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How has the internet and social media affected the development of luxury brands and how can you measure it's effectivity - Assignment Example

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How has the Internet & social media affected the development of luxury brands and how can you measure its effectivity? Authors note: The author has knowledge about luxury…. Etc… Abstract Initially, the concept of luxury brands venturing in the online platform to conduct their transactions seemed as an impossible mission not only to managers but also to consumers who had the same view…
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How has the Internet & social media affected the development of luxury brands and how can you measure its effectivity? The hasknowledge about luxury…. Etc… Abstract Initially, the concept of luxury brands venturing in the online platform to conduct their transactions seemed as an impossible mission not only to managers but also to consumers who had the same view. However, this has changed and now the online market is radically increasing with numerous people looking for the luxury feeling where they receive special treatment as well as a special feeling. Numerous brands have decided to use online communication with the intention of increasing their market share and dominance because it is the new way in reaching the global market. The aspect of E-commerce has managed to expand the luxury companies from what they were initially, before the introduction of social media. Luxury brands for many people are not just flashy items worn by those in high social classes but unique and also more common to those in lower social classes. Those items hold an identity that occurs as a culture or a philosophy. At the inception of E-Commerce in the late 90s, there were still mixed opinions regarding the luxury sector. Managers from luxury firms held the opinion that luxury would never sell online and consumers shared this same view (Geerts, 2013). The reasons are seemingly straightforward. First, use of the internet was still not yet that common and for that reason people were not willing to spend fortunes on the web. Furthermore, it is also hard to feel and more importantly to evaluate a luxury product while sitting in front of a monitor. Let’s begin by establishing a definition of luxury and the type of products defined as such... Fashion and accessories are the focus of this paper. Then, there are leather goods, wines, jewellery, watches, cosmetics, cars, types of air transport and also hospitality and concierge services. These are only a few examples of industries that produce luxury high end products or services. Luxury comes from the Latin word luxus, which stands for indulgence or glory (Maisonrouge, 2013). History would view these products as any that would be used to show respect to one’s god or used by a King to demonstrate power. It is something very unique that only a limited number of people are able to afford or possess. Lastly, and this applies particularly to the contemporary world, luxury can also be about appreciating time, about being alone or about having the opportunity to explore new things. For that reason, shopping online is very practical. It is fast, always accessible and open for business, permanently adds new items to stock and finally makes it much easier to manage time that remains for more important things than shopping (Maisonrouge, 2013). In today?s world, where everything is changing very quickly, there are numerous daily interactions with new people and I believe that the interest in buying luxury items as well as having a feeling of security wearing them is increasing drastically. The feeling of being a part of the trend and also the feeling of buying luxury online as well as offline, is contributing to luxury being more accessible to the public. Most luxury merchandise revenues globally have augmented from 173 billion € in 2010 to 212 billion € in 2012 (Altagamma, 2012). In this case, I would plan to investigate the manner in which websites or social media change both the buying power and people’s perception concerning luxury products. I would only achieve this on a profound point of view when I integrate statistics of how many consumers now purchase luxury items through social media or other internet platforms. In addition, I intend to look on what aspect of a luxury brands is lost when corporations decide to integrate social media (Seringhaus, 2005). This is by deeply looking on how many companies that deal with luxury items have embraced the internet as a major platform for selling most of their products. For instance, Seringhaus claims that the internet has diversified the sale of luxury products in recent times. He claims, a recent American study proves that internet has the most influence on luxury purchase desicion making over other media platforms (Seringhaus, 2005). Evidently, internet gives a good purchasing power to varied consumers of luxury products compared to other platforms. Brands especially those in fashion industry are trying majorly to keep the internet at arm‘s legnth. This is obvious by little enthusiasm relayed by some of european luxury brands dealing in fashion via internet platform though currently they have started tremendouslyincluding it (Kemp, 2009). On taking a closer look, I realised that social media is actually the buzzword for many luxury brands. In fact, luxury fashion brands have increasingly invested in social media over the past few decades. Mainly, this is because many people who tend to follow fashion trends for various reasons are majorly the young people up to 40 years old, who are the majority when it comes to using social media sites (Phan, 2011). To begin with, I would like to start with the following statement by Okonkwo. “Luxury is neither a product, an object, a service nor is it a concept or a lifestyle. It is an identity, a philosophy and a culture(Okonkwo, 2009).” In saying this, the word luxury takes on a very exclusive meaning. To return to the prior historical discussion, when a King in former times had something made for him it was something that was produced solely for him. It was a symbol of status and even respect. The king in former days or anyone else for that matter, was judged by the things he owned or by the comforts he had owning these items. In this way, luxury services or luxury items simply became things that are deemed very special and furthermore, rare. The latter is then something for which the demand is very high, but in fact, cannot be supplied to the masses because either the price is prohibitive or it cannot be readily supplied for reasons such as the time it takes to produce. In a nutshell, “the function is rooted in the social classes of the past civilisations and societies when royals, nobles and aristocrats used ostentatious consumption to stamp their superiority and