinal study should investigate its development
during different stages.
63
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Appendix
Interview consumers:
Luxury brands:
1. What role do luxury brands play in your life? How important are luxury brands in your
life? Why?
2. How would you define luxury brands? Are there more than one definition?
3. Do you consider yourself a luxury brand purchaser? Why?
4. How often do you make luxury brand purchases? In what categories? Why?
5. How do these purchases make you feel? Why?
6. Do you find it important to show that you possess and purchase luxury brands? Why/why
not?
7. Do you consider that the flag-ship store of luxury brands evoke and increase your state of
feeling towards luxury? Why/why not?
Social Media:
8. Are you aware of the term Social Media? How do you see and how can you define Social
Media? Do you consider Social Media part of your life? Why/why not?
9. Do you see Social Media a channel of information and communication? Why? Do you
see SM a purchasing channel? Why? Do you see SM a combination of these 3? Why?
10. Is Social Media an influencer in your regular purchases? Why/why not/how?
Impact of SM over luxury industry:
11. Do you think SM can be a proper marketing tool for the luxury industry? Why/ why not?
12. Would you like to see your favorite luxury brand active on SM? Why/why not?
13. In case your favorite luxury brand would be active on SM would your perception of the
brand and brand image change? Why/why not/how?
14. What are the main things that a luxury company should take in consideration when using
SM as part of their strategy? Why?
69
15. Do you think SM would be able to replicate the flag-ship store experience/atmosphere
online? Why/why not/how?
16. What difference do you feel when you visit a luxury boutique in the real life and the same
luxury boutique in the virtual life?
17. Do you see a difference when experiencing a luxury product in real life vs. the same
luxury product online?
Additional questions for Owner and Managers De Oost Bespoke Tailoring BV
1. Description of De Oost
2. What was using De Oost as a channel of communication before Social Media
3. Why Social Media
4. What were the main changes after using Social Media (benefits/consequences)
5. What is the new brand image of De Oost after using Social Media as a marketing tool in
the company?
6. What are the key milestones to follow for managers of luxury companies when using SM
as a strategy?
Thank you!
70

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Impact

Author: Catalin Ancuta

Impact of Social Media over Luxury Brands

Luxury is neither a product, an object, a service nor is it a concept or lifestyle. It is an identity, a

Impact of Social Media over Luxury Brands

Impact of Social Media over Luxury Brands

Discussion and other findings ............................................................................. 54

Impact of Social Media over Luxury Brands

Description of the topic

Source 1: Euromonitor Report. Top 10 consumer trends for 2011

Impact of Social Media over Luxury Brands

Source 2: Euromonitor Report. Top 10 consumer trends for 2011

Impact of Social Media over Luxury Brands

Gap in the literature and research problem

Impact of Social Media over Luxury Brands

Theoretical and practical relevance

Impact of Social Media over Luxury Brands

Therefore, to summarize the above statement the research question is stated:

Brief outline of the research

Impact of Social Media over Luxury Brands

What is Social Media?

o Participation everybody is continuously involved in this contribution process to share

Are Social Media and Social News the same?

Social Media Websites

Impact of Social Media over Luxury Brands

Figure 3: The Inter-Connected Nature of Social Media

Impact of Social Media over Luxury Brands

Figure 4: Social Networks Sites Landscape

Source 4: Social Media Landscape 2012. www.FredCavazza.net

Impact of Social Media over Luxury Brands

Social Networks Overview

A part of them are presented in the table below:

Table 1: Social Network Websites

Source 5: Data gathered online

1. Facebook The Game Changer

Impact of Social Media over Luxury Brands

2. Twitter The SMS of the Internet

Impact of Social Media over Luxury Brands

Impact of Social Media over Luxury Brands

Impact of Social Media over Luxury Brands

Impact of Social Media over Luxury Brands

How Social Media Works

Impact of Social Media over Luxury Brands

Table 2: Classification of Social Media by social presence/media richness and self-presentation/self-disclosure

Social presence/Media richness

Impact of Social Media over Luxury Brands

Be active continuously update SM profiles, applications; discuss and interact with

Impact of Social Media over Luxury Brands

Social Media as a marketing tool

Impact of Social Media over Luxury Brands

role is that of enabling consumer-to-consumer interaction that can be seen as an extansion of

The Luxury Industry

Impact of Social Media over Luxury Brands

What is luxury? What it constitutes the luxury industry?

The luxury term can be defined by:

something that consists an indulgence rather than a necessity

Table 3: Definitions of the luxury term

Impact of Social Media over Luxury Brands

Impact of Social Media over Luxury Brands

Figure 5: Luxury industry overview

Impact of Social Media over Luxury Brands

Impact of Social Media over Luxury Brands

Impact of Social Media over Luxury Brands

Luxury branding on the internet