Why luxury brands need social media

As a business professor teaching in France and Singapore, I have the privilege of interacting with executives spanning many industries - from food and restaurants to technology, pharmaceuticals, health, transport and luxury.

Invariably, given my interest in social media, the discussion turns to how managers integrate social media in their business strategies. Consistently, with most managers of luxury and premium brands, I get the answer that social media is not a communication tool that luxury brands should use.

Variants of this answer include that social media is "dangerous", or that "social media and luxury are incompatible". In short, luxury managers often see social media as a threat, or at best as something not very useful.

At first, this reaction seems appropriate: luxury generates value by creating distance between a brand and its consumers. That distance is necessary to create the dream associated with a brand's core value and is commonly created through the form of scarcity, exclusivity in retail, or even being in a remote location.

It is not unusual to see retailers of large luxury cars located in more remote areas than retailers of more mainstream brands. It is not only a way to mark their difference with competitors, but also to create distance with their own potential customers and signify that if customers are interested in these brands, they should make the effort to visit.