Hyphen was invited by ABC Luxe to participate in a conference at the Automobile Club de France in Paris: “Luxury and the Internet: a strategic Marriage”. Hyphen’s CEO, Lorenzo Benazzo and Arnaud Barbelet, SVP of Business Development, joined a panel of luxury experts to share their views regarding the strategic potential of social networking applied to luxury brands.

Guest speakers also included Alexander Von Shirmeister, CEO of eBay France; Alain Nemarq, CEO of Mauboussin; Nicolas Lebeau Director of e-Commerce at Marionnaud; Fabien Hyon – Vice-President at 1855.

General speeches in the morning were then followed by a series of roundtables in the afternoon. Two of the five roundtables were dedicated to Hyphen and its representatives and covered: 1) How to create and manage a brand-proprietary social portal; and 2) The return on investment and impact that a brand-proprietary social portal can have on sales, brand promotion and customer acquisition.

Questions from luxury professionals and discussions that arose during the conference allowed us to bring out two fundamental problematics that luxury brands are facing today and that directly relate to the creation and applications of brand-proprietary social portals.

LACK OF CONTROL
Because of the very nature of advertising and today’s promotional venues, luxury brands seem to be suffering from a lack of control over key elements of the marketing mix:
> Control over the brand’s exposure: creative execution, mixed messages, perception from users.
> Control over related content: presence of direct competitors, blogs or comments from users, impact of the design execution that the host site / advertising venue offers.
> Control over the relationship: potential and existing customers are primarily “in relationship” with the host site / advertising venue – not the brand.

Whether on the Internet or during a co-hosted event, the sponsorship / advertiser approach provides multiple advantages that we are all familiar with (more exposure, lower costs, etc.), but the same approach also considerably limits the ability for the brand to control its exposure and relationship with the audience.

THE RELEVANCE FACTOR
Luxury brands built their business model on their ability to reach out to a more targeted audience as well as their capacity to engage customers with the appropriate offering, time and place. We noted three key areas of relevance that can directly impact these brand’s business today:
> Social relevance: lifestyles, member profiles, compatibility
> Local relevance:people living in the same city, common local venues
> Relevance of data: ability for the brand to gather information about their primary target audience, profilation in line with its customers needs and habits

Today, we are convinced that a brand’s ability to provide, and gain, relevance of content, relationships and information will directly impact the way it does business and grows its relationship with the market.

The lack of control or the ability to sustain relevance are strictly correlated online. The ability for a brand to promote itself, sell its products / services and engage customers in the long-term using the Internet is founded primarily on its ability to reach out to existing and potential clients in a compelling, relevant and useful way.

These problematics and related directions are at the core of our company’s efforts today. The very nature of social networks and their ability to engage people at a personal level tells us that luxury brands in particular should ponder the importance of supporting their existing business model with such online applications. And the same reason leads us to believe that only networking portals with a very specific invitation strategy and a controlled editorial approach – both controlled directly by the brand – are a viable solution today.