Guillaume Galabert Kush Katti

Chloé Lebictel Nicolas Pech

Aïda Permorady Jessica Sarrade

DIOR

“THE GOLDEN PLACE ON THE WEB”

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Content of the case

Dior Company was founded in 1946 by fashion designer Christian Dior with the help of Marcel Boussac investing 60 million. It starts well in the fashion and haute couture. In February 1947, Christian Dior fashion ignites after the war with his first show, the result of an intensive collaboration with his team. This is the birth of a new woman, a radical design: size arched, chest high, round, narrow shoulders, legs uncovered up to 30 cm above the ground. A visionary, he left for the United States to conquer this market booming in 1948, less than a year after launching its first collection. The world organizes parades around the globe. He is the designer of the stars. In 1957, the house provides more than half of the exports of French couture, and Time Magazine devoted to the A's. In eleven years, extends its business in fifteen countries and provides employment for more than two thousand people.Revenues that have been successful and which are currently the success of Christian Dior are very characteristic of the mid-luxury bordering on excessive creativity, quality, passion, innovation, culture, concept of dreams and artistic sensibility. This alchemy of the product, combined with sound financial management, allows the fashion house to remain sustainable.Since taking the role of artistic director in 1999, John Galliano has led the brand through a metamorphosis of all kinds. As a result, Dior today is still perceived by consumers as prestigious and glamorous, but with Galliano at the head, the drawings themselves (especially the female division) took a turn for fashion. The new Dior Electric is bright, flashy, colorful and new rich, indulging Galliano flair for resourcefulness and imagination.

The brand identity of Dior is showed by its communication. The communication is a show time and a spectacle. That’s why Dior decided to use celebrities like Charlize Theron, Jude Law, Marion Cotillard, etc…The aim sentence of Dior is “fashionable and fabulous”.And it's just a Woman Dior! Like its models, Dior Men is a completely different experience in the look and feel. It starts with a short story, the tone of the collection, which shows the perspective of a man with a broken heart. The main page is a square of black entertainment on a pristine white background, with flashing images of the latest creations Dior Men, example with Jude Law and his video on the net.

To be aligned with their brand identity, Dior has to work on its positioning. Dior focuses on the brand of hyper self-centeredness. Dior puts a woman on a pedestal that looks itself (see the mirror-Dior medallion), which flips his diary, ignorant of the outside world, a woman "I love" that adulates itself when its fragrance is preferred. This elitist attitude is quite possible for a luxury brand, in contrast to other sectors that need to focus on humility, when they interact on the net.

Even in the movie Lady Dior, the brand takes an oversized product placement: that’s why Marion Cotillard is used with for example out of her bag a dozen Dior cosmetics.Dior creates his positioning with a new woman, bold and unique. The brand is now a mass of consumers who can identify with many models of women falsely empowered and smart:

– Women French touch (Marion Cotillard for Dior Couture)– Glamorous fatal women (Charlize Theron for Dior Cosmetics)– women child (Natalie Portman, Miss Dior Cherie Perfume Christian Dior)

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All this types of women, models illustrate the Dior Attitude who they are born of women without complex strategic turnaround of the brand in 90 years and more precisely a cosmopolitan women. We can see that on the different advertising which does Dior all over the world with one celebrity Marion Cotillard but in different scenario. Dior us to follow through these ads and Marion Cotillard Lady Dior saga in major cities worldwide including London, Moscow, Paris, Shanghai, LA, and New York while taking the shape of each of these women of different nationalities

