Master of Narrative: A Case Study of Chanel’s Digital

Marketing Strategies

Brand Overview
Chanel S.A. is a Paris-based fashion house founded by Gabrielle Coco
Chanel in 1909 (Samule, 2011). Chanel is recognized as one of the world’s
most valuable and established brand, which specializes in luxury goods,
such as haute couture, handbags, perfumery, cosmetics and so forth
(Samule, 2011). The company is currently owned by Alain Wertheimer and
Gerard Wertheimer, the great-grandsons of the early (1924) Chanel partner
Pierre Wertheimer (Samule, 2011).

Featured by its iconic items, the “little black dress”, the Chanel No.5
perfume and the Chanel suit, it is a brand that interprets simplicity,
sophistication, liberation and anticipation. At the center of the brand’s
identity, its late couturier Gabrielle Bonheur Chanel plays a central role in
establishing the brand DNA elements and its core values. Being an
adventurous avant-garde in experimenting different fashion styles, Coco
created new dressing styles and revolutionized the fashion industry by
using the basic elements to incorporate elegance, originality and class
(Samule, 2011). Through ceaseless efforts across a century, Chanel
ventured into different areas of the fashion industry and gradually became
one of the most important global leaders in the luxury industry.

Chanel’s enduring success is not only attributed to its rich legacy, but also
to the company’s astute evaluation of the markets and its ability to adopt
pertinent marketing strategies. Due to its artfully built campaigns to appeal
to different consumer segments, it is named the Luxury Marketer of the
Year by Luxury daily in 2013 (Luxury daily, 2013). Targeting high-income
women from 23 to 80, Chanel takes advantage of celebrity endorsement as
part of the most transparent strategies in their campaigns. Celebrities
including Nicole Kidman, Blake Lively, Keira Knightly, Audrey Tatou, Kritin
Stuart, are closely associated with the brand image by creating ideal
identification for a wide range of consumer segments. As for digital media
campaigns, the brand demonstrates its competiveness by combining its
dynamic creativity with the stellar heritage. While playing with a variety of
digital elements, it enhances interaction with customers and strengthens its
core brand identity with powerful storytelling. As a consequence, the
company saw an increase of revenues in all categories in 2013 and opened
nine new beauty boutiques (Forbes, 2014).

However, although e-commerce has become a phenomenon in retail

business nowadays, Chanel still insists that its customers go into a physical
store to purchase the handbags and clothes, aside from fragrances and
cosmetics. The company justified its reluctance to turn to online sales by
emphasizing the importance to see, to fell and to understand the clothing,
which consists a part of its fashion philosophy (Mau, 2014). It is also
perceived as an effort to maintain the exclusivity of its products. Compared
to other fashion business that earns significant sales online, Chanel’s
digital initiatives aim at attracting more customers to the stores, a way in
which they can directly interact with them. The objective of digital
campaigns of luxury brands like Chanel is not merely to increase sales, but
more essentially, it is to preserve the quality of the brand and continue the
success story for another century (Mau, 2014). Although the absence in e-
commerce for handbags and clothing might mean missing opportunities for
sale revenues online, such a decision is in accordance with the brand’s
diffusion business model, as ready-to-wear represents a small portion of its
overall sales income.
Storytelling in a digital world
Given that storytelling enables conversations between consumers
and the brand in terms of unconscious and conscious levels of thinking
(Woodside, Sood & Miller, 2008), it is one of the most effective approaches
to establish relationship between the essences of the brand and the
consumers’ self-identity. To communicate the core values of the brand to
the consumers, Chanel takes advantage of its rich history and the symbolic
figure behind the brand, Gabrielle Coco Chanel. To articulate the brand
identity in a narrative way, Karl Lagerfeld, head designer of Chanel, has
directed several mini films to revitalize the brand image. Key elements in
such fashion films include city of Paris, brand history, feminism, pursuit of
perfection, etc. For example, in the film “Once upon a time…”, Karl uses
the form of silent film to retell the story of the origin of the brand. Tracing
back to 1913, Coco Chanel began her fashion business with simple
minimalist hats, which contrasted the over-embellished styles at that time.
Although rejected by the mainstream consumers at first, Chanel managed
to develop a clientele of affluent, strong-minded women (Noakes, 2012).
These women know exactly what they want and appreciate styles that go
against the grain. The short film highlights Chanel’s unique style in tailoring
and the use of unexpected fabric, while revealing her rebellious spirit.
Besides revamping their official website to enhance engagement, the brand
positions itself across multiple platforms to tell compelling stories
concerning its culture, values and identity. A content-based microsite,
INSIDE CHANEL, was launched in 2013 to invite consumers to look into
the life of the creator, along with the evolution of the brand and its products
(Lamb, 2011). Using a true narrative approach, the site includes ten
chapters of short videos that tell the unique story behind the brand’s iconic
items to allow consumer to better comprehend the core values of its identity
as well as the heritage of the brand (Fayer, 2014). The microsite presents
the brand’s story in a chronological way. The content of the videos is
concise and compelling, making it a cultural experience for the consumers.
For instance, one of the videos “Coco-Inside Chanel” features the life story
of the brand founder. It summarizes how Coco reinvented herself, from a
young orphan to an independent successful woman. The inspiring story of
Coco Chanel resonates well with its audience; as a result, the video earned
6,863,855 views on YouTube and was shared on different social media
platforms.

