Guest speakers included, among many other renowned professionals, Olivier Stip, SVP of Marketing & Communication at Cartier, Marisa Thalberg, VP Global Online Marketing, The Estée Lauder Companies, Dee Devries Salomon, SVP Sales and Marketing, Condénet, Time Kendall, Product Manager at Facebook, Dennis Syracuse, SVP Retail at Sony, Milton Pedraza, CEO of the Luxury Institute, and Lewis Schiff, author of “The Middle Class Millionaire“.

SUMMARY AND SELECT TAKE-AWAY:

THREE KEY PROBLEMATICS FOR THE LUXURY INDUSTRY
As Guy Salter, Deputy Chairman at Walpole puts it, these three areas need most attention from the industry today:
1. The human dimension
The luxury business used to be intimate. Keeping the balance between exclusivity and supporting high-margin products is a very delicate process that requires attention.
2. Value and values
The value paradigm is becoming central. Delivering value has become as important as delivering quality. But defining what the brand stands for (values) has also become crucial. Competitive advantage is sustained by those companies who are most consistant about what defines them and the elements that compose their DNA.
3. Technology
Luxury brands have to make sure they follow their traditions, look back into their past and history, and take the best out of this process. But they also have to constantly innovate and re-think the way they reach out to and engage the market. As Guy Salter, states “in the process of leveraging technology most effectively, there will be winners and losers“.

Technology appears to be the central lever here because it can support the other two key problematics: 1) closed social networks designed around passions for the human dimension and an intimate experience; 2) utilitarian functionality to support added value (online account, personal recommendations, guides, etc.); and 3) Innovative media and interactivity to support the brand’s values in a compelling and enticing manner.

THE MIDDLE-CLASS MILLIONAIRE Lewis Schiff, Author
The middle-class millionaires represent a market of 9 million households circa (in the US) with a net worth of $1M to $10M. As Janet Maslin from the New York Times writes, Mr. Schiff “characterizes the group as more “referentially influential” than wealthier millionaires”.

This large group of consumers are an ideal base for brands to leverage word-of-mouth strategies and Internet platforms. In addition, for 88.8% of the surveyed households, the main driver for purchase is “value-add”. As a result, luxury brands should, more than ever, look into ways to associate to their aspirational marketing strategies compelling value-add services and initiatives.

ENGAGING SOCIAL MEDIUMS AND THE WEB 2.0 SPACE: IS THIS THE FUTURE OF LUXURY?
Panel including Facebook, ASmallWorld, Ideeli.com, This Next, Condénet, and The Estée Lauder Companies.

Among the platform providers (Facebook, ASW, etc.), everyone seems to agree that in order to create a solid brand experience and relationship with the market, consumer involvement is key. Facebook believes in the social utility to connect people, ASmallWorld focuses on exclusivity and trust, Ideeli wants to invite customers to engage in “entertainment shopping”, This Next is focusing on personal recommendations and local mavens.

Condénet is creating innovative applications, far beyond banner ads for brands to most effectively leverage their advertising venues (epicurious.com, concierge.com, style.com, wired.com etc.) for brand loyalty and client acquisition.

HYPHEN’S TAKE ON SOCIAL MEDIUMS AND WEB 2.0
We agree with most statements and strategic directions above, but with one fundamental caveat: the need for luxury brands to associate to third-party partnerships and brand promotion, more advanced in-house online venues and related strategies.

Beyond communication and brand awareness, we are convinced that the ultimate value proposition for luxury houses is to leverage their brand into high-quality client engagement, social networking, and information sharing platforms. In other words, a combination of Facebook, ASmallWorld, This Next and Ideeli but created for and controlled directly by the brands and designed for their specific target market.