Journal of Retailing and Consumer Services 41 (2018) 37–47

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Journal of Retailing and Consumer Services

journal homepage: www. e lsev i er . c om/locate/jret c o n s er

The internet dilemma: An exploratory study of luxury firms’ usage of

internet-based technologies
⁎
Jeff Bakera, , Nick Ashillb, Noha Amerc, Ekram Diabd
a
Department of Marketing and Information Systems, School of Business Administration, American University of Sharjah, PO Box 26666, Sharjah, United Arab Emirates
b
Chalhoub Professor of Luxury Brand Management, School of Business Administration, American University of Sharjah, PO Box 26666, Sharjah, United Arab Emirates
c
Tuanguru, 570 – 1122 Mainland Street, Vancouver, BC, V6B 5L1, Canada
d
SapientRazorfish, 2nd Floor, GBS Building, Dubai Media City, P.O. Box 502372, Dubai, United Arab Emirates

AR TIC LE I NF O AB S TR ACT

Keywords: Surprisingly, there exists a paucity of research examining the adoption of Internet-based technologies by luxury
Luxury brand firms. This represents a major shortcoming in our understanding of how luxury firms maintain the image of their
Website
brand, sustain a personal link with customers, and retain an aura of exclusivity as they seek to provide their
Digital
products and services to increasingly technologically-astute customers. Using content analysis, we present the
Adoption
Internet
findings of a qualitative investigation of 92 luxury firm websites across the categories of automobiles, fashion,
Qualitative research jewelry, watches, and yachts. Study findings indicate that there are noticeable differences in website char-
Content analysis acteristics and functionality across sectors. Implications of the results are discussed, noting that decisions about
8C framework using the Internet for branding and selling, one-way and two-way communications, as well as operational and
innovative features, are driven by the characteristics of the products being offered. Avenues for future research
are also offered.

1. Introduction
The past two decades have seen myriads of firms incorporate IT into
their marketing, retailing, and customer service. One segment of the
global economy that has been slow to adopt and utilize IT, however, is
the luxury industry (Bjørn-Andersen and Hansen, 2011; Okonkwo,
2009). Luxury is a large and growing industry, with global revenues of
over $250 billion in 2013 (D'Arpizio, 2013). While growth in many
industries is being driven by e-commerce, 40–50% of luxury firms
choose not to sell online (Berger, 2012; D'Arpizio, 2013). In an effort to
explain the slow adoption and usage of IT by luxury firms, discussion
has centered around whether luxury firms should use the Internet
purely as a means to communicate or whether to also use it as a sales
channel (Hennigs et al., 2012; Kapferer and Bastien, 2012; Okonkwo,
2009; Seringhaus, 2005). Firms from Rolls-Royce and Ferrari, to Louis
Vuitton and Prada, to Tiffany and Cartier face the “Internet Dilemma”
of how to maintain the image of their brand, sustain a personal link
with customers, and retain an aura of exclusivity as they seek to provide
their products and services to an increasingly technologically-astute
customer base.
Against this backdrop, we explore whether and how different luxury
sectors have embraced Internet-based technologies. We focus
specifically on the firm website. Given that luxury firms place a high
priority on the relationships that they form with their customers (Tynan
et al., 2010), customer-facing technology such as the firm's website
should be a key indicator of the firm's stance towards using the Internet
as a branding and selling tool. Furthermore, web sites have taken on a
prominent role in online communication and as a distribution channel
(Keller, 2010). By examining and analyzing the elements used – or not
used – on a luxury firm's website, we seek to uncover the characteristics
of luxury firms, their products, and their strategies that lead them to
make specific choices about the adoption of Internet-based technolo-
gies. The research questions guiding our efforts in this paper are: “What
are the characteristics of luxury firms’ websites?” and “How do luxury
firms differ in their use of website characteristics across different sec-
tors?”
Our primary intended contribution is an explanation of the sys-
tematic differences in website characteristics across different industry
sectors. After first developing a descriptive account of website char-
acteristics utilized by various luxury sectors, we then examine how
product attributes, as well as existing literature and theory, provide
insight into how customers want to interact with a luxury firm, before
finally developing prescriptive suggestions for practitioners. We also
present conceptual and theoretical insights into how and why firms use

⁎
Corresponding author.
E-mail addresses: jbaker@aus.edu (J. Baker), nashill@aus.edu (N. Ashill), noha.tarek90@gmail.com (N. Amer), ekram.thiab@gmail.com (E. Diab).

https://doi.org/10.1016/j.jretconser.2017.11.007
Received 12 February 2017; Received in revised form 1 November 2017; Accepted 15 November 2017
Available online 29 November 2017
0969-6989/ © 2017 Elsevier Ltd. All rights reserved.
J. Baker et al. Journal of Retailing and Consumer Services 41 (2018) 37–47

