Monday, October 18, 2010

Luxury Brands and Online Customer Reviews

Interestingly, many luxury brand firms have resisted allowing customers to post on-line reviews of products for many years. Things have begun to change though. As the Wall Street Journal reports today, some luxury brands have followed the lead of Nordstrom, which began enabling customers to post feedback about products last fall.

Why have luxury brand firms been late to the customer review party? Well, they like to think of themselves as being on the leading edge of fashion. They do not want to be seen as developing products simply by focus group and customer survey; instead, they want to be pioneers who bring new creative ideas to their customers, ideas that perhaps would not have even come to the usual customer's mind before they see them on a store shelf.

While I can understand the rationale of the luxury brands, I think they ultimately must embrace customer reviews. Whether it's on their site or not, customers are talking about their brands and products on-line. Ignoring the power of customer reviews seems a perilous move. After all, reviews can not only provide the company important feedback; they also create network effects. By that, I mean that customers will derive more value from a luxury retailer's website as the number of users go up, if many users are offering interesting reviews. Amazon, NetFlix, and others all benefit from that network effect phenomenon. Why should the luxury retailers miss that opportunity? Finally, just because customers are offering that feedback does NOT mean that luxury retailers can't still be fashion pioneers. What it does mean is that they can't simply blame the customer when a new product falters. In the end, fashion isn't leading edge unless someone chooses to actually wear it. Blaming the customer never gets you anywhere.

No comments: