The Financial Times reports that Burberry will soon launch its own social networking site, to be called Art of the Trench. This is a major step that all brands will be watching, because the future of brands will be written with personal platforms and social media. A Burberry social network could be a pioneering and potent force in advancing the Burberry brand, and its customers.

Brand strategy and social media

In this post I’ll take a quick look at the brand strategy and social media options available to Burberry in its new initiative. In large part, at least as I see it, the challenge for Burberry goes far beyond social media proper. It’s a challenge of brand innovation. Does Burberry intend to pour old marketing wine into this new social media bottle, or will it use social media to reinvent its brand to create new customer value? That’s the big question.

Pre-launch site and Burberry context

Here is Burberry’s pre-launch site, to give you a flavor. From reports, the new network is intended to make Burberry more attractive to customers by providing a Burberry-themed platform for social communication and interaction. Burberry already has 660,000 “friends” on Facebook to draw from.

For some Burberry context, watch the 9/16/09 “Customer of the future” Financial Times video interview with Burberry CEO Angela Ahrendts here. (Actually, watch the entire set; it’s illuminating.)

Burberry customers and the site

Burberry intends the site to be a form of online brand experience for customers.

“These might not even be customers yet. Or they may be a customer for a bottle of fragrance or for eyewear. But these are the customers who need the brand experience, who need to feel the brand. That word-of-mouth spreads through their social networks and continues to be a positive conversation [about Burberry] . . . that is so powerful.”

Source:  the FT article above.

Post pictures of yourself in your Burberry trench

At this point we don’t know the full extent of Burberry’s “social networking site.” Will it operate like a slimmed-down, brand-focused Facebook, or will it be more of a (conventional) fan site. Initial reports say the Burberry network will enable Burberry customers to post photographs of themselves in their Burberry trench coats. That seems more like fan site territory, the low end of social media. (The high end is collaboration and value co-creation.)

Potential downsides of a fan site approach

To the extent that Art of the Trench becomes a fan site, (not that it would) what are the brand downsides? The biggest downside is the opportunity cost for missing the possible brand advances through a real social network, especially one focused on value creation. Beyond that, fan sites can be brand limiting unless customers themselves are allowed to show their creative modifications to brands, or brand uses. Is Burberry open to customer mods?

The brand is more than the clothing

If Art of the Trench focuses on pictures of customers in Burberry coats, one might then ask, “What’s the sustaining attraction?” The clothes are the same. And how will all those blurry amateur pics represent Burberry’s chic fashion sense, not to mention its exacting quality? Loopy pics might damage the brand. Finally, how deep is the customer “brand experience” in seeing photos of others in Burberry outfits? Might this undercut the Burberry identity so ably set forth in exquisite photos and videos of Burberry-adorned models?

Brand strategy first, social media second

Many brands (like Burberry) are moving beyond traditional mass-market advertising toward networks powered by social media. That stands to be a positive shift, but only if it’s anchored in a customer-focused brand strategy. It’s brand strategy first, social media second. There is no social media magic that can make a brand “come alive” from below. A brand cannot flip a social media switch and expect a stronger brand to bubble forth, like Champagne from water.

This raises another question for Burberry’s new networking site: What are the terms of Burberry’s intended brand engagement?

Social networks are not old marketing in new bottles

For brands, the value of social networks is that they have game-changing potential to create new customers and new markets, beyond old marketing structures. Thus the promise of Burberry’s initiative. As many companies also realize, social networks entail a culture change in brand approach. Pouring old marketing wine into new (social media) bottles won’t work. An “old” marketing approach will view social media as nothing more than a new sales and PR channel. In effect, social media becomes “social media advertising and PR,” a platform for using customers to advertise to themselves. In this “advertising from below” approach, the only connection desired from customers is the sale.

Unfortunately, when companies reduce social media to this level, brand trust often dissolves as customers perceive themselves as being (cynically) used to sell things to their friends.