38
J. Baker et al.
particular website features and characteristics.
Our paper is organized as follows. First, we review current literature
on online marketing and e-commerce in the luxury industry, high-
lighting the debate in scholarly research about the role of the Internet.
We then report a qualitative study of 92 global luxury firm websites
across five different luxury sectors. We utilize one of the most-re-
cognized conceptual frameworks for evaluating firm websites, the 8C
framework (Bjørn-Andersen and Hansen, 2011; Lee and Benbasat,
2004; Rayport and Jaworski, 2001; Sabouri and Jalali, 2009; Yang
et al., 2008). As we evaluate luxury firm websites, we are able to
identify distinct patterns in the usage of various web interface elements
across different industry sectors. After reporting our results, we discuss
the theoretical and practical implications of these patterns for luxury
firms as they consider their e-marketing and e-commerce strategies.
2. Literature review
2.1. Luxury firms
Many different definitions of luxury exist (De Barnier et al., 2012;
Kapferer and Bastien, 2012), but they share a common core of six cri-
teria: (a) a very qualitative hedonistic experience, (b) offered at a price
that far exceeds what the functional value would command, (c) tied to
heritage, unique know-how and culture, (d) available in restricted and
controlled distribution, (e) offered with personalized accompanying
services and (f) representing a social marker, where the purchaser feels
special with a sense of privilege (Kapferer and Bastien, 2012). By their
very nature, luxury brands can be characterized as conspicuous, unique,
social, emotional, and of very high quality. Ultimately, the concept of
luxury is built on consumers’ perceptions, and is determined by per-
sonal and interpersonal motives and is strongly influenced by culture
(Vigneron and Johnson, 2004).
The symbolic value of a luxury brand, acquired through quality,
creativity, and status, is central to its success. In luxury, brand image is
identified as a salient resource to gain competitive advantage (Kapferer
and Bastien, 2012). Brand image is acknowledged to be a key compo-
nent of brand equity which is defined as the “differential effect that
brand knowledge has on consumer response to the marketing of that
brand” (Keller, 2008). Not surprisingly, understanding those factors
that increase brand equity is critical to brand management. There is an
abundance of research that has examined the actions that organizations
can take with customers to build brand equity (Yoo et al., 2000), but a
lack of research on those actions taken within the organization.
Given the ultimate goal of building brand equity, luxury firms have
considered ways in which IT can be used. Extant research on the use of
IT within luxury firms can be generally grouped around several themes:
consumer and purchase behavior in an online environment (Brun et al.,
2013), website design (Kluge et al., 2013), the role of web and mobile
technologies (Mahyari, 2013), the role of social media when engaging
with luxury firms (Kim and Ko, 2012; Riley and Lacroix, 2003) and the
role of the internet in communications strategy (Geerts, 2013). We
observe that each of these themes touch on the importance of the In-
ternet to luxury firms. We also observe, however, that a systematic
study of how the Internet is used in these firms has not yet been un-
dertaken. It is this gap in existing research that we seek to address.
2.2. Luxury firms and the internet dilemma
While online digital marketing has become decidedly mainstream,
luxury firms have been slower than many non-luxury firms to embrace
the Internet's potential. Part of the reason for this reluctance is what
some have termed “the Internet Dilemma.” The Internet Dilemma is a
term coined to describe the challenge luxury firms face as they seek to
maintain the image of their brand, sustain a personal link with custo-
mers, and retain an aura of exclusivity as they simultaneously seek to
provide their products and services to increasingly technologically-
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Journal of Retailing and Consumer Services 41 (2018) 37–47
astute customers (Kapferer and Bastien, 2012).
Not all accept the existence of an Internet Dilemma, however. There
is no immediate reason that Internet-based technologies would erode
brand exclusivity or reduce luxury firms’ price premiums. Economists
have shown mathematically that using the Internet to increase sales
need not erode firms’ profitability, consumer surplus, nor social welfare
(Pruzhansky, 2014). Furthermore, luxury firms have demonstrated a
willingness to invest in Internet-based technologies and engaging in
online selling (D'Arpizio, 2014). These firms have clearly realized the
potential for increased (rather than diminished) revenues online
(Geerts, 2013) and have responded to consumers’ desire for convenient
interaction in each phase of their decision making process (Hennigs
et al., 2015; Holmes et al., 2013). Researchers are investigating how to
influence perceptions of luxury through website interactivity (Altarteer
et al., 2013; Beuckels and Hudders, 2016) and have explored “web
atmospherics”, as they discuss specific ways for luxury firms to provide
a rarified shopping experience by appealing to the senses online (Kim
et al., 2015; Okonkwo, 2010). There is a growing acceptance of Internet
technologies by luxury brands. They are no longer asking whether to
sell online, but are simply asking how.
As luxury firms identify ways to sell online, they nevertheless con-
tinue to ask how they can “optimize their online presence and preserve
their highly valued prestige” (Beuckels and Hudders, 2016, p. 135).
Researchers have echoed this, investigating ways luxury firms maintain
their exclusive aura as they take advantage of the ubiquitous character
of the Internet (Chandon et al., 2016; Kim et al., 2015). Ultimately, no
agreement exists about the so-called Internet Dilemma. Questions re-
main about the ways in which luxury firms can use the Internet to
provide consumers with information about their brand, products, and
experiences while maintaining a luxurious and rarified customer ex-
perience.
Part of the disagreement arises from divergent opinions about the
purpose of a luxury firm's website. It is generally acknowledged that a
firm's website acts as a branding tool where information is exchanged
between buyers and sellers (Kiang et al., 2000). In branding and com-
munication strategies, the Internet is a complementary tool that is used
to inform, remind, and persuade (Nyeck, 2004). A firm's website
therefore helps to establish links between consumers and brands. A
dilemma arises, however, when one also acknowledges that the firm's
website has the ability to serve as a transaction medium (Kim and Stoel,
2004). Thus, one of the key considerations for luxury firms is whether
they will use the Internet for branding or selling.
Some contend that the Internet strategy of a luxury firm should be
limited to communication (Kapferer and Bastien, 2012). Selling – rather
than simply communicating online – potentially undermines the feel-
ings of exclusivity attached to the brand, significantly reduces the ef-
forts of consumers to access luxury (efforts that are a core part of the
creation of desire in luxury), and diminishes the personalization of the
transaction (Hennigs et al., 2012). It has even been stated that if a
luxury product is for sale on the Internet, and thus for sale broadly and
commonly to the masses, it can no longer be considered a luxury pro-
duct (Kapferer and Bastien, 2012). Researchers taking this perspective
argue that the inability of the Internet to provide a rarefied, distinctive,
multisensory shopping experience outweighs the potential benefits of
selling online and therefore recommend that luxury firms wait for more
immersive Internet experiences in the future.
Others, however, recommend that luxury firms should not only
communicate online, but should also engage in online retailing
(Hennigs et al., 2012; Okonkwo, 2009). Because the Internet has be-
come a source of information and purchase for affluent consumers,
luxury firms cannot afford to miss the opportunity to make use of this
sales channel. When luxury firms can use the Internet to leverage
movement, music, texture, space, and community to successfully, art-
fully, and compellingly communicate brand identity online, a premium
and even luxurious online experience can be created, thus aligning the
Internet experience with the overall identity of the luxury brand
J. Baker et al. Journal of Retailing and Consumer Services 41 (2018) 37–47

