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Larger cultural shifts are at work, too, as the long-promised innovations offered by newer technologies like the iPhone and by social networking start to take off. David Sadigh, managing partner at IC Agency, a Geneva-based online media strategy firm, said many managers of luxury brands in Europe initially looked askance at social media, but were galvanized by reading in the European press about the Obama campaign’s success with it. “The bottom line is that if the President of the United States was being elected in part for his ability to communicate and leverage social media, then luxury brands could also use to it to create connections,” he said.
Still, he added, not only are luxury companies cautious about stewarding their brands and keeping them in the “right” environment, they’re still figuring out how to maintain the sense of exclusivity that has long been a selling point in the fundamentally open and democratized medium that is the Internet. (As a result, some of his clients have had success with affinity-based online clubs, made easy by the Internet, but with the exclusivity conferred by membership.)
It’s no wonder that, as Hauser put it, “mass retailers were early adopters. A lot of the things they’re asking for are much more sophisticated, with a more granular target” than those of luxury brands, which are supposed to be the ones at the cutting edge. Thus retailers are buying more customized Web elements, such as customized video or editorial on Web sites. At People, J.C. Penney Co. Inc. recently sponsored a customized Hollywood hangman game on People.com.
At Condé Nast’s Style.com, H&M sponsored the site’s debut iPhone application in September, which allowed visitors to view photos and reviews of the collections, and debuted a similar application for Men.style.com.
In other cases, some retailers are investing in their own Web content in an effort to lure more shoppers to their sites, further eating into budgets that once would go to advertising. Banana Republic recently launched its “City Stories” spring campaign featuring nine emerging musicians including Sara Bareilles, Liz Phair and David Sanchez. Included is a new microsite on bananarepublic.com that includes behind the scenes video about the musicians, along with music downloads and shopping offers. In addition, the retailer also created a partnership with iTunes to offer a customized album of the artists’ with an in-store purchase.
Michael Kors has been experimenting with paid search, said Billy Daley, vice president of global communications, based on the understanding that consumers tend to shop by typing, say, “Michael Kors sandal” into Google. The company is trying to ensure that its own site appears atop that list. Oscar de la Renta has also had success with e-mail marketing, said O’Regan.
None of this necessarily means that Vogue, Vanity Fair or any other glossy magazine will see the high-production-value campaigns that are their bread and butter vanish.
“Print isn’t dead. The traditional message is still a valid one,” said de la Renta’s O’Regan. “That’s not to say online won’t take a bigger market share in the years to come.”