KOREASCHOLAR

Introduction Luxury is an intriguing and alluring concept. The word ‘luxury‘ is used very often in advertisement, indicating something positive, some-thing worth striving after, something worth desiring. This thesis will focus on how luxury, and particularly luxury brands, are created, represented and consumed in an online environment. The Internet has proven to be of great importance for many types of brand when it comes to communicating and providing information to consumers and potential consumers. Luxury brands, however, work on different premises than other brand categories. Thus, luxury brands on the Internet would seemingly be an oxymoron. Given the growing importance of the luxury goods industry in economic terms and the increasing scholarly interest for not only the phenomenon of luxury brands but also luxury brands online (c.f. Dall‘Olmo Riley and Lacroix, 2003), it would seem that more systematic research is warranted on how brands, and luxury brands in particular, are handled on the Internet. The consumption of luxury brands, as opposed to the consumption of physical goods, lies in the difference in ownership. A luxury brand can be ‘consumed’ without the actual owning of a physical good produced by the brand. This type of consumption is instead a sort of merging of the consumers‘ view of themselves with their image of the luxury brand. This relatively new way of viewing consumption is of central importance when viewing brands online. The virtual ownership or ‘consumption‘ of luxury brands also brings with it new forms of expressing ownership or kinship with the luxury brand, as well as with other types of consumer sharing in the affection of a brand. The problems facing luxury brands, is best summed up in the ‘luxury brand paradox‘, in which the core is a balancing act. In this balancing act, the perception of exclusivity surpasses that of actual scarcity. The perception of exclusivity has to be invoked in consumers for the luxury brand paradox to maintain equilibrium. If (or perhaps when) there was an actual scarcity to luxury goods and luxury was truly limited, the consumption of luxuries was quite different from the consumption of luxury brands today. The clicks environment The clicks environment has brought with it not only new ways for brands to communicate with consumers but also for consumers to ‘consume‘ the brands. The following aspects will be emphasized the rise of the Internet and its characteristics, the business logic that is emerging from this, consumers on the Internet and new communication patterns. New to not only luxury consumption, but also retailing and consumption is the entrance of the Internet as a means of distributing, marketing and gaining information on goods and services. The advent of the Internet brought with it a frenzy for no-name and generic brands, as well as some high-priced, status brands to not be left behind in incorporating a clicks environment, with many luxury brands jumping on the bandwagon. Many luxury brands can thus now be viewed and, to some extent, purchased online by anyone having access to a computer. Luxury brands are presenting themselves online and communicating everything from designer influences to products and prices and store listings. On the Internet, old trusted methods cannot be used to the same extent and the migration to an online environment will inevitably bring with it new problems as well as intensify some old ones: the perception of scarcity is harder to create. Maintaining the balance between maximizing profits and evoking feelings of exclusivity is one of the most important tasks for luxury brands. The creation of perception of exclusivity or social desirability in a luxury context is the basis for non-functional demand. This is a balancing act that comes into greater focus with the entrance of the Internet. This research examines the new business logic in the clicks environment from the problems that arise for luxury brands in particular. For mass-producing brands, the clicks environment does not pose the same kind of threat as it does for luxury brands. The cost of marketing could be lowered by using the means provided by the Internet and giving access to products to many new consumers, something that in the case of luxury brands can be a danger. The specific nature of luxury brands and the new business logic on the Internet generate new challenges as well as opportunities. The Internet environment brings with it the fact that luxury brands can be not only consumed but also represented and created in a widely diverse environment. This requires a specific way of viewing consumption, which will be explored in this chapter Representing, creating and consuming luxury brands online The luxury context has been changed with the entrance of the Internet, challenging luxury brand management and forcing luxury brands to act in new ways. Where the borders were previously stricter and the consumption of luxury brands was solely an act between company and consumer and luxury brand identity was communicated from company to consumer, with rather few distractions, the Internet gives rise to many other constellations. The creation of brand image is thus now intertwined and overlapping. For luxury brands to be consumed online by consumers, they have to be represented online. Although the representation can be officially either by the brand or by others, it is when ‘others‘ get involved in luxury brand representation that the preconditions change. The online representation of luxury brands is a basis for luxury brand consumption, but as will be explained later, the consumption taking place online does not have to involve purchase of actual physical goods. Brands can, to a certain degree, be ‘created‘ online as a luxury brand or status brand, all depending on the processes surrounding the brand in question. This research starts with the presumption that the luxury context is changing with the entrance of the Internet and that luxury brands are now exposed to new challenges in which the luxury brand image is more elusive than ever. The Internet has become a valuable communication tool for brands in their endeavor for a favorable and prosperous brand image. However, the belief is that as a communications and distribution channel the Internet has led to changes in the market structure as well as changes in producer and consumer roles (Peterson, et. al., 1997; Prahalad et. al., 2000). To be able to be viewed and purchased online would seem an ideal situation if not for the inherent paradoxical nature of the luxury brand. Luxury brands face several challenging problems within the online context. Online rarity The term luxury rests on certain assumed connotations, such as the ‘rarity principle‘, meaning that the rarer the good, the more desired the commodity is (Phau and Prendergast, 2000). With the Internet as a distribution channel, the ‘rarity principle‘ may be lost when the brand can be not only viewed and desired but also consumed by all. According to Dubois and Paternault (1995), the prestige of the brand may be eroded if too many people own it. The possibility of online purchase may give opportunity for the ‘masses‘ to consume these products and the company can maximise its profits and sell even larger amounts, something that would, however, be in sharp contrast with the need of luxury brands to maintain a fragile equilibrium between high exposure and awareness but a controlled level of sales (Roux and Floch, 