40
J. Baker et al.
(Okonkwo, 2010). As long as a premium experience can be created
online, and as long as the price premium associated with luxury pro-
ducts can be maintained in the virtual world via limited distribution,
the potential downside of the Internet being a public, non-exclusive
marketspace of immediate buying and selling can be minimized
(Hennigs et al., 2012; Okonkwo, 2009).
Indeed, there appears to be a general trend of migration from the
traditionalist approach to one that embraces many of the capabilities of
the Internet. Early studies assessing B2C luxury websites in the fashion
sector showed that luxury fashion firms generally did not have inter-
active, entertaining or engaging websites, and therefore did not meet
consumer expectations (Dall'Olmo Riley and Lacroix, 2003; Seringhaus,
2005; Siddiqui et al., 2003). Luxury firms are, over time, however,
moving to incorporate transactional capabilities on their websites so
that they can sell online. Indeed, a longitudinal study of 15 luxury
fashion brands over the time period from 2006 to 2012 identified in-
creasing rates of adoption and usage of e-commerce (Hansen and Bjorn-
Andersen, 2013). In sum, while a growing number of firms are opting to
use the Internet for both branding and selling, the issue is far from set-
tled.
Luxury firms also highly value ongoing relationships with their
clients (Atwal and Williams, 2009) and have to consider whether they
will use the capabilities of the Internet to engage in one-way or two-way
communication. One-way communication is defined as the transmission
of a firm's messages to consumers (but not in the other direction, from
consumers to the firm). Two-way communication refers to the ability
for reciprocal communication between firms and consumers, and also
between consumers and other consumers (Liu and Shrum, 2002). Many
luxury firms may be predisposed to one-way communication on the
Internet, given their desire to maintain control of their image, and to
preserve selectivity and rarity (Geerts and Veg-Sala, 2011). The Internet
is generally understood to be a mass medium of communication, one
that is neither selective nor exclusive. Two-way communication offers
the potential to enhance relationships with customers, but the challenge
for luxury firms is to engage in this communication only with a selected
portion of the population (Vigneron and Johnson, 2004).
There is evidence to suggest that luxury firms want to maintain this
focus on consumer relationships and ongoing interaction with con-
sumers online (Bjørn-Andersen and Hansen, 2011; Kim and Ko, 2012;
Okonkwo, 2009; Phan et al., 2011). Luxury consumers are no longer
just looking for one-way communication from brands; rather, con-
sumers desire two-way interaction that comes in the form of dialogue,
exchanges, sharing, entertainment, and engagement (Okonkwo, 2009).
Luxury consumers want a website that can offer social interaction, two-
way communication and a personalized relationship (Bjørn-Andersen
and Hansen, 2011; Kim and Ko, 2012). The benefits of Web 2.0 in
creating user-generated content are widely acknowledged
(Constantinides and Fountain, 2008; Wiedmann and Hennigs, 2013),
suggesting that the Internet strategies of luxury firms allow for two-way
interaction with consumers. A study of luxury wristwatch manu-
facturers found that communication and interactivity tools were used
on a large scale (Motta and Barbosa, 2013). Thus, despite the reluctance
of many luxury brands to move many of their customer-facing activities
online, there appears to be growing consensus that luxury brands find
value in using the Internet and social media platforms to achieve their
strategic goals (Kluge and Fassnacht, 2015). Thus, a second con-
sideration for luxury firms is whether they will use the capabilities of
the Internet to engage in one-way or two-way communication.
There is also variation across firms and sectors as they consider
where and how to utilize Internet capabilities across their value chain.
Luxury firms must decide if they will use the Internet for simply for
operations, or also for innovation. Some firms are using technology
strictly to improve internal business processes, while others are taking a
more pioneering approach. For instance, luxury fashion firms thrive on
combining emotion, image, and perception (Atwal and Williams, 2009;
Seringhaus, 2005). The challenge firms face in the online environment
41
Journal of Retailing and Consumer Services 41 (2018) 37–47
is how to convey these characteristics and create multi-sensory ex-
periences using Internet technologies (Bjørn-Andersen and Hansen,
2011). Delivering a unique multisensory experience through sensorial
stimulation of the customer's sight, taste, hearing, smell, and touch, has
been described as being at the very heart of a luxury strategy
(Okonkwo, 2009). Emotional appeal, style, and aesthetically appealing
website design are likely to be more relevant than effectively commu-
nicating quality or technical performance specifications of the product
(Berthon et al., 2009; Caniato et al., 2011, 2009). Innovation that ele-
vates the sensorial online experience is thus an important consideration
for luxury fashion firms.
In another example, websites selling fashion-related products also
benefit from higher levels of social presence (Coursaris et al., 2006;
Hassanein and Head, 2005), echoing the importance of interactivity in
media richness (Daft and Lengel, 1986). Consumers experience a high
degree of social presence when they experience others as psychologi-
cally present (Fulk et al., 1987). In a web environment, instilling social
presence is accompanied by providing a means of actual interaction
with other humans, often via innovative online features such as virtual
communities, message boards, audio and video material, and rich text
and picture content such as 3D and 360 degree view. Such innovative
technological features can enhance the engagement of customers and
improve firms’ communication with them (Okonkwo, 2009).
In still another example, innovation in website features can facil-
itate product customization and website personalization (Geerts, 2013;
Hansen and Bjorn-Andersen, 2013). Customers may expect a degree of
product customization, which is widely-available on websites for mass-
market products. However, the luxury brand may resist such expecta-
tions in order to maintain full creative and artistic control over their
products. In sum, an additional consideration for firms is whether they
will use the Internet simply for operations, or also for innovation.
2.3. Summary
Ultimately, luxury firms have addressed the Internet Dilemma in
various ways. Some are cautious and staunchly traditional, using the
Internet exclusively for branding, one-way communication to custo-
mers, and operational tasks. Others are at the vanguard of Internet
usage also engaging in online e-commerce sales, facilitating two-way
communication with customers, and seeking innovative uses of the
Internet to market, advertise, and even customize their products
(Hansen and Bjorn-Andersen, 2013).
While research has been conducted on the use of the Internet by
luxury firms, we observe that this extant work is limited in two ways.
First, it examines only certain specific sectors rather than a broad
spectrum of luxury firms. Fashion is by far the most common (Dall'Olmo
Riley and Lacroix, 2003; Hansen and Bjorn-Andersen, 2013;
Seringhaus, 2005; Siddiqui et al., 2003). The luxury market en-
compasses many additional sectors, however, ranging from automobiles
to watches, and from yachts to jewelry. These sectors vary significantly
in terms of the products and their attributes (Caniato et al., 2011) and
are understudied. Second, and following from our initial observation,
extant research on luxury firms presents an unresolved dilemma – that
of whether and how to use the Internet. There are clearly differences of
opinion among researchers, and there are also clearly-observable dif-
ferences in the approaches taken by various firms.
Against this backdrop of growing consensus that luxury firms should
embrace the Internet and social media platforms, but amidst dissension
on how to do so, we now present a descriptive study of the ways in
which luxury firms are addressing the Internet Dilemma.
3. Research methodology
3.1. Sample
In this research, our primary interest is understanding how luxury
J. Baker et al. Journal of Retailing and Consumer Services 41 (2018) 37–47

Table 1
List of luxury brands evaluated.

Autos (N=20) Fashion (N=29) Jewelry (N=13) Watches (N=20) Yachts (N=10)

Alfa Romeo Armani Annoushka Breitling Amels

Aston Martin Burberry Autore Cartier Benetti
Audi Calvin Klein Buccellati Chopard Blohm& Voss
Bentley Motors Chanel Bvlgari Christian Dior Christensen
BMW Christian Dior Cartier Franck Muller Feadship
Bugatti Christian Louboutin Chopard Hermes Heesen
Cadillac Dolce & Gabbana Graff Harry Winston Lürssen
Ferrari DKNY Harry Winston Longines Oceanco
Jaguar ESCADA Mikimoto Louis Moinet Perini Navi
Koenigsegg Fendi Piaget Louis Vuitton Trinity Yachts
Lamborghini Gucci Swarvoski MontBlanc
Land Rover Hugo Boss Tiffany & Co Omega
Lexus John Varvatos Van Cleef & Arpels Parmigiani Fleurier
Lotus La Perla Patek Philippe Geneve
Maserati Louis Vuitton Piaget
McLaren Manolo Blahnik Rolex
Mercedes-Benz Marc Jacobs Seiko
Porsche Michael Kors TAGHeuer
Rolls-Royce Missoni Van Cleef & Arpels
Tesla Narciso Rodriguez Zenith
Prada
Ralph Lauren
Roland Mouret
Stella McCartney
Stuart Weitzman
Tom Ford
Tory Burch
Turnbull & Asser
Versace

42
J. Baker et al.
firms across diverse industry sectors utilize digital Internet-based
technologies on their websites. We selected a sample of luxury brands
covering a broad range of luxury goods. We began by consulting es-
tablished brand rankings from Forbes, BrandZ, and Interbrand to
identify the luxury brands with the highest value (Doran, 2012, 2014;
Rapoza, 2013). These lists yielded 10, 9, and 14 brands respectively, so
additional sector-specific resources (including autos, fashion, jewelry,
watches, and yachts) were consulted to develop a more comprehensive
listing (Creusy, 2015; Du, 2014a, 2014b; Fine High Living, 2014;
Genier, 2014). The procedure for brand inclusion was straightforward:
if the brand was listed in any of the Forbes, BrandZ, Interbrand, or
sector-specific resources examined, it was included in our study. We
took this approach in an effort to create an inclusive multiple-sector
listing. The final listing included 92 luxury brands across the five
aforementioned categories of autos, fashion, jewelry, watches, and
yachts. A listing of the specific brands evaluated is provided in Table 1.
Our research utilized qualitative content analysis. Content analysis
is a research methodology that involves making the content of messages
manifest through identification of characteristics in as objective a way
as possible (Bryman, 2008). The intention is to create a coding schema,
or “membership categorization device”, which encompasses a collec-
tion of categories and a set of rules on how to attribute data to these
categories (David, 2005). The content analysis was based on an a priori
classification system grounded in the 8C framework (Bjørn-Andersen
and Hansen, 2011; Lee and Benbasat, 2004; Rayport and Jaworski,
2001; Sabouri and Jalali, 2009; Yang et al., 2008).
The 8C Framework emphasizes the specific role of website interface
elements as a branding and sales channel between owners of a brand
and its customers (Rayport and Jaworski, 2001). The framework adopts
a strategic perspective towards evaluating websites that ensures con-
sistency between a firm's web activities and marketing strategies. The
framework includes a set of standardized design principles for e-com-
merce websites including (1) context, (2) content, (3) community, (4)
customization, (5) communication, (6) connection, and (7) commerce,
and (8) collaboration (Rayport and Jaworski, 2001; Yang et al., 2008).
The 8C framework has been applied in research on luxury firms
43
Journal of Retailing and Consumer Services 41 (2018) 37–47
(Hansen and Bjorn-Andersen, 2013). Prior research with luxury fashion
firms reveals that firms must make at least three strategic choices
(Hansen and Bjorn-Andersen, 2013). The first strategic choice relates to
the purpose of the website, where the focus is either on branding or
selling through the website. The second is the mode of interaction
which can either be one-way where the message is distributed from the
brand to customers, or two-way where individual consumers engage in
interaction. And finally, the third strategic choice focuses on the level of
interaction, where a brand faces the choice of whether to provide pri-
marily operational features through the website or actively pursuing
innovation on the website by providing features such as augmented
reality, product customization, or online communities. The 8 categories
differ in the extent to which each is primarily use to further branding or
sales, whether the orientation of the website is primarily operational or
innovative, and whether the communication is predominantly one-way
or two-way. Definitions for each of the elements of the 8C Framework
are included in Table 2.
3.2. Data collection
Observations of 92 luxury firm websites were initially conducted
over a four-week period in 2015 by two members of the research team.
Content analysis specifically focused on the textual and visual contents
of each website. In a pilot test, two members of the research team, who
had undergone a training session, independently viewed 10 websites.
Responses utilizing the agreed upon coding system for the 8 categories
(the 8Cs) and 29 sub-categories were compared (see Tables 2 and 3 for
the 8C categories and their sub-categories, respectively). Results in-
itially found an 8% inconsistency in the observations for the 10 web-
sites, mainly due to subjective interpretations of the websites and de-
gree of interaction with the site. All inconsistencies were subsequently
explored and discussed by all four members of the research team and
agreement was sought on the meaning of the assessment criterion.
In the main data collection phase, the same two researchers in-
dependently analyzed the content of web pages based upon the revised
pre-set coding criteria. Where firms had multiple websites for multiple
J. Baker et al. Journal of Retailing and Consumer Services 41 (2018) 37–47

Table 2
The 8C framework.

44
J. Baker et al. Journal of Retailing and Consumer Services 41 (2018) 37–47

Branding or Operational or One-Way or Two-Way

Selling? Innovative? Communication?

Content: the offering mix, which includes product information, special campaigns, Branding Operational One-Way
brand messages, brand history and corporate information.
Community: communities established by the brand where customers interact with the brand Branding Operational Two-Way
and each other.
Communication: website reviewers receiving emails, newsletters, broadcasts, videos Branding Innovative One-Way
and interviews with brand figure heads.
Collaboration: customer involvement in designing and developing products, including Branding Innovative Two-Way
providing feedback and comments on brand related issues.
Connection: links to external sites that use either microsites or there is content from external Selling Operational One-Way
sites.
Commerce: the existence of a full set of e-commerce functionalities/features, including Selling Operational Two-Way
shopping assistants, virtual stores, shop able videos, and commerce on social media sites.
Context: the existence of aesthetically pleasing website design including the existence of Selling Innovative One-Way
flash, videos, animations, augmented reality and 3D or 360 degree view of products.
Customization: customizing the site experience for the individual user. Selling Innovative Two-Way

regions, the European English-language website was chosen.
The data collection consisted of logging codes. For example, a “1”
indicated the feature was found on the website and “0” indicated the
feature was not found. Total scores were generated for each of the 8
interface categories through which luxury brands communicate with
their customers. To ensure the reliability of the analysis, the two coders
conducted the coding separately. We calculated the percentage that the
two coders agreed in their ratings as an index of coder agreement. For
categorical data, this is expressed as the number of agreements in ob-
servations divided by the total number of observations. Coder
agreement varied between 70.1% and 73.8% across the 5 luxury sec-
tors. Cohen's Kappa (Cohen, 1968) for inter-rater reliability was also
calculated to assess inter-rater reliability. Kappa is a function of the
ratio of agreements to disagreements in relation to expected fre-
quencies. It is considered a more robust measure than a simple percent
agreement calculation because it accounts for chance (Krippendorf,
1980). The inter-rater reliability rate ranged from .76 to .85 across the
five luxury sectors, exceeding the acceptable level of .70 and indicating
good reliability (Landis and Koch, 1977). A group consensus procedure
(involving all four researchers) was adopted to resolve inconsistencies

Table 3
Website comparison across luxury sectors.

Assessment Criteria Autos (N=20) % Fashion (N=29) % Jewelry (N=13) % Watches (N=20) % Yachts (N=10) %

Content (Branding/Operational/One-way)
Product information 20 100 25 86 12 92 18 90 10 100
History 18 90 17 59 13 100 17 85 7 70
Corporate information 18 90 22 76 13 100 20 100 10 100
Special promotions/campaigns 12 60 28 97 11 85 18 90 3 30
Community (Branding/Operational/Two-way)
Own brand community 2 10 0 0 4 31 5 25 1 10
Community on external site 19 95 27 93 13 100 17 85 7 70
Communication (Branding/Innovative/One-way)
Email register 14 70 28 97 12 92 19 95 8 80
About us/contact 19 95 25 86 13 100 20 100 10 100
Video interviews 9 45 5 17 6 46 9 45 3 30
Collaboration (Branding/Innovative/Two-way)
Design collaboration 0 0 0 0 0 0 0 0 0 0
Feedback and comments 16 80 20 69 11 85 19 95 5 50
Connection (Sales/Operational/One-way)
Link to other sites 15 75 14 48 7 54 9 45 4 40
Micro sites 8 40 12 41 1 8 8 40 2 20
Syndication 10 50 4 14 2 16 7 35 2 20
Commerce (Sales/Operational/Two-way)
Transactional 3 15 24 83 5 38 5 25 0 0
Virtual store 0 0 1 3 0 0 1 5 0 0
Link to third party 1 5 1 3 0 0 0 0 0 0
e-shopping assistant 1 5 3 10 3 23 0 0 0 0
Shoppable video 0 0 0 0 0 0 0 0 0 0
Social commerce 1 5 21 72 4 31 1 5 0 0
Context (Sales/Innovative/One-way)
Flash 13 65 28 97 13 100 18 90 8 80
Videos 20 100 28 97 10 77 17 85 5 50
Animation 6 30 4 14 4 31 10 50 2 20
Augmented reality 0 0 1 3 0 0 1 5 1 10
3D 19 95 27 93 13 100 17 85 5 50
360 degree view 8 40 0 0 0 0 3 15 1 10
Customization (Sales/Innovative/Two-way)
Product customization 18 90 23 79 5 38 3 15 3 30
Personalization 3 15 5 17 3 23 1 5 3 30
Recognition of user 5 25 20 69 8 62 5 25 1 10

