In our ongoing series, Brittany Golob explores the reputational issues in the luxury brands sector

British and European luxury brands tend to have a history decades or centuries old and longstanding brand values, a so-called ‘core DNA’, that drives everything from store design to customer service to social media.

But that does not mean they can rest on their laurels when it comes to managing corporate reputation. Luxury brands must actively work to maintain this precarious balance of exclusivity and profitability. Tipping too far in either direction can mean disaster for the brand’s carefully cultivated reputation.

Liana Dinghile, group strategy director for EMEA at Siegel + Gale, describes the tension inherent in a brand whose reputation is based on tradition facing the sweeping change that has, thus far, shaped the new millennium. She says “For most luxury brands, their core DNA centres around quality, originality and a level of personalisation. I think that’s been true for decades, if not for centuries, and they’ve had to find new ways to challenge that [through] new technologies.”

Reputation is based on the established values of customer service and quality of design alongside the 21st century necessity of curating an audience on social media and the brand’s prominence in emerging markets.

For British car retailer H.R. Owen, and its partner Jack Barclay, a heightened attention to customer service have sustained the brand through tough times and solidified its reputation as the premier luxury auto dealer in the capital.

Chris Harris, marketing director for H.R. Owen, says luxury is all about the detail. For companies like H.R. Owen and Penhaligon’s, detail and customer service are key selling points for goods or cars that must be tried and tested before being purchased. They are not, as Harris says, “the most practical way to get from A to B,” but the value of these brands is in their approach to service – be that in the quality and unique design of a new store or the way coffee is served in a showroom.

Harris says H.R. Owen seeks to establish a family of car enthusiasts over the long-term. “The key to H.R. Owen today as a business are many of the same things, we want to give our customers a superior, more personalised sales experience,” he says. “It’s about finding the right car for them. We want them to feel informed about their cars. The idea is that your sales experience is highly personalised and selling happens with the long-term in mind. We’re interested in the sales today being absolutely right so that you stay with us for long period of time.”

For Harris, everything links back to customer service. This is not anomalous to the auto trade. Burberry, which recently opened a digitally-innovative flagship store on London’s Regent Street, has heightened its customer experience in so doing. Dinghile says a multi-sensory experience allows the customer to become immersed in the brand.

Emily Maben, head of global marketing at Penhaligon’s, says the perfumerie’s outpost on London’s go-to luxury location aimed to communicate the brand’s personality and outlook for the future. “Our existing Regent Street boutique was a blank canvas and a flagship location that allowed us to be bolder in our interpretation of the brand. The street has some fantastic retail concepts; therefore we needed something that would make us standout. The on-going regeneration of Regent Street is building the street as a premier destination for shoppers in London, and so it felt like the perfect location to showcase our new look.”

By providing the utmost in customer service brands use the exclusivity of the in-store or online shopping experience to generatea mythology around the brand and create loyal customers. This contributes to the establishment of the brand’s reputation, itself tantamount to brand evolution.

A report by the fashion and luxury brands team at Taylor Wessing LLP says the ‘aura of prestige and exclusivity’ that a luxury brand develops through its attention to service and quality of design contributes to the brand’s reputation. Design can be reflected in the quality of the stitching in a Mulberry handbag or the timeless style of the Burberry trench coat. It can be present in the simplicity of the Louis Vuitton branding or the elegant construction of a store.

Walking into the store of a luxury fashion company should feel just that, luxurious. Part of the customer experience is making the retail face of the company as luxe as the clothes, shoes or handbags it sells. This makes the customer feel as if he or she is being catered to, thus enhancing the exclusivity of the brand to include only those in a position to afford that personal attention.

Burberry has gained acclaim for its interactive flagship, but it is not alone among luxury brands seeking to modernise and readapt their physical locations to meet changing customer expectations. Penhaligon’s, the 140-year-old perfumerie’s new flagship location in London features an impeccable quality of design. Christopher Jenner, the designer, says the store was influenced by the brand’s history and tradition alongside Penhaligon’s experience in the Asian market.

“We wanted to include contemporary finishes and forms into the design to build a bridge between the past and the future,” he says. “To achieve this it was essential for us to look at how to interpret 140 years of heritage in a contemporary manner yet respect the essential characteristics of the company, all the while reinforcing the prevailing brand strategy.”

The development of a brand’s reputation through design is not relegated to the fashion industry.