In social media, the customer is an ally, not an “audience”

Companies are beginning to understand that the brand transition to social media ultimately involves a re-casting of the customer relationship. In social media, the customer is an ally, not an “audience.” The audience model is a carryover from obsolescent marketing thinking, as if the brand were an “act” in front of a crowd. A brand that considers customers an “audience” often finds itself resorting to theatrics to make an impression. Do these work? They can, for a time, but at the cost of a stagnating brand on a shrinking stage.

As allies, customers can add value back to the brand—many times over. It will be interesting to see how Burberry handles the “customer audience vs. customer ally” question.

A potential pitfall: Burberry outlets

One concern for Burberry is that members of its new network may be bargain hunters that flock to Burberry’s factory outlets. This outlet mentality can turn the brand conversation into a downward spiral of discount and price, where the hot topic is, “What’s the best deal?”  The network can then become a force for commoditizing the brand. As soon as someone saves big bucks on a particular item, the entire network will know it, and may shop on price accordingly.

Setting the Burberry brand agenda

One question the official launch will answer is, “What’s Burberry’s brand agenda?” Burberry’s brand agenda will guide its customer approach, and will help answer most of the questions above. For more on setting the brand agenda, see here.

The Burberry brand journey

Perhaps the easiest approach for Burberry is to incorporate social media into a Burberry brand journey. In this strategy the brand becomes a force for joint cultural innovation with customers. Burberry leads this (shared) brand journey as a creative, social, moral and cultural driver in defining new horizons for its customers. In this role Burberry is “out of the closet” and into the veins. Burberry becomes “innerware” instead of “outerware.”

In this option, social media plays a key role as part of personal brand applications.

A Burberry smartphone app?

Burberry might also develop a smartphone app to give its customers unique cultural advantages beyond the merchandise. What might these be? A leading brand of style and fashion would surely know.

Note: I’ve covered related issues in Twitter and brand strategy.

Photo:  nino63004 — Flickr

At the recent International Herald Tribune Conference on Luxury there was renewed attention directed to the creation of “eco-luxury” and “ethical-luxury” brands. These terms might seem like a stretch (or even oxymorons) to some, but luxury brands, which currently base their appeal on exclusivity, status and celebrity, can’t afford to ignore well-informed, well-off customers who demand higher standards of environmental and ethical responsibility. These customers are fast becoming vital markets.

Glitz and glamor isn’t enough

For today’s luxury brands, it will take some real work to fit “luxury” onto the same value platform as “ecology” and “ethical.” That’s because ecology and ethics are radically different avenues of value creation than glitz and glamor. Thus, the industry needs a revised brand approach to take this next step. The good news is that iconic luxury brands themselves hold the key to a successful transition.

The risk: luxury brands disrupted from below

What’s clear to me is that the luxury industry must take this transition seriously. If it can’t forge a deeper connection with the values that underpin environmental and social responsibility, luxury brands face a real threat of being disrupted from below—by a new form of luxury that uses ethics and ecology to make “traditional” luxury brands irrelevant.

The luxury industry has been totally transformed once, from small, family-owned workshops into a global marketing machine. There’s no law that says it can’t be transformed again.

Luxury brands don’t have the luxury of time

One thing is certain: luxury brands are on the clock. They don’t have the luxury of time to slowly and opaquely evolve their commitments to ethics and ecology. They are now being held accountable for their actions, just like the Gap’s, Nike’s and Levis’ of the world have been for decades. The world is waiting to see how passionate and creative luxury brands can be when the human condition and the environment are at stake.

A luxury scorecard

Shortly before the IHT conference a unit of the World Wildlife Fund published an in-depth social responsibility scorecard on the top ten publicly traded luxury firms, ranking them on 50 criteria in four categories: environment, human rights, corporate governance and stakeholder relations. The results were not pretty. The highest corporate grade was a C+ (received by three firms), while two firms received F’s. The full survey is worth reading. For a summary, see the Financial Times account.

The bottom line is that luxury firms, paragons of product quality and taste, must now become paragons of social responsibility. From brands of world-class excellence, one would expect no less.