45
and arrive at a final decision on whether a website characteristic was or
was not present.
4. Results
Descriptive data for each of the 8 characteristics for each luxury
sector are shown in Table 3. The 8C characteristic, Content, showed a
consistent pattern across all five luxury sectors. The overwhelming
majority of the examined 92 luxury brands implement one-way brand
messages to customers using product descriptions, history and timeline,
and corporate information. Firms in each of the five luxury sectors also
use their website to communicate information about marketing cam-
paigns and special promotions. We observe, however, that firms in the
yachting sector do so to a lesser extent than firms in the other four
sectors. Only 30% of firms in the yacht sector relay information about
special promotions and campaigns through their websites, while
70–100% of firms in the other four sectors do so. The second char-
acteristic, Community, also showed a consistent pattern across all five
sectors. Our data suggests that very few luxury brands have developed
both internal and external brand communities with most brands fo-
cusing on building communities using external sites such as Facebook,
Instagram, and YouTube. Analysis of the third category, Communication,
showed that the majority of brands across the 5 sectors offer the option
of signing up for newsletters and display information about them and
contact details. However, almost two thirds of the luxury brand web-
sites examined (60 of the 92 websites) do not use videos as a commu-
nication tool to showcase interviews with designers, craftsmen, or ce-
lebrity ambassadors. No luxury brand website demonstrated
collaboration related to design co-creation, feedback, or comments re-
garding product development. Instead, most luxury firms use social
media channels as a platform to allow customers express their opinion
and write their experience about the brand publicly.
Analysis of the fifth category, Connection, showed that the majority
of luxury brands across all 5 luxury sectors do not link to third party
selling sites (microsites) and place branded content on other sites (the
phenomenon of syndication). In the fashion sector, the use of electronic
commerce and social media commerce is high. However, in watches,
jewelry, and automobiles, its use is very low and non-existent in yachts.
With regard to the website design context, flash, videos, and 3D are used
by most brands in the fashion sector to show their fashion show events.
However, the adoption of animation, augmented reality, and 360-de-
gree view in this sector is significantly lower. A similar pattern for using
flash and videos is also evident in the watches, jewelry, automobile, and
yacht sectors. However, the use of augmented reality is very low sug-
gesting that the adoption of these technologies has not yet reached
luxury firms. The adoption rate for using 360-degree view is highest in
the automobile sector. Finally, although product customization and
personalization lie at the heart of luxury (Kapferer and Bastien, 2012),
it is evident from the descriptive data that some luxury sectors are not
making use of this opportunity to connect with the luxury buyer. In the
fashion and automobile sectors, the majority of luxury firms do offer
customization where buyers are involved in the design of the product.
In contrast, the customization feature is low in watches, jewelry, and
yachts. Very few brands across the five luxury sectors offer personali-
zation, where buyers can add their initials or personal mark. The use of
a sign-in feature, thus enabling brands to recognize visitors who are
logged in, is particularly evident in the fashion sector but the use of this
feature is low in the other 4 sectors.
Tables 4–7 present the findings from a one-way analysis of variance
(ANOVA). Statistically significant differences across the different luxury
sectors are highlighted.
ANOVA results in Table 4 demonstrate that there are statistically
significant differences in the way the various luxury sectors use the 8C
characteristics online. Leven's test for homogeneity of variances was
significant for several of our categories at the .05 level, suggesting that
the population variances for each group are not approximately equal.
To further investigate, we used the Welsh test of equality of means. This
test showed there were significant differences across luxury sectors in
four of the eight categories: content, collaboration, commerce, and
customization (see highlighted results in Table 4). Having obtained
significant results for these categories, we then determined, using a
Games-Howell test, where significant differences existed. With regard
to content, the Games-Howell test indicated that the jewelry sector has a
significantly higher mean score for content relative to the yachts sector.
Inspection of Table 5 indicates the low use of content-related char-
acteristics in the yacht sector. Yachts have the lowest mean, with the
others sectors more similar. With regard to collaboration, again yachts
stand out as making less use of this website characteristic than other
sectors, as indicated in Table 5. Yachts have the lowest mean score for
collaboration. The Games-Howell test indicated that the watches sector

Table 4
Results of ANOVA to test for significant differences between luxury sectors across the 8C characteristics.

Sum of Squares df Mean Square F Sig.

Content Between Groups 9.011 4 2.253 3.202 .017

Within Groups 61.206 87 .704
Total 70.217 91
Community Between Groups 1.347 4 .337 1.253 .295
Within Groups 23.381 87 .269
Total 24.728 91
Communication Between Groups 2.036 4 .509 1.132 .347
Within Groups 39.127 87 .450
Total 41.163 91
Collaboration Between Groups 1.657 4 .414 2.478 .050
Within Groups 14.549 87 .167
Total 16.207 91
Connection Between Groups 8.462 4 2.115 1.958 .108
Within Groups 93.973 87 1.080
Total 102.435 91
Commerce Between Groups 39.501 4 9.875 17.281 .000
Within Groups 49.716 87 .571
Total 89.217 91
Context Between Groups 9.017 4 2.254 2.089 .089
Within Groups 93.885 87 1.079
Total 102.902 91
Customization Between Groups 32.360 4 8.090 8.328 .000
Within Groups 84.509 87 .971
Total 116.870 91
Table 5
Comparisons of the 8C characteristics across luxury sectors.

N Mean Std. Deviation Std. Error 95% Confidence Interval for Mean Minimum Maximum