1996 in Dall‘Olmo Riley and Lacroix, 2003). It is also feared that the possibility of purchasing luxury brand goods online could give greater opportunities for counterfeiters to sell copied merchandise as ‘original‘ merchandise. Studies have shown that price and price discounts are very important factors in online purchasing and when revisiting a website. Luxury brands online thus face problems, largely because they do not compete with low price or price discounts. Consequently, online distribution pro-vides a challenge. How do you make consumers buy the much more expensive genuine product instead of a cheap counterfeit when many of the core elements of the luxury brand are lost online? Another problem is the ever-increasing product range of luxury brands. Because many luxury brands today include all sorts of products, this makes it harder to distinguish counterfeit copies from the original. This is a problem that could devalue the brand and increase the temptation for consumers to buy cheaper ‘knock-offs‘ or counterfeits‘ online. de Chernatony (2002:186) suggests that brand strategists need a new mental model to "develop integrated brands in a digital age which goes beyond the classical and which recognizes the new roles consumers are taking". New roles for consumers are an important fact for luxury brands in that consumers are more involved in creating a buzz for certain brands, engaging in reviewing, discussing and sharing opinions online. The online environment and the challenges to luxury brands that follow show a significant change in the business logic. The new business logic on the Internet, with the consumption of brands instead of actual goods, is problematic for brands in general and for luxury brands in particular. The specific problems regarding luxury brands are seen in relation to the previously described inherently difficult luxury brand paradox. The problems arising from the very scattered Internet context for luxury brands are many, as well as interrelated. Empirical contributions There are four main groupings of websites that have been examined: (1) brand websites, (2) consumer-to-consumer sites, (3) communities and (4) Replica sites and such. (1) The first type of sites is the sites that are officially connected with one brand, multiple brands or a conglomerate. In this category ‘umbrella‘ sites are also included, which can be directly owned by a luxury conglomerate (such as eluxury.com, or sites such as prêt-a-porter.com or yoox.com that sell a wide range of upper-range and luxury brands). (2) The second type of site is the online auction site where consumers sell to consumers, or in some cases, an organized firm conducts the selling. This type of site is not associated with the luxury brand. Although somewhat separate from the community website, this type shares many of the characteristics of the community websites, including being mostly consumer driven and not directly affiliated with a luxury brand. Thus, the auction websites are grouped together with the community websites. (3) The third type of site examined is the community websites. These come in different forms, ranging from sites associated with fashion magazines in which involvement only can occur on an observer or viewer basis to communities discussing all aspects of fashion and luxury to community sites dedicated to identifying the brands celebrities are wearing. The sites that are the online version of fashion magazines can be viewed only with possibilities to receive weekly (sometimes daily) fashion updates and newsletters, include chat possibilities and bulletin boards, and in some cases have limited product sales. (4) The fourth type is the website that sells replicas or counterfeits. In this category sites that rank and review sellers of counterfeit merchandise are included. Conclusions Four themes on the sense of a luxury brand have emerged throughout this research. The themes show how the sense of a luxury brand is created in an online environment. The four themes are luxury history, authenticity, community and paradox. Luxury history refers to the stories (either real or thought up as marketing campaigns) told by luxury brands, as well as the history that is thought up of and shared by consumers of the brand. Authenticity pertains to the need for luxury brands to have authenticity and genuine products in the sense of having reputable and innovative designers to repel counterfeits. Community concerns the different types of community formed online, i.e. communities formed for a particular brand or other common interest. Paradox relates to the inherent problem for luxury brands to create desire and appeal (and hence the power to sell a particular product) while simultaneously giving the perception of uniqueness. Paradox also refers to the contradictory workings online in the creation of a sense of luxury brand. As has been revealed through the empirical data, the online environment for luxury brands is an environment for communication and interaction, an environment that is both lively and active. The online context is comprised of many different elements that are interwoven, making up the platform for luxury brands online. This is seen in not only the different people involved in the online context but in some instances also the changing roles they play and the often multiple activities that they perform. This is because the luxury environment is made up of these sometimes very different yet interlocking elements. Examining the data from different perspectives and by comparing them to previous research on brands, luxury and the Internet the conclusion is that a new and exciting arena for luxury brands and their consumers emerge, an arena that will be referred to as an online fair. The online context is a highly scattered and chaotic environment that exhibits a scope of different characteristics. These characteristics resemble those pertaining to a fair. Definitions of a fair can range from describing the display of farm animals to entertainment and amusement. The common denominator is the key-concepts of display and the people there to see the display or to be amused and entertained. The online fair embodies different actors and activities that will be described together with the special environment of the online fair. The actors that are identified in the online fair are the audiences, the exhibitors and the copycats. The activities performed by these three groups are exhibition and display, sales and trade and entertainment. Finally, the online fair environment is characterized by its globality, openness, accessibility and fuzzy boundaries. As opposed to many bricks-and-mortar fairs, the online fair requires no entrance fees. Neither does it have strict admission controls based on special invitations, as is often the case with luxury fashion shows. The online fair is instead open and accessible to all. The audience in the online fair encompasses various consumer types and how ‘active‘ a consumer or potential consumer is, is not dependent on his or her status as an ‘actual consumer‘. The online audience also serves as reinforcement for consumers with regard to postpurchase feelings. Given that the online fair is open to anyone, there will inevitably be those wishing to profit from someone else. In this context these ‘tricksters‘ would be counterfeit sellers trying to profit from the luxury brand image.

• Anita Radon(University of Borås, Sweden)
• Malin Sundström(University of Borås, Sweden)