Not a masquerade

Granted, it will take definite brand innovation for brands traditionally associated with self-indulgent elites to become brands of ecology and ethics. For luxury brands to gain credibility in these areas, their commitments (and actions) must be the real deal, not a masquerade. This would rule out commitments richer in words than deeds. If luxury brands appear to be faking their new commitments, they may be viewed as counterfeit, potentially falling to the same level as the shameless replicas that haunt their own business.

Let’s now see what the IHT conference produced.

“We need to replace hollow with deep”

From the IHT report:

The luxury industry, a booming business for the last 20 years, is positioned well for continuing spectacular growth – Bernard Arnault, chairman of LVMH, predicted a doubling in the next five years to €300 billion – but needs to heed the growing ethical concerns, particularly of younger consumers in Western markets, industry leaders said Wednesday.

Arnault and the next speaker, the designer Tom Ford, also gave strong emphasis to what is being called “ethical luxury” – the products that define their owners or wearers as people with human and ecological consciences.

Arnault said the trend was increasingly noticeable among the younger customers in the more saturated markets of the West, who, he said, seek discretion, while consumers in emerging economies still favor the pursuit of the ostentatious.

I especially liked this quote from Tom Ford:

Ford summed it up starkly: “Luxury is not going out of style. It needs to change its style.” He added, “We need to replace hollow with deep.”

A model for “going deep”

A brand that intends to demonstrate deeper commitments to social and environmental issues will be expected to adopt specific program measures to define and achieve its goals. These would answer the question: As a brand, how can we lead in the effort to advance ecological and social responsibility?

At a minimum, typical measures would include:

1. A statement of principles, or a charter,
2. Goals and objectives
3. Codes of conduct for the brand and its suppliers
4. Executive responsibility
5. A means to work with customers, partners and suppliers to achieve the new aims.

These can’t be produced overnight, of course, but they’re needed to make ecological and ethical commitments a core component of the brand—so the brand can make a (legitimate) stand.

For now, a shallow start

The quotations cited above indicate that the luxury industry—as represented by those quoted—may initially intend to “go deep” by a succession of fairly shallow steps. The emphasis seems to be more on appearance than substance.

For example, it appears that “ecology” and “ethics” are being framed as style attributes to the brands themselves, rather than practices deserving real commitments for the companies behind the brands. It’s as if the products would be tweaked to represent ecology and ethics—using design, naming, creative promotions and associated campaigns—while the industry itself carries on with business as usual.

Is defining a “conscience” enough?

Thus, in this approach a luxury brand might feature “products that define their owners or wearers as people with human and ecological consciences.” On reading this quote, however, one rightfully asks: Is that what the industry commitment to ecology and ethics is all about? Is that what people want: products that make them look like they really care about ecology and ethics? The approach implies that the intended buyers are superficial, caring more for appearance than substance.

Two strategic weaknesses

At this initial stage, there are two strategic weaknesses in the luxury industry’s apparent approach. Both stem from making the brand a sales tool, rather than a means to create customers:

1. Instead of joining with customers to help resolve outstanding ethical and ecological issues, the industry seems to be positioning itself to make buying luxury products a substitute for responsible social action. This raises doubts about the depth of its actual commitment, and its reliability as a brand partner.
2. This apparent approach restricts luxury brands to a messaging model driven by media campaigns, as opposed to a value-based model in which the brand becomes a shared mission between company and customer, across many levels of interaction. The latter approach creates more platform opportunities for brand expansion.

Or, put another way, if the purpose of your brand is sales, your brand will sell you short. Sales-driven brands are not strategic; they lack the active customer components to discover new markets.

The key: invoke iconic brand integrity

Luckily, a strategic approach is well within the grasp of the luxury industry. The key is to invoke the brand integrity of its artisan founders, the integrity that made the brands the icons they are today.

Brands exemplify. The implicit pledge of every luxury brand is this: The closer you look, the better we look—by far. The luxury brand is the standard, and the steward, of the highest forms of living.

Yes, the luxury industry’s iconic brands can provide the direction and guidance it needs to successfully compete on social and environmental issues. Luxury brands were born in the passionate craftsmanship of master artisans. They epitomized the best that human hands and ingenuity could produce, without compromise. Those values defined the heritage of the brand, and its (uncompromising) brand integrity.