Lower Bound Upper Bound

Content autos 20 3.3500 .81273 .18173 2.9696 3.7304 1.00 4.00

fashion 29 3.1379 .95335 .17703 2.7753 3.5006 .00 4.00
jewelry 13 3.7692 .43853 .12163 3.5042 4.0342 3.00 4.00
watches 20 3.6000 .68056 .15218 3.2815 3.9185 2.00 4.00
yachts 10 2.7000 1.15950 .36667 1.8705 3.5295 .00 4.00
Total 92 3.3261 .87842 .09158 3.1442 3.5080 .00 4.00
Community autos 20 1.0500 .39403 .08811 .8656 1.2344 .00 2.00
fashion 29 .9310 .25788 .04789 .8329 1.0291 .00 1.00
jewelry 13 1.3077 .48038 .13323 1.0174 1.5980 1.00 2.00
watches 20 1.1000 .64072 .14327 .8001 1.3999 .00 2.00
yachts 10 1.0000 .94281 .29814 .3256 1.6744 .00 2.00
Total 92 1.0543 .52129 .05435 .9464 1.1623 .00 2.00
Communication autos 20 2.0500 .82558 .18460 1.6636 2.4364 .00 3.00
fashion 29 2.0000 .37796 .07019 1.8562 2.1438 1.00 3.00
jewelry 13 2.3846 .65044 .18040 1.9916 2.7777 1.00 3.00
watches 20 2.3000 .80131 .17918 1.9250 2.6750 .00 3.00
yachts 10 2.1000 .73786 .23333 1.5722 2.6278 1.00 3.00
Total 92 2.1413 .67256 .07012 2.0020 2.2806 .00 3.00
Collaboration autos 20 .8000 .41039 .09177 .6079 .9921 .00 1.00
fashion 29 .6897 .47082 .08743 .5106 .8687 .00 1.00
jewelry 13 .8462 .37553 .10415 .6192 1.0731 .00 1.00
watches 20 .9500 .22361 .05000 .8453 1.0547 .00 1.00
yachts 10 .5000 .52705 .16667 .1230 .8770 .00 1.00
Total 92 .7717 .42201 .04400 .6843 .8591 .00 1.00
Connection autos 20 1.6500 1.03999 .23255 1.1633 2.1367 .00 3.00
fashion 29 1.0345 1.01710 .18887 .6476 1.4214 .00 3.00
jewelry 13 .7692 .92681 .25705 .2092 1.3293 .00 3.00
watches 20 1.1500 1.13671 .25418 .6180 1.6820 .00 3.00
yachts 10 .8000 1.03280 .32660 .0612 1.5388 .00 3.00
Total 92 1.1304 1.06097 .11061 .9107 1.3502 .00 3.00
Commerce autos 20 .3000 .73270 .16384 −.0429 .6429 .00 3.00
fashion 29 1.7241 .64899 .12051 1.4773 1.9710 .00 3.00
jewelry 13 .9231 1.25576 .34828 .1642 1.6819 .00 3.00
watches 20 .4000 .68056 .15218 .0815 .7185 .00 2.00
yachts 10 .0000 .00000 .00000 .0000 .0000 .00 .00
Total 92 .8261 .99016 .10323 .6210 1.0311 .00 3.00
Context autos 20 3.3500 1.22582 .27410 2.7763 3.9237 1.00 5.00
fashion 29 3.0690 .75266 .13977 2.7827 3.3553 1.00 4.00
jewelry 13 3.0769 .75955 .21066 2.6179 3.5359 2.00 4.00
watches 20 3.0500 1.23438 .27601 2.4723 3.6277 1.00 6.00
yachts 10 2.2000 1.22927 .38873 1.3206 3.0794 .00 5.00
Total 92 3.0326 1.06339 .11087 2.8124 3.2528 .00 6.00
Customization autos 20 1.3000 .65695 .14690 .9925 1.6075 .00 2.00
fashion 29 1.6552 .97379 .18083 1.2848 2.0256 .00 3.00
jewelry 13 1.2308 1.09193 .30285 .5709 1.8906 .00 3.00
watches 20 .4500 .51042 .11413 .2111 .6889 .00 1.00
yachts 10 2.5000 1.84089 .58214 1.1831 3.8169 .00 3.00
Total 92 1.3478 1.13326 .11815 1.1131 1.5825 .00 3.00
had a significantly higher mean score for collaboration relative to the
yachts sector. For commerce, the fashion sector had a significantly
higher mean score relative to all other sectors. Means, in descending
order, begin with fashion, followed by jewelry, watches, autos, and
then no use whatsoever of commerce-related website characteristics in
yachts. The Games-Howell test also indicated that the jewelry sector
had a significantly higher mean score for commerce relative to the
yachts sector. Finally, statistically significant results on customization
are tied to the lower mean of the watches sector relative to autos,
fashion, and yachts. Specifically, the yachts sector had a significantly
higher mean score for customization relative to autos, jewelry, and
watches. The fashion sector also had a significantly higher mean score
for customization relative to the watches sector.
ANOVA results also demonstrate significant differences in how
different sectors use the Internet for branding, selling, one-way com-
munication, two-way communication, and operational features (see
Table 6). For branding-related characteristics, the Games-Howell test
revealed that jewelry had a significantly higher mean scores relative to
the fashion and yacht sectors. The watches sector also had a
significantly higher mean score for brand-related characteristics relative
to the fashion and yacht sectors. Table 7 further reveals the lowest
adoption of this characteristic in the yachts sector. For selling, the
fashion sector had a significantly higher mean score than the watches
sector. Statistically significant results for one-way communication appear
to be driven by high means for autos, watches, and jewelry, with a low
value for yachts. The Games-Howell test revealed that autos and
watches sectors had a significantly higher mean score for one-way
communication relative to the yachts sector. In terms of two-way com-
munication, the fashion sector had a significantly higher mean score
than both the autos and watches sectors. Operational website char-
acteristics are widely used in all sectors except yachts. The Games-
Howell test also revealed that the fashion and jewelry sectors had a
significantly higher mean score than yachts.
In summary, our findings shown in Tables 4–7 highlight similarities
and differences in the way different luxury sectors have embraced di-
gital technologies in their websites. There were significant differences
across luxury sectors in content, collaboration, commerce, and custo-
mization. The website characteristics of branding, selling, one-way
Table 6
communication, two-way communication, and the use of operational
Results of ANOVA to test for significant differences between luxury sectors across
branding/sales, operational/innovative and one-way/two-way communication. features also differed across luxury sector.

Sum of df Mean F Sig.

Squares
5. Discussion
Square

Branding Between 40.197 4 10.049 5.434 .001 Having observed differences across sectors in terms of how each of
Groups the 8C website elements are used, we now proceed to offer explanation
Within Groups 160.880 87 1.849 for our findings, and to describe their implications. In doing so, we
Total 201.076 91
draw upon existing theory and literature to explain why luxury firms
Selling Between 81.063 4 20.266 4.067 .005
Groups use particular website features and characteristics.
Within Groups 433.491 87 4.983
Total 514.554 91
One-way Between
55.924 4 13.981 3.107 .019 5.1. Theoretical implications
Groups
Within Groups 391.510 87 4.500 As firms consider whether they will engage only in branding online,
Total 447.435 91
or if they will also engage in selling, several considerations come to
Two-way Between 60.481 4 15.120 4.774 .002
Groups
light. One potential explanation for differences across sectors is the
Within Groups 275.519 87 3.167 variation in product complexity. Product complexity is defined as the
Total 336.000 91
amount of information needed to specify the attributes of a product in
Operational Between 43.309 4 10.827 3.026 .022 enough detail to allow potential buyers to make a selection (Malone
Groups
et al., 1987). Product complexity is a function of the number of com-
Within Groups 311.246 87 3.578
Total 354.554 91 ponents and their technological intensity (Lamming et al., 2000).
Innovative Between 7.961 4 1.990 .634 .640 Watches and yachts exhibit high complexity whereas fashion exhibits
Groups relatively low complexity (Caniato et al., 2011), perhaps indicating a
Within Groups 273.115 87 3.139
distinction in how such products will be presented to consumers online.
Total 281.076 91
Indeed, our results indicate that less-complex products are more likely
to be sold online (high usage of commerce-related features), whereas
complex products are unlikely to be sold online (low usage of com-
merce-related features). Complexity would thus appear to be something

Table 7
Comparisons of branding/sales, operational/innovative and one-way/two-way communication across luxury sector.