Dior changes completely his strategy to a masstige strategy. The term “masstige” comes from the contraction of two words: “mass market” and “prestige”. The masstige, it is the alliance of a prestigious brand and a brand of mass market. Also, masstige means that the luxury brand makes accessible the luxury to every people. One of the most famous examples of masstige is the collection made by Karl Lagerfeld for the brand H&M. Indeed, from 1947 to 2009, Dior’s strategy has changed dramatically: Dior diversifies its business: the status of haute couture luxury brand, but also as brand Fashion and Beauty upscale (Perfumes Christian Dior) while maintaining its strong roots will luxury. Dior is expanding its target of women in elite circles to the upper class consumers. Dior is changing its culture to brand: Christian Dior designer cultivates a reserved attitude to clean while the romantic genius John Galliano is a showman who favors dramatic. Accessories and perfume before completing the look of a beautiful woman single parent now they different models of Women extravagant and shiny. The arrival of the brand John Galliano for Dior Couture even allows returning to profitability at the turn of the 90s. Sales totaled 765 million Euros in 2008.Dior brand, such as French brands with similar stories and crafts (Chanel, Yves Saint Laurent, Jean-Paul Gautier), used the business model of the pyramid as explained Jean-Noel Kapferer and Vincent Bastien forces in Luxury: the business model of the pyramid. The main risk associated with this operation is already considered the contamination at the base, for easy money. At the extreme, as seen for many brands of sewing, there is still a top, embodied in the parade, but there is more room to offer intermediate focus is on the basis of products and easy to sell high margin products, where it is cheapest. The products of the bottom of the pyramid are not responsible enough in quality and creativity, but enjoy very high margins in excess of 80%, because the value of dreams, which continues for some time, is much higher than the value in use, which becomes almost zero due to the decline in quality perfumes.

The risk of going too masstige for luxury brand

Do the digital presence is a risk for luxury brands?

The sales via Internet “rocket”, the request for the luxury goods. The question is to know if the consumers are ready to buy luxury items online, and thus to give up the “prestige” of the purchase in shop. Indeed, at the time of a purchase in shop, customers appreciate the care of details, the attention and pieces of advices of the salesmen…However, net surfers frequent more and more the sites of luxury to discover the products, and of course prices.Well-known in the United States, the sales of luxury goods online emerge in Europe. The large houses of luxury, couture houses, wonder about the place which Internet in their strategy of distribution must play on the European market.The sales of goods on line is already fixed but it should still develop under the impulse of famous brands leaders such as Dior, Hermès, or Vuitton, which opened their online shop at the end of 2005 and at the beginning of 2006.

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Several models of distribution of the luxury products on Internet are possible and are already done. The determining factor lies in the selectivity of the site; the challenge for the large houses of luxury is to popularize their brand image but not so much. It’s important to find the balance between the image of the luxury and the novelty of new process, such as the sales on line.It is thus a question of determining if it is convenient for the famous brands of luxury to market their products on line, while preserving their brand image and by avoiding the cannibalization of their sales in shop.For that, we will study the market of the luxury on line, then the behaviors of purchase of the consumers; finally, we will study the various strategies set up by the large houses of luxury in order to market their products on line in a relevant way.The market of the luxury online and the e-commerce (the context)

The product purchase of luxury on line is a practice for the consumers; they are familiarized with the Internet tools. However, 53% of them are said ready to buy on line a luxury item not requiring a fitting. Internet remains very often information means and a source of inspiration for the consumers, but now can replace the traditional purchase in shop. It’s a reality, the sales of fall have less success than before and people buy more and more on internet (see figure 1).Evolutions and perspectivesThe worldwide market of the luxury approaches a turnover of 153 billion euros for the year 2009. The biggest part of the sales in this sector is realized in Europe. Paris remains still today the undeniable capital of the fashion world.A world leader, L'Oréal, and large houses renowned universally like Chanel, Clarins, Dior, Givenchy, Guerlain, Yves Saint-Laurent make it possible to France to be the world's leading exporter of this sector in front of the United States with 30% of the international offer.Started in 2004, the resumption of the market of the luxury was confirmed in 2005. There is an evolution of the behaviors of purchase, and thanks to a certain democratization of the luxury (see figure 2).Furthermore, the sector of the luxury occupies a very important place in Europe, in the United States and in Asia, where you find consumers very fond of products top-of-the-range (see figure 3).Moreover, in these geographical sectors of the world, consumers use Internet regularly, and thus represent a formidable opportunity for the houses of luxury which wish to market their products on line.According to a report of the FEVAD (Federation of the companies of distance selling), during the 3rd quarter, the whole of the sites of sale on line saw its turnover increasing from 2% compared to the 2nd quarter 2011 and 23% over one year. The progression recorded during the last quarters continuous to be doped by the progression of the number of French people who buy on Internet. According to Médiamétrie, the number of cyber-purchasers leaped of 3.2 million over one year. Now, France counts 30.4 million purchasers on line.In a general way, the consumer perceives initially the Internet sales like the privileged network of the good deals and the discount. This image of “low cost” is not easily compatible with the product sales of luxury on line.And yet, nearly 70% to the consumers of luxury bought or plan to buy luxury goods on line. The generalization of the high-speed Internet, the development of rich interfaces and the video make it possible to retranscribe the universe of the purchase in shop, and thus to reassure the customer.Today with Internet, the consumer appropriates the act of purchase: he/she buys where he/she wants and when he/she wants. New service for the consumer, the e-commerce is for the salesman a major asset of the knowledge of the customer (how to better know his customers