Torsten Muller-Otvos, chief executive of Rolls Royce Motor Cars, likened his company’s cars to artwork in an interview with Radio 4. “What you normally see is extremely positive reactions towards our cars and you can assume that you don’t see a Rolls Royce very often. Rolls Royce is seen, I would say, as a piece of art,” he says. Similarly, Harris notes the refitting of H.R. Owen’s showrooms and the design quality of its print magazine as part of the company’s strategy to develop lifelong customers. The cars themselves are the best on the market, but the appeal of the H.R. Owen brand is its ability to address the demands of its clientele.

Those demands, for all luxury brands, are now coming from farther afield. Luxury brands must engage audiences both online and across the globe, a phenomenon which puts the established reputation of these brands into uncharted territory.

Though the transition onto social media has been slower for luxury brands than other sectors, Dinghile says that the new digital properties of these brands allows for a completely immersive experience, allowing the brand to travel with customer outside of the store.

Some, like Mulberry’s Brilliant Britain campaign, develop novel content aligning with their brand values. Others promote their offline events, contributing to one of the central aspects of a luxury brand’s reputation: exclusivity. Still others curate content that addresses their target audience’s interests. The most prevalent outlet for digital communications is Twitter.

Le’Nise Brothers, group director at MEC, a media agency, says, “In order to continue to be relevant to existing consumers, whilst also recruiting the next generation of consumers, luxury brands must go beyond a traditional print based communication approach and embrace new digitally focused communication platforms.”

For brands that have engaged with consumers offline for decades, the move to digital marketing can be a slow one. However, Maben says the medium allows a niche brand a valuable outlet for its communications. “Just because we are a brand with 140 years of heritage doesn’t have to mean we can’t embrace new technology,” she says. “It allows us to communicate our personality in a way that traditional advertising could not achieve.”

But brands should not begin tweeting without establishing a well-defined direction and purpose, says Daniel Stern, account manager for social at media agency Essence: “Brands must have a clear understanding of the type of content they want to share on Twitter, and most importantly, that this content is interesting and engaging to their target audience. It is imperative that brands have an understanding of when to engage with their audience directly, and when not to engage.”

However, as in any other industry, luxury brands are susceptible to reputational damage via social media. The exclusivity of a brand can become diluted if it has too many spokespeople or if it’s digital customer service falls short. Dinghile says the curation of content and adaptation of the brand’s core values to the digital space is the ideal approach to social media. Unlike high-street retailers, the focus should not be on promoting products.

Stern and Brothers agree, saying that the careful curation of content will attract followers and maintain the brand’s reputation online. Brothers adds, “A luxury brand can quickly damage its reputation by being inauthentic and not staying true to the image it has carefully crafted over the lifetime of the brand. Staying true to their existing communication strategy and principles ensures that the luxury brand minimizes potential opportunities to damage the brand.”

In 2008, online shoppers spent five times as much money on luxury goods online than in stores. This is largely due to the explosion of popularity of these brands in the world’s emerging markets. The Middle East has been a major consumer of European luxury goods for some years. China itself accounts for 25% of global sales of luxury goods worldwide. Brands are now looking to South America and Africa as fertile ground for luxury sales. However, luxury brands face the dilemma of how to transfer the strength of their reputations from a Western market to markets in which they are as yet unestablished. Though luxury brands rely on their history and tradition to maintain reputation, entering new markets can be manageable.

Tradition is necessary to build the brand’s reputation, but the maintenance of thatreputation is achieved through design, customer service, communications and above all, the adaptation of the brand’s core DNA to new demands.

Vogue China has established itself as not just a luxury fashion glossy, like its cousins in Western markets, but as a women’s lifestyle magazine. Editor Angelica Cheung has built upon the established values and successes of the Vogue brand while addressing the needs of the growing demographic of wealthy Chinese women. Vogue China now sells more copies than its counterparts in Europe’s four biggest markets: Britain, France, Italy and Germany.

This is no different for fashion or auto brands looking to expand into new markets.

Johnnie Walker’s approach to China has been to adapt its global brand values to different cultural environments and expectations. The high-profile customers of its exclusive club in the old U.S. embassy in Beijing, expect luxury experiences, not simply luxury goods.

Reputation in China or the Middle East relies on the same foundations as in Europe or the United States: quality of design, exclusivity of the customer experience and the adaptation of brand values to modern expectations. Personalisation is key, as is tradition, but all aspects of a luxury brand’s reputation harken back to its core DNA, to the things that made it a luxury brand in the first place.