95% Confidence Interval for Mean

N Mean Std. Deviation Std. Error Lower Bound Upper Bound Minimum Maximum

Branding autos 20 7.2500 .96655 .21613 6.7976 7.7024 6.00 10.00

fashion 29 6.7586 1.21465 .22555 6.2966 7.2206 4.00 9.00
jewelry 13 8.3077 1.10940 .30769 7.6373 8.9781 7.00 10.00
watches 20 7.9500 1.39454 .31183 7.2973 8.6027 5.00 10.00
yachts 10 6.3000 2.35938 .74610 4.6122 7.9878 2.00 9.00
Total 92 7.2935 1.48648 .15498 6.9856 7.6013 2.00 10.00
Selling autos 20 6.6000 2.56289 .57308 5.4005 7.7995 2.00 13.00
fashion 29 7.4828 1.92021 .35657 6.7524 8.2132 4.00 11.00
jewelry 13 6.0000 2.34521 .65044 4.5828 7.4172 2.00 10.00
watches 20 5.0500 2.13923 .47835 4.0488 6.0512 2.00 9.00
yachts 10 5.5000 2.41523 .76376 3.7722 7.2278 2.00 9.00
Total 92 6.3370 2.37791 .24791 5.8445 6.8294 2.00 13.00
One-way autos 20 10.4000 2.64376 .59116 9.1627 11.6373 7.00 15.00
fashion 29 9.2414 1.64002 .30454 8.6176 9.8652 6.00 12.00
jewelry 13 10.0000 1.68325 .46685 8.9828 11.0172 7.00 12.00
watches 20 10.1000 2.40394 .53754 8.9749 11.2251 7.00 14.00
yachts 10 7.8000 2.09762 .66332 6.2995 9.3005 4.00 11.00
Total 92 9.6304 2.21740 .23118 9.1712 10.0896 4.00 15.00
Two-way autos 20 3.4500 1.27630 .28539 2.8527 4.0473 1.00 6.00
fashion 29 5.0000 1.60357 .29778 4.3900 5.6100 2.00 7.00
jewelry 13 4.3077 2.32324 .64435 2.9038 5.7116 2.00 8.00
watches 20 2.9000 1.07115 .23952 2.3987 3.4013 1.00 6.00
yachts 10 4.0000 3.09121 .97753 1.7887 6.2113 .00 10.00
Total 92 4.0000 1.92154 .20033 3.6021 4.3979 .00 10.00
Operational autos 20 6.3500 1.75544 .39253 5.5284 7.1716 4.00 10.00
fashion 29 6.8276 1.67052 .31021 6.1922 7.4630 2.00 10.00
jewelry 13 6.7692 2.35067 .65196 5.3487 8.1897 4.00 12.00
watches 20 6.2500 1.94327 .43453 5.3405 7.1595 3.00 11.00
yachts 10 4.5000 2.01384 .63683 3.0594 5.9406 .00 7.00
Total 92 6.3370 1.97388 .20579 5.9282 6.7457 .00 12.00
Innovative autos 20 7.5000 1.43270 .32036 6.8295 8.1705 5.00 10.00
fashion 29 7.4138 1.42722 .26503 6.8709 7.9567 5.00 10.00
jewelry 13 7.5385 1.45002 .40216 6.6622 8.4147 5.00 10.00
watches 20 6.7500 1.65036 .36903 5.9776 7.5224 4.00 10.00
yachts 10 7.3000 3.33500 1.05462 4.9143 9.6857 3.00 13.00
Total 92 7.2935 1.75748 .18323 6.9295 7.6574 3.00 13.00
that augurs for an in-store, hands-on, or associate-guided demonstra-
tion rather than an online description. Indeed, researchers have noted
that products that are standardized, with low complexity, requiring
little interaction with salespeople, are well-suited to online sales
(Grewal et al., 2004; Perea y Monsuwé et al., 2004).
Luxury sectors also differ in terms of product fashionableness
(Caniato et al., 2009). Sectors high in fashionableness include those that
have aesthetic requirements that vary over time. Fashion items such as
apparel, shoes, bags, and accessories, for example, are typically subject
to seasonal fashion trends. Products with high seasonality need to
quickly rotate through inventory and are well-suited to an online sales
strategy (Levy et al., 2013). Yachts are extremely durable, long-lasting,
and are much less fashion-sensitive, again indicating a potential dif-
ference in how such products will be marketed. Indeed, our results
indicate that fashion is the most likely of all sectors to sell online.
Sales volume has been highlighted as an important factor in supply
chain management considerations for luxury firms (Caniato et al.,
2011). We observe that this factor also has relevance for firms that are
considering whether they will only engage in branding online or
branding as well as selling. For firms in sectors that can enjoy a rela-
tively high sales volume, the ability to automate transactions by moving
them online is a strong rationale for building an e-commerce site.
Outside of the luxury industry, it has been noted that products with
high sales volume and standardization lend themselves to online sales,
justifying the expense of constructing an e-commerce website
(Heilemann, 2008). Fashion, with its high level of transactions would
be similarly well-suited to e-commerce sites where selling takes place
online. This stands in contrast to yachting firms, with extremely low
sales volumes, which would not generally consider selling online. The
differences across sectors in the mean usage of the Internet for branding
and selling appear in Fig. 1 below.
As firms consider the use of one-way and two-way communications,
several additional considerations come to light. Researchers argue that
depending on fashion sensitiveness, a luxury product can be considered
a symbolic luxury or a technical luxury (Brun et al., 2008; Brun and
Castelli, 2008). That is, some products are primarily recognized for
their technical features whereas others, in the eyes of the customer, are
primarily symbolic. For example, people buy Ferraris because of the
vehicles’ world-class performance and engineering, while products
from other luxury brands such as Gucci, are valued more for the life-
style they project than for the particular capability or functionality they
embody. While our results show a high level of one-way communica-
tion by all types of luxury brands, our results show the greatest amount
of product information and one-way communication provided by firms
in the automobile sector, which we suggest indicates a desire to thor-
oughly communicate the aspects of technical luxury to consumers
(Fig. 2).
While consumers of products that are more technical in nature
would seem to prefer more detailed product information, fashion-re-
lated products, which are more of a symbolic luxury, might be better
suited to socially-rich website characteristics that provide a degree of
interactivity with the brand (Burke, 2002). Instilling a sense of human
warmth and sociability in this sector is clearly important and this is
accomplished by providing the means for actual interaction with the
brand as well as socially rich text and visual content in the form of
audio and video. Clearly, two-way communication features are much
Branding
3 4 5 6 7 8 9 10
Selling
3 4 5 6 7 8 9 10
Fig. 1. Differences in mean scores for branding and selling.
One-Way
3 4 5 6 7 8 9 10
Two-Way
3 4 5 6 7 8 9 10
Fig. 2. Differences in mean scores for one-way and two-way communication.
less widely-used than one-way communication across all sectors.
Nevertheless, fashion, which seems best-suited to benefit from high
levels of interactivity and social presence, leads the way on this char-
acteristic. This finding supports the work of Hassanein and Head (2005)
who found that clothing and apparel are better suited for socially-rich
website design. This finding also aligns with the work of Bjorn-An-
dersen and Hansen (2011) who observe a trend toward increasing use
of brand communities and social media at luxury fashion brands. In-
cluding a sense of social presence may be less appropriate for the other
luxury sectors because they do not match the experiential requirements
for online customers seeking such products. Indeed, our data shows that
the sector with firms that are most likely to engage in two-way com-
munication through social media is fashion.
Finally, as firms consider whether to use their website for strictly
operational functions or also for innovative functions, we again note the
importance of sales volume. For firms with higher sales volume, the
provision of operational features through the website appears to be
more highly-valued. This is particularly evident in the fashion sector.
Yachts, with their much lower sales volume lag the other sectors no-
ticeably. Differences across sectors are illustrated in Fig. 3. Interest-
ingly, no significant differences were observed when comparing the
category of innovation across luxury sector. However, closer inspection
of specific innovation features such as augmented reality and product
customization highlight some interesting observations. For example,
the use of product customization is more prevalent in the autos and
fashion sectors. Autos are easily customizable because products are
made through the assembly of discreet parts. Customizations are more
common for products that can be modularized relatively easily and
product attributes in this sector are primarily utilitarian and quantifi-
able. The benefits of online customization are also recognized in the
fashion and apparel sectors (Okonkwo, 2010) where customers seek
ways to enhance self-expression. However, innovative features that
permit personalization and the use of augmented reality to improve
product presentation and encourage customer acquisition, is low across
all sectors (Jaekel, 2016).
5.2. Practical implications
Comparing our results with those of an earlier research study on the