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than by preserving a history of their purchases?). Internet makes it possible to reinforce the proximity between the brand and the customer, and the sector of the luxury cannot be allowed to stand apart from this mode of distribution.At least, people in the world go more and more on social networks. These social networks became a huge part of our lives and many people are addicted of if. Facebook, Twitter are the main social networks that people use. And luxury brands cannot ignore this tendency (see figure 4).Advantages and recommendations

Nowadays all the firms are on internet and all company had their names on the most known social network. And everybody know that we can read a newspaper on internet so the trend is that the magazine and the press are going on electronic devices and there is a rise of the digital world and the social network so the luxury brand must be part of it. But the challenge they had is that their image has to be irreproachable like in the stores. Those firms must be more attractive than “basic” firm websites like in the street when we saw a luxury shop we know that it’s a luxury brand because the front row is attractive and beautiful. Indeed, the interest of a shop is to make discover to the customer the universe of the brand, universe which seems difficult to retranscribe on a website. The brands must then transpose the luxurious atmosphere of the physical shops on a virtual site. In the case of Dior, their product are only sold in their shop who are located in the most renowed capital of the world, and we all know that in those place the access to that shop is very hard because of the traffic jam and because there are a lot of tourist into the shop and they are always crowed. All of that conditions are not taken in account with internet because you don’t have to move and so you don’t have to lose one day just for buying some shoes or something else and you can buy at any time of the day and everywhere in the world and that is very important. Thus, internet makes it possible to mitigate the geographical and temporal difficulties. It’s a huge advantage. Internet respects the environment because you don’t have to take the car and move when you want buy a product. Luxury brand must be part of it business. Houses of luxury such as Hermès or Dior then created splendid sites, which, thanks to the versions “flash”, bring a luxurious completion. But we can add that the site of Dior is nice of course, but there is no innovation, no game (indeed, to create a game, such as a labyrinth, is a way to be different from others competitors for example). Dior has to be more creative, innovative and to change the content of the website.The internet device is very attractive because it’s a free access to the information at any time and everywhere in the entire world, and now we have some more and more chats who are talking about all kind of product. For example if you want to buy a Dior bag, before you will go on internet and tape the name of the product and saw what is said about this product some customers who have bought this and talk if it’s a god or bad product in order to have more information than the brand information! Also, internet makes it possible to know better the customers, but also the best way to develop customer loyalty (thanks to the tools of CRM), and thus to make them personalized offers. Indeed, the brand could follow its customers because when they buy a product on internet they must tape some personal information about themselves and they can pester them for special events (for example for private sales reserved to internet customer).

So luxurious brands have:* To think large: beyond the product, all the asides must be perfect: from packaging to the strength of sale, each element must charm the customer.* To create the addiction: to use the concept of limited series in order to create the desire.* To stimulate the curiosity for the brand.