(Brand integrity: how a brand’s actions fulfill its identity, and its mission.)

The task at hand, then, is to scale the quality vision of the iconic luxury workshop to the wider world where luxury brands operate today.

Brand leadership—without compromise

Today the luxury landscape is global, but if luxury brands invoke the heritage of their provenance, they can extend their passion for excellence and quality to issues that affect their wider landscape, such as ecology and social responsibility. That’s precisely where a luxury brand would lead, and not make compromises.

Luxury brands reign as preeminent world citizens. From that stature one expects world-class craftsmanship, and citizenship.

Disrupting luxury brands from below

Luxury brands that lose touch with their iconic brand integrity place themselves at a strategic disadvantage. They may open the doors for competitors with more relevant brand platforms—platforms that may redefine the very concept of luxury itself. This new luxury could replace self-indulgence and store-bought status with a culture of “connected luxury” that aligns a carefully-crafted essence of the individual with an equally fine-tuned essence of his or her environment, both physical and social.

In this new realm, luxury is not for sale. It is a cultured result of issues, actions and things that are cultivated, nurtured, prototyped, tested, shared and worked on endlessly, face to face and in the digital atelier, aiming for completeness in quality of life.

Luxury networks

In this new luxury model there is no intent to compete directly with luxury conglomerates and their outlets in every major city and airport. Luxury is redefined as quality of life, not quality of marketing. This would be a global brand network, with customers at the hub, optimized to individual interests and tastes. This is not a network of “shoppers” but a network of brand collaborators.

Because they’re cultures, these new luxury brands are socially-driven, rather than marketing-driven. Of course, they start at the very bottom, like raw materials in the workshops of artisans. That is their key to innovation, and their strength.

The Wall Street Journal and other sources report that Ford is exploring the sale of its Jaguar and Land Rover units as a way to trim money-losing operations. Ford spent billions of dollars to acquire the two car makers in 1989 and 2000 respectively, spent hundreds of millions more to upgrade and market them, but never figured out how to create new customers for the famed marques.

Why didn’t these expensive and highly visible acquisitions pan out for Ford? Here are some thoughts from a brand value perspective.

Brands are married, not “bought”

Brands flourish as shared passions between maker and buyer. Customers marry a cherished brand more than they “buy” it. It’s an emotional plunge. If a new corporate owner doesn’t have a deep and abiding passion for what makes the product and its customers tick—the living connections that infuse every aspect of the brand relationship—the new corporate brand marriage may be dysfunctional, or even sterile. Brands are a joining, from top to bottom. So, perhaps Ford’s biggest mistake was its approach to “buy” the brands in the first place, when a more physical relationship was called for. It arrived with spreadsheets instead of silk sheets.

Intensify the brand, or lose the brand

Great brands like Jaguar and Land Rover live by their own logic and passion. They create customers in their own image. This is a process of brand intensity, a reduction to pristine elements of heightened existence. If a new corporate owner makes a brand more of what it is, unleashing potential locked within, then the brand can thrive anew, as in BMW’s glorious resurrection of the Mini. But if a new corporate owner believes that buying a famed brand is nothing more than buying a selling point, the brand can lose its vision—for itself and its customers. Customers—always the brand canaries—will sense this in a heartbeat.

The interior feels low rent and, insignificant as it might sound, the electric aerial is a joke on a car costing in excess of £60,000. Jaguar needs to look forward and to change its focus. I know many point the finger of blame firmly at Jaguar’s Ford parent company, but the Blue Oval has poured money into the firm but the excuses always seem to be the same – ‘wait until you see what’s coming next’. Jaguar has tantalised us frequently in recent years with concepts promising new directions, svelte styling and innovation like the R-D6 concept . . . a big diesel GT four-door coupé. Did they build it? Nope.

Brand dilution dilutes customers

When you marry into aristocracy, as Ford did with Jaguar and Land Rover, you join the world of dukes and duchesses. You leave Dearborn far behind. This means producing marques that are extravagant in what they do, at a price to match, rather than diluted, entry-level lines churned out for sorties to Wal-Mart. Even though Ford made tremendous improvements in Jaguar quality and reliability, one of its lasting legacies will be its platform sharing strategies that put drivetrain and suspension components from mass-market Fords into the Jaguar brand. While this was highly cost-effective, it was hardly brand-effective.