8C framework (Bjørn-Andersen and Hansen, 2011) reveals increasing
use of the content, connection, commerce, context, and customization,
at least within the luxury fashion sector. We observe that most of these
website elements are related to selling. This continues a trend towards
online selling that has been observed for the past decade. As luxury
brands continue to move towards more online retailing, there are sev-
eral key considerations they should take into account.
Operational
3 4 5 6 7 8 9 10
Innovative
3 4 5 6 7 8 9 10
Fig. 3. Differences in mean scores for operational and innovative characteristics.
 First, firms can explore ways to replicate the product and the ex-
perience of it in the online environment. For instance, the adoption of
animation, augmented reality, and 360 degree view is low across sec-
tors. This is even true in the fashion sector, with its products that would
generally seem to require a higher degree of assistance and product
contact than other sectors. Furthermore, although product customiza-
tion and personalization lie at the heart of luxury (Kapferer and Bastien,
2012), it is evident from our results that some luxury sectors are not
making use of this opportunity to connect with the luxury buyer with a
customized product or customized experience. Our findings are con-
sistent with those reported in industry publications, indicating that only
23% of luxury retailers are incorporating digital personalization tools
into their online presence (Jaekel, 2016). If luxury brands can enable
interaction with the product using advanced technologies, can also
identify ways to replicate the sales associate interaction online, and also
provide individualized and customized offerings, they will be well-
prepared to create the premium, luxurious, exclusive, high-touch in-
teraction that luxury consumers desire.
Second, luxury firms are encouraged to embrace the move towards
omnichannel marketing that has been witnessed in mass-market firms.
Customers may desire to experience a product in-store, but then pur-
chase online. They may also want to research a product online before
buying in-store. Rather than resisting this trend, luxury brands should
embrace the opportunity to open a new marketing and sales channel
online, one that complements their existing, premium, in-store experi-
ence.
The Internet dilemma of selling online is addressed against the
backdrop of trust in electronic commerce. In some regions, a high de-
gree of trust exists and electronic commerce is well-developed, while in
other regions there is a low degree of trust in online websites, electronic
payment systems, and delivery methods. Luxury firms can take ad-
vantage of the lack of trust in some markets where e-commerce is
nascent by taking a leadership position and demonstrating themselves
to be reputable, trustworthy, and reliable online merchants. They have
the slack resources and profit margins to invest in the order fulfillment
and delivery process, personalizing and customizing the moment of
delivery in order to build trust and enhance the brand. They fact that
luxury firms can offer a reliable, secure online experience is a premium
service that other retailers may not yet offer.
Fourth, in spite of the challenges of the Internet dilemma, luxury
brands should carefully consider the value of the data that can be
gleaned from consumers through the online website. Product searches,
clickstreams, virtual-try-ons, tweets, photos, community membership,
and a host of other features provide a wealth of information about
consumers. While there is admittedly a school of thought that luxury
brands do not do market research and produce what they see as
beautiful and artistic (Kapferer and Bastien, 2012), they ignore market
conditions and the consumer base at their own peril. Failed firms may
have been true to their ethos, but pyrrhic victories may matter little to
luxury firms’ former employees, shareholders, and customers.
As a final note, luxury firms should make their online strategy in
light of the product characteristics that we noted in Section 5.1. Sales
volumes, fashionableness, product complexity, the question of technical
or symbolic luxury, and the need for product assistance each dictate a
unique strategic approach to the Internet dilemma.
5.3. Limitations and future research
We acknowledge the limitations associated with the exploratory and
descriptive nature of our research. The research undertaken is in a field
where literature remains fragmented. The purpose of the current study
is therefore to shed light on the ways in which luxury firms are ad-
dressing the Internet Dilemma rather than attempting to explain it with
cause-effect relationships. We argue that identifying the strategic
choices of luxury brands (website purpose, mode of interaction, and
level of interaction) constitutes a first step in better understanding how
luxury brands are embracing Internet-based technologies.
We also note that additional research methods, additional sectors,
additional brands, additional firms, additional data, and additional
product characteristics would enrich and extend the findings presented
here. Qualitative content analysis was used in the present study; other
evaluation methods including surveys and experiments warrant con-
sideration in future research to examine consumer attitudes towards
luxury brand website characteristics. We also note that luxury brand
websites are in constant flux. Our results are therefore time-con-
strained. Future research, possibly with different methods, should re-
produce this study in order to achieve a longitudinal perspective on the
results. Also, valuable insights could be gained by comparing Internet
usage by luxury firms with Internet usage at non-luxury firms within
the same sector. With regard to additional sectors, hospitality, fra-
grances, and furnishings are among the possibilities for future in-
vestigation. Furthermore, as other sectors are considered, there are
other product characteristics such as search and experience attributes
that could be used to differentiate luxury products. An understanding of
such attributes should help explain differences in the adoption of
Internet-based technologies by luxury brands in their websites.
Firm strategy and the evolution of technological capabilities could
be examined as well. It would be worthwhile to compare the Internet
strategy and website characteristics of firms within each luxury sector
and investigate the profitability consequences of these varying Internet
strategies. Finally, overall changes in the industry-wide approaches to
technology and the capabilities of those technologies could be eval-
uated as well. For instance, the relatively low usage of e-commerce in
the luxury auto sector could be a result of the difficulty of drawing up
the necessary documentation for auto purchase online. As technological
capabilities evolve, this difficulty could potentially be reduced, en-
abling increased usage of e-commerce in the sector. Each of the afore-
mentioned possibilities would generate valuable insights into the ben-
efits of adopting specific Internet-based technologies at luxury firms –
and perhaps also at non-luxury firms.
6. Conclusion
In this paper, we began by making the observation that the Internet
strategy of luxury firms is under-investigated. Preserving the luxury
brand's image of exclusiveness and uniqueness within the Internet mass
medium represents a fundamental challenge for luxury firms. Building
from this observation, we have looked at how these firms can use the
Internet strategically in their marketing, retailing, and customer service
functions. This objective was reached by the content analysis of 92
luxury brand websites across 5 different luxury sectors. Our review of
the extant literature has highlighted the possibilities of digital tech-
nologies for luxury brands with branding, online selling, two-way
communication and innovative uses of the Internet to promote and
customize products as the key activities. Our results possessed good
inter-rater consistency and showed that not all of these activities are
being fully exploited by luxury brands. Our ideas link different website
characteristics to product attributes. We provide insight into how
luxury firms can use IT to accomplish their strategic marketing (and
sometimes retailing) objectives. We believe that a systematic approach
to the use of Internet technologies in luxury firms, should yield im-
provements in brand equity, customer satisfaction, and organizational
performance. We look forward to future research that continues to
examine these issues.
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