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* To create an experience of brand: to give to the customer the impression of a unique experience (innovative site). * To feel privileged: limited series, sales on line for the best customers, so you feel “unique”.* To acquire new customers with the social network because they created an attractive page with fans and they refresh the page every day in order to make it very attractive for fans and potential new customers. But they have to make their image very clean and reflect the image of the brand by treating well their web image and ad the same services than in a real store. The customers of luxury items are made up of regular visitors who wish to indulge, and who have the means (money), but also people of average CSP who are ready to spend for a product from time to time. Thus, the challenge for the houses of luxury is to satisfy the needs for each customer, while preserving a prestigious brand image. Internet offers opportunity to the brands to be well-known universally, widening their customer catchment area, which corresponds to the general tendency of strategy of globalization of the brands. To answer the proverb “to think overall, to act locally”, new technologies developed because of an increasing demand of the companies.The luxury brands have many advantages: attracting, convincing and establishing customer loyalty on line: • The newsletter, it goal is to communicate information, innovations, events and other current events of the brand• The forums, net surfers have the “right” to say what they want, to share the same interest for a brand, and in certain cases to create a dialog between the company and its customers (very novel)• The plays, which permit to create interactive modules to make react from net surfers on the product or the brand• Online competitions, creating a new and dynamic participation of customers and development of consumer loyalty, playing for the pleasure

While permitting to the consumer to go further, a brand of luxury creates an additional dimension, an added-value around the product by implying the customers more.In spite of its specificities, the sales of luxury goods on line attract the consumers, and the request increases regularly, more and more. It is important for the sites of the sales of luxury goods to attract the customer, to encourage them to visit the site, then to win the customers’ trust in order to start the act of purchase. The main wait of net surfers concentrates mainly around the act of purchase. Thus, the brands of luxury have to gain much on Internet. So the digital presence is not a risk for luxury brands.

Maintaining club effect via social media and networksHow digital presence gives more control to the brand?

So, as we saw in our first part, we can consider that in fact, going on social media and networks, as offering more and more product or services available via internet, has not so bad impact on the image for luxury brand like Dior. And we are going to argue the advantages – and drawbacks – that those canals can bring to our brand answering this short question: How digital presence gives more control to the brand? We think that going more and more web 2.0 is a good solution for Dior if its aim is to be more international and VIP at the same time avoiding a problem of “masstigisation”.Customer Relationship Management (CRM) and toolsFirst of all, we have to start with a little review of the tools Dior is using today. Indeed, they engaged a private company which name is Publicis Dialog Worldwide directed by David Gompel and Dorathee Corgnault. The employees of Publicis were engaged in order to build an image of Dior through the internet businesses. For this reason, David Gompel choose,

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under the authority of Dior, to develop a presence for Dior on Facebook, Twitter, through different application on the new mobile generation like Iphone, or by creating a YouTube channel on YouTube. Dior also decided to compile is website with a new one few years ago, and we are going to present all the tools starting with the last one.

We can access the Dior website thanks to this link: http://www.dior.com/couture/fr_fr selecting our language and by one click on the Enter onglet. When you enter to this website for the first time you should imagine that is will be a big experience but in fact you can be disappointed. The website of Dior is not as good as we’ll imagine or maybe attending for. It only shows the different branch of Dior brand: Fashion & Accessories; Fragrance & Beauty; Jewellery & Timepieces or Event by Dior. The website is not an experience by itself and there is no added value at all. It is just a list of product – beside the fact that the pictures are quite good- organized by categories and with some other videos presenting them or the company and more details on the high range of product currently sell by Dior. We can conclude regarding this first tool saying that is not enough for Dior to develop is brand with a so poor website and moreover at a low level in consideration to the high level of this luxury brand.

Coming to Facebook and the fan page of Dior, we can see that they have almost 5.7 millions of fan that subscribed to them and a large number of “I like” for each new post on the page. This second tool enable Dior to divulgate all kind of new information around its brand and products. Each time they are going to open a new store every fan, around the world can access to this information, and moreover share it to its own community of friends through it. With this possibility of sharing, Dior is able to reach everybody on earth at any time. And maybe a person who was not a fan could become a fan of Dior Facebook page if a first-fan of the page shared it to her. We think that a Facebook page is a great and powerful tool to reach people and share information. They can also deliver new campaign of fragrance, jewellery and so on thanks to it.

