The battle for cyber real estate hots up in the luxury world
Source: Financial Times, May 29, 2014. http://blogs.ft.com/material-world/2014/05/29/the-battle-for-cyber-real-estate-hots-up-in-the-luxury-world/
In a world where online control of both brand name and territory is considered increasingly essential, it is of little surprise that digital land-grabbing by luxury’s biggest players stepped up a notch last week with the launch of a new top level domain name – .luxury
Think it sounds a little gimmicky? That perhaps it won’t take off?
Then maybe think again – because some of the industry’s biggest players in the industry appear to be more than happy to pay the relatively modest $699 annual fee in order to take a stake in this new luxury e-space.
More than 500 top brands and retailers signed up during the initial 60-day sunrise window period on the website www.domain.luxury , including Bvlgari, Bugatti, Chanel, Cartier, Gucci, Perrier-Jouët, Jimmy Choo, Valentino, and Versace to name but a few.
Here are three reasons why.
1. The way the internet has been organized for decades is now in a state of flux
For years website domain names were almost entirely denoted by country of origin such as .com/.co.uk/.fr/.it and so on, although this has become increasingly obsolete . Now more and more specific domain names are opening up, be it for cities such as .london , or even specific industries such as .build (construction) .bar (alcoholic beverages) and so on.
In principle these new category domain names – like .luxury – will, in time, make it easier for consumers and search engines to identify authentic luxury brands and their online operations. And easier navigation makes for easier spending.
2. First mover advantage on the internet is critical – even if purely for protection
Clearly a business doesn’t want its name being used or tarnished by rivals. Even if most of these brands never actually develop their .luxury domain name, they certainly don’t want any potential profits to be reaped by others.Take the stake, then cultivate it later.
3. Because of the luxury counterfeit endemic, this is particularly important to the uber brands
The man behind the business, CentralNic CEO Ben Crawford says:
“The fledgling .luxury space is designed to be a piracy free zone, where there are rules reinforced by the community to ensure that there is zero piracy or the unlawful selling of counterfeit products that has taken hold of the old fashion domain space. There’s a real need for this and brands have been responding with great enthusiasm to it.”
That is to say, its not all about simply cultivating the sense of an exclusive clique (which we know is key to any luxury marketing); there’s also a firefighting practicality here, by literally gating the community and monitoring who comes out and all who come in.
I’m not sure we will see any seismic shift in how the major brands treat the .luxury domain anytime soon -for one thing I think the idea is slightly tarnished by the fact that the bespoke domain name is ubiquitous if any old industry in the world can have it too.
But at the same time they clearly see it as potentially valuable real estate. Should we too?