maintain their distance from the lesser privileged” (Okonkwo, 2009). This said, still in today’s world, everyone wants to distinguish him or herself from others and in most cases it has to do with what someone owns. For obvious reasons, the easiest way to distinguish is shown by what one wears and it often also communicates a lot about how someone feels and the background of a person. (Okonkwo, 2009) Luxury then basically has the same position in today’s world as it used to have in earlier days. Importance of internet to business In connection with the discussion of the Internet, I would like to state that a lot of luxury brands haven’t incorporated the Internet as a form of communication yet or are just introducing it, while others are already more advanced. In most cases, one will find that services are the most likely luxuries sold on an online platform like travel destinations and hotels (Phan, 2011). As the Internet has developed enormously over the past years, it can only be stated that it is a major communication tool for many corporations. The best thing about it is, that everything done online can be measured besides it is very easy to measure it. And secondly, everything is just one click away and by saying that, I mean that everything is interlinked and everything can be accessed by anyone who has access to the Internet. For instance according to statistics, over 85% of the world population can access the internet and half of them purchase varied necessities via the internet. For instance, while a person is browsing through the internet, he or she can adequately visit any website dealing with certain products to view them. In order to purchase them a person needs only to click on the selected product to get all the necessary information about it and begin transaction processes. From the previous statement, it is evident that the number of those owning Internet, enabled gadgets like PC’s Ipad’s, Iphone’s and so on is rapidly increasing just like online shopping and purchasing. For example, as the Internet population continues to show a rapid growth, it in turn triggers the aggregate online purchasing power to increase (Seringhaus, 2005). Brands can use the Internet to get across all of their information. In order to do so, there are social media interfaces, brand websites, and then there are also online shops, where with simply one click you can fill your basket with beautiful handcrafted products. As already mentioned before, it is not normal for the luxury sector to have a website and in fact, Prada and Versace for example did not have a corporate website until about six to eight years ago (Okonkwo, 2009). The latter information makes one wonder why luxury brands selling is not completely utilizing the internet platform as expected. In the International Journal of Management and Marketing research, Geerts clearly explains, “there is a big difference between the luxury marketing features and the internet features itself. Luxury marketing involves Service, POS experience, consumption experience, individualised sales, only in prestigious venues and the price is rarely displayed. The internet, on the other hand stands for international accessibility, few or no contacts, limited service, limited buying experience”(Geerts, 2013). As for example, already more than 25 of the Colbert Committee Brands offer e-commerce, there is a big trend in an increase in the next years. While luxury brands are actively venturing into conducting their operations using online platform, their actions bear varied merits and demerits to the luxury business. For instance, use of social media to communicate to the broad mass by luxury brands is proving effective with a significant increase in sales (Google, 2007). For instance, Natalie invests in the online platform and social media to reach more women who are their target group in the population (Google, 2007). However, use of all this platforms gets rid of the luxury culture of the products. The products being open for people of all social status does not make them as luxurious as they were before. How can the luxury sector control the phenomena that its products remain extravagant, when connecting the exclusivity to the Internet? Conducting E-commerce requires a lot of care on the internet by the luxury companies. This is because Internet characteristics usually make it adapted to channel the both, distribution and communication to the mass audience. For instance, aspects of interactivity, intelligence, individualization, accessibility, absence of contact and loss of control, comprise vital issues that companies have to consider (Maisonrouge, 2013). Through the latter two characteristics and marketing strategies of luxury products, one realizes the two are not compatible. For this reason, some brands are still reluctant in using social media in selling their products. Since 1990s, managers of high profile luxury brands together with consumers held the same opinion luxury products could not sell online for various reasons. According to them, it was also hard to feel and more importantly evaluate a luxury product while sitting in front of a monitor. In addition, many thought luxury products must be expensive products rarely found and sold with special care. This explains the reluctant behaviour of some brands not getting their products online. Brands can use Internet to relay their information with the intention obtaining more clients. This is via social media interfaces, brand websites besides online shops, which only require click of a mouse for a person to fill basket with preferred and beautiful handcrafted products. Contrary to the past, numerous brands are currently getting their products online due to the large pool of clientele especially in social media where youth is the majority. However, this aspect is not that evident when it comes to luxury brands whereby some have already incorporated it and far advanced while others are still starting. References Altagamma, B. A. (2012). Personal luxury goods Revenue Worldwide 2009-2012. 2012 Luxury Worldwide Market Study . Geerts, A. (2013). Cluster Analysis of Luxury Brands on the Internet. International Journal of Management and Marketing Research, 6(2). 79-92. Google. (2007, May 29). Natalie Massenet at Zeitgeist Europe 2007. [Video file]. Retrieved from Kemp, M. B. (2009). Luxury Brands must balande accessibility and exclusivity. New Media Age , 07. Maisonrouge, K. P.-S. (2013). The Luxury Alchemist. New York: Assouline. Okonkwo, U. (2009). Sustaining the luxury brand on the internet. Journal of Brand Management, 16 (5/6), 302-310. Phan, M. (2011). Do social Media enhance Consumer's Perception and purchase Intensions of luxury Fashion Brands . Vikalpa: The journal for Decision Makers , 36 (1), 81-84. Seringhaus, F. R. (2005). Selling Luxury Brands Online. Jounral of Internet Commerce, 4 (1), 1-25. Read More
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