An other tool used by the private company is the Twitter account. For this tool they decide to develop different accounts for different purpose or product. If you are on Twitter you can see a global account for Dior but also an account for each product. We think that this separation is a good way to bring specific flexuous image for Dior and permit to the company to attract people like with Facebook. With different account, one global and different others for branches and products they are able to deliver a message to different targets and on time at the good person following them. Like on Facebook, and because twitter is the best actual tool for short messages and gossips on real time with interaction they can built a strong image, or at least make buzz marketing, and a community on internet. Nowadays, Dior has around 20.000 followers on its global Twitter account.

Thirdly, with the mobile business expanded market, Dior decided to go on the AppStore in order to deliver an Iphone application for the kind of people who wanted to get information through this media. If we had only one thing to say about this application it should be the fact that the application is very low to download and it does not deliver so added value information to its public. If you check to the Dior application it is only a second way to deliver the same message they already have on their website. We can access to the videos from the website, the pictures of the product, and, that’s it. They do not really create a new message of the brand with this application. And they can certainly go ahead delivering something more than just a copy of their website with game applications for example.

Finally, they also develop a huge video channel on YouTube: The Official Dior Channel where they have 112 videos with 8500 subscribers and a total of 7.4 millions views. This channel regroups all the videos recorded by Dior on a single account. You can easily access to the products presentations, videos of advices on how to use Dior make-up or to the latest news for example. We think that this last tool does not have a great impact on the Dior brand image but we consider it as a supplement in its campaign of communication. Moreover,

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it is the video what permits Dior to adopt the phenomenon of storytelling. The last campaign for Lady Dior is a good example. Dior record long ads – indeed, short movies- around a new product. We can also refer to the Dior Men Allure fragrance campaign with Jude Law in which we saw some product of Dior in only one short-recorded story.Advantages and expectations on social media for Dior

We can observe a huge number of advantages and expectations for Dior as regards the digital strategy and its implementation within the company. We can notice that Dior has more control about the diffusion of information because it is only Dior that creates and implements information about its products, events. Dior has also the control on the diffusion of the Publicis Dialog Worldwide‘s information. Then, Dior has a better reactivity to share news on the company because with Internet Dior can share a communication simultaneous all around the world; It is very important because when Dior brings out a new product each person has the same information, so there is not mistake about the content of the message.

A second advantage it is that Dior create a closest and direct relationship with consumers, buyers, media etc...Indeed, Dior is more accessible for all because before, the Dior’s strategy was to implement itself just on the big city but now with the digital strategy Dior is everywhere. It is easier for consumer to buy online instead of to take transportation to go on the shop if a person lives far of this big city. It is a saving of time and money for consumers, so they can spend more money for the Dior product. Nonetheless, consumers can’t access and buy all the range of products online for example the range of Dior clothing. Moreover, there is a better awareness about Dior’s information, because the company can share all information on internet and it is less expensive to communicate thanks to internet. Thus, people all around the world can have access at information of their choice. Dior wants to create a buzz around its brand to be more known because there is no denying that internet is the better mean of communication nowadays. Dior offers a new experience on the luxury market with this digital strategy because the company is the pioneer in web 2.0 in this sector. Dior is the first to experiment and implement things like application for I-Phone. Thanks to this digital strategy, consumers can have more experience to experiment like with games on Facebook or on the I-Phone. It is enough to go on internet to have access at the brand, so it is unusual for consumers, because they have habits to go on a shop to have access at the Dior’s world. Consumers can customize this experience, for example with an I-Phone application that sends a message according the colours of lipstick of their choice. A consumer can also, via internet, subscribe a demand to receive newsletters on either beauty product, or Dior couture, or both.

An other advantage, Dior offer advices on this collection and products for each consumer according the look, or the colours of eyes etc...It is adaptive of each consumer and a consumer of luxury brand is very tied of this relationship. The consumer feels more important if he feels exclusive and unique. These advices permit to reduce complains of consumers. Indeed, consumers can explain their recommendations or just their comment on Facebook or Twitter. We show on a study that the majority of comments on Facebook is positive, so that transmit a positive image and a good communication for others consumers.