Maybe “luxury brand” was the wrong category

Ford bought Jaguar and Land Rover to gain share in the automotive “luxury brand” market, but I’m wondering if categorizing these two marques as “luxury brands” may have been one of Ford’s strategic mistakes. It landed Ford in a nest of “Red Ocean” conundrums, from which they never really escaped. In their glory days these marques were high performance brands that originally appealed to high performance customers—unmistakable individuals who were going places with verve and energy (on-road and off-road). They were expansive brands. Dragging in the feather bed “luxury” label led Ford to aim the vehicles at the early adopter Geritol set. No wonder movers and shakers stayed away.

These are brands that under a different charter might have reinvented a high performance context, with a new breed of high-performance customers to match.

Not enough Dylan Thomas

Brands are the poetry of products, and poets can give us insight into the workings of brands. Dylan Thomas’s line, “the force that through the green fuse drives the flower” is a wonderful metaphor for a brand at work, with the customer as the flower. Ford might have read up on Thomas, and worked on a new force and fuse for Jaguar and Land Rover, to create a new customer flowering. Instead they seem to have spent their money on bouquets at the florist.

Photo: Jaguar XK 150 by evercool — Flickr

Brand quality expressed as graphic quality

Go to the Rolex website, let it load (Flash) and then admire the gorgeous oblique view of the Rolex GMT II as it adjusts itself to your time—and then keeps time as if it were on your own wrist. It appears uncannily real. Everything you experience is of the utmost authenticity, right down to the minute hand passing beneath the trademark Rolex magnifying lens.

Without a single word, this tour de force visual defines the Rolex brand for what it is: uncompromising quality. Rolex could have settled for less, but didn’t. It’s Rolex. It’s not just “different,” but in a class by itself.

I’ve never seen anything like this before on the web. Have you?

Widgets must rise to the level of brands

If you’re creating widgets with brand aspirations, Rolex has set the standard. Your job is to do no less, and preferably to take it to the next level. The last thing you want to do is to reduce a brand to the level of a widget. It has to be the other way around.

Thanks to: Scott Weisbrod

Within limits, of course. From the Telegraph:

Glamour firms fined £32m for price-fixing on perfumes
(Filed: 15/03/2006)

Manufacturers of some of the world’s most glamorous perfume and cosmetics brands were fined by French competition authorities yesterday after it was ruled that the companies had colluded to keep prices high at the expense of the consumer.

Thirteen iconic brands, including Chanel, Yves Saint Laurent, Christian Dior and Guerlain, and three leading French retailers were fined almost £32 million between them for inflating prices between 1997 and 2000.

The French competition council said that under the price-fixing arrangement, a “price police” was set up between them to artificially inflate prices, put pressure on individual vendors and threaten reprisals against those that refused to apply the prices set by the perfume and cosmetic brands.

Philippe Nasse, the council’s vice-president, said that of 4,300 prices investigated by the authorities, 80 per cent were subject to price-fixing.

The inquiry was limited to France but investigators “found elements that showed the probability of price contagion,” Mr Nasse added, noting that French prices can affect those elsewhere in Europe.

A council statement said the brands in question “claimed the standardisation of prices was designed to defend the ‘luxury image’ of products”. Several planned to appeal.

Strategy issues affecting luxury brands

Irrespective of how these specific charges are settled, they raise interesting brand strategy questions for luxury brands themselves:

1. Are luxury brands inherently closed and defensive, with elaborate sets of barriers, restrictions, and gateways? If so, does this make them a Maginot Line of marketing, susceptible to flanking attacks? (Not by a conventional luxury brand, of course, but by higher forms of relevance.)
2. Is a “free” luxury brand feasible?
3. Do luxury brands ever compete on brand innovation? If not, are they painting them into a corner?
4. Can a well-managed luxury brand be “disruption-proof”?

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