As my group is now working on Amazon.com, I started to be more aware about e-Commerce. This is what I saw on my friend’s blog, and I found this topic quite interesting!The name of it is called Digital IQ Index: Luxury. You can read about it here in this website: “http://www.l2thinktank.com/luxury2010digitaliq/luxury2010digitaliq.pdf”
This is a research done by L2 Think Tank about the use of digital methods for luxury brands in their marketing approaches. As can be seen from the research, more and more luxury brands are starting to enable onlilne sales for their product. This has lead to a great growth for their business and dividends to shareholders.
However, the most interesting part for me is the part about the Big Winner category in the digital IQ index and the Big Loser category. The biggest winner category is the Fashion and Shoes & Leathergoods brands and the biggest loser category is the Watch & Jewelry brands. I would want to look into why the Watch & Jewelry category doesnt treasure it’s online business as much as the Winning category.
In my opinion, the main problem for the Watch & Jewelry category is that mostly the people who buy luxury watch and jewelry loves to have a close look at the product before really purchasing them. Buying watch & jewelry from luxury brands can be almost 5 times more expensive than buying a shirt from a fashion luxury brand. Customers tend to think twice before purchasing it. They would like to compare different products on their own hands than just comparing them online. Therefore, distance purchasing the product online through e-commerce method is not likely to happen in this industry.
Also, I think customers in the market segment of the losing category is far more lesser than those in the market segment of the winning catergory. People who follow the trend for watch & jewelry is more less than people who follow the fashion trend for clothes,shoes or bags. People like to let others know when they are using luxury brand. This can build up their self-confidence. Clothes, shoes or bags can be easier for others to see when you put in on yourself. However, how many people will really come very close to you and look at your watch or what jewelry you’re wearing. So the market segment of customers who buy watch & jewelry is already smaller than that of the fashion, shoes & leathergoods. Besides, for watch & jewelry, you can and will use it for a long long time until you purchase a new one. However, for clothes, you buy new style of clothes which you think is up to date each year. The need for purchasing products in the losing category is far more lesser leading to a smaller market segment than the winning category.
Because of these two big reasons, watch and jewelry brands do not put much effort in their online marketing approach leading to a low digital IQ index. For me, I think this result is rational and I predict that the digital IQ index for this luxury category may not have big rise in the near future.
However, this leads me to another quite interesting and challenging question–“Can this category ever make online sale more valuable in their industry? and how?”
A good brainstorming question for me to end now! =]