Dior’s digital strategy allows reaching younger and future consumers because Facebook, Twitter is the trend for this age bracket that it is more and more young. Finally, this strategy builds loyal consumers and a younger community. Indeed, consumers can follow at every time and everywhere information which may be of interest. This strategy can make consumers more addicted at the brand.

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Conclusion, critics and perspectives

Dior is now able to combine both retail shops and an online community and keep an integrity brand because Dior is accessible all around the world and share all information about its brand. Its own community is not an addiction of individuals but consumers producing content for the brand because consumers can add comment of added value in each mean of communication such as Facebook, Twitter etc... Nonetheless, Dior has to make some efforts in all the supports in term of quality, content, and first of all exclusivity. Indeed, in order to keep its luxury image, Dior has to ensure that consumers feel unique. Thus, Dior has to create more private events or private sales.

To remain in harmony with their era, Dior has to create new things, to try new things. But in order to maintain the adequacy with their customers, Dior must keep a certain standing. Thus, even if they use communication strategies close to those of the products of mass market, the professionals of the luxury use all the means at their disposal. So they appeal famous photographers and artists of their age to work out sophisticated productions.Dior has to develop an accessible luxury and to demystify their image: what is called the “masstige”.The phenomena of diversification and extension of the brands seem to be an obligation for any luxury brands today wishing to develop its turnover, to reach a wider clientele while increasing its fame. Numerous sectors in the environment of the luxury are accessible and could forecast new diversifications. In accordance with the universe of the brand, only a sharp coherent creative strategy, will enable and long-lasting future.Moreover, Dior has to be careful about their new stylist, Galliano is gone and they have to find a new charismatic and incredible stylist like John Galliano.

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Appendices

Figure 1

Figure 2

Figure 3

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Figure 4

References

-« New luxury brand positioning and the emergence of masstige brands” Truong, Yann; McColl, Rod; Kitchen, Philip J. Journal of Brand Management, Mar2009, Vol. 16 Issue 5/6, p375-382- “Is CRM for luxury brands?” Cailleux, Hugues, Mignot, Charles Kapferer, Jean-Noël ; Journal of brand management; Mar2009, Vol. 16 Issue 5/6, p406-412, 7p- “The social network roadmap” Michel Campan, 2010- “Luxury as the Opposite of Vulgarity: A Trio of Perspectives on Luxury Brands”, Mignon Reyneke chapter 2 LUXURY BRAND VISIBILITY IN SOCIAL MEDIA, 2011- « Dior une place sur la toile » :http://casesinmarketing.blogspot.com/2011/11/dior-une-place-sur-la-toile.- « Etude Luxe : 2011 toujours en croissance mais… »:http://www.fashion-dailynews.com/conjoncture/etude_luxe__2011_toujours_en_croissance_mais_.html- « Armani club of network effect”:http://casesinmarketing.blogspot.com/2011/04/armani-club-of-network-effect.html- Dior & LVMH : The franch business model for fashion & luxury (A digital element): www.eurbanista.com/dior-the-french-business-model-for-fashion-luxury/-« Quand les cosmétiques Dior se repoudrent le nez » :http://www.webandluxe.com/12/2010/quand-les-cosmetiques-dior-se-repoudrent-le-nez/- www.lnt.ma/madame/flashmode-l-ady-dior-14907.html-« FlashMode L.Ady Dior » :http://www.lnt.ma/madame/flashmode-l-ady-dior-14907.html

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Useful links

- Dior official Website : http://www.dior.com/couture/fr_fr- Official account of Dior on Twitter: https://twitter.com/#!/DIOR- Official Fan Page of Dior on Facebook: http://www.facebook.com/Dior- Publicis Dialog Worldwide: http://www.publicis.com/- www.buzz2luxe.com - www.strategy.fr - www.wave.wavemetrix.com - www.journaldunet.com

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