One of the key lessons from Chanel’s storytelling campaigns is that a

strong narrative with good content is central in a digital marketing strategy.
It aims at deepening consumers’ understanding of the brand and its culture
to create intrinsic motivation to purchase the products. The content of the
Chanel stories not only demonstrates the core elements of the brand, but it
stays true to its legacy and expresses the brand’s values and identity in a
creative and powerful way. What encourages the audience to share the
videos on their social network is the inspiration they receive from the cult of
the founder and her revolutionary spirit. The success of crafting intriguing
stories is attributed to the deep understanding of the brand’s customer
profile. The existing and potential customers of the brand are not only
affluent and fashion-savvy, but most are also knowledgeable, educated and
informed. They consider the brand they use as a tool to communicate their
identity and personal values to the others (Schembri, Merrilees &
Kristiansen), therefore such value-expressive stories can attract their
attention and resonate with them on a higher level. As Coco once said,
“Fashion dies, style remains.”, it is the same with the online strategy in the
marketplace today. No matter how rapid the digital world is transforming,
how much we are changing our way to communicate to the customers,
good content remains. While conveying the brand knowledge to a larger
community, the brand successfully creates long lasting effects in the minds
of the consumers.

It is true that Chanel excels at telling good stories to cultivate customer

loyalty, however, most of the content is largely based on the life of Coco
Chanel or stories produced by the marketers. Although consumers can
choose the content according to their interests and share the videos on
social networks, they cannot truly interact with the stories or even become
part of the story. Instead of contributing all the efforts to conveying the
message of the brand, Chanel should consider to promote more two-way
conversation with its core customers, which allows them to participate in
the narrative of the brand’s stories. The brand image should not be static
and homogenous; instead, a combination of the traditional and new
elements can add more energy to the brand identity. Research in consumer
psychology indicates that people tend to think in a narrative way rather than
in an argumentative way (Woodside, Sood & Miller, 2008). Individuals are
inclined to make sense of the information acquired by telling stories
(Woodside, Sood & Miller, 2008). It also suggests that a lot of consumers
are motivated to narrate their experience with a brand via a variety of
platforms (Woodside, Sood & Miller, 2008). One approach to engage the
audience in storytelling is to create a digital campaign to invite the
customers’ to narrate their own stories that are related to the brand. The
company can launch a campaign online to collect stories from the audience
and select the most compelling or inspiring ones to distribute through social
media. The selected stories should illustrate the customer’s lifestyles or
values in accordance with the essences of the brand. To correspond to the
style of the brand, the stories can be presented within a few lines that
describe the storyline or reflect a kind of life philosophy, a state of mind,
along with a photo that features the storyteller and her favorite Chanel
product. It is likely that the target audience will resonate with the stories,
since the storytellers are mainly from their reference group. As for the
audience that participate in such campaigns, telling their own stories can
bring pleasure as well as a sense of archetype fulfillment (Woodside, Sood
& Miller, 2008), which will solidify the brand’s relationship with the existing
customers.

Social media platforms

Today Chanel is targeting a group of customers that are independent, free-
spirited young elites. As this group of consumers is dependent on the
digital means for gaining information, it becomes inevitable for Chanel to
position itself on social media platforms to reach its desirable audience.
However, it seems that Chanel is discreet and even conservative when it
comes to social media. With 6.74 millions of followers on Twitter, it has only
1005 tweets since it joined the platform in 2011 (Twitter, 2015). Moreover,
although it is using Hashtag extensively, no further interaction with the
audience is observed. It is adopting a “broadcast” strategy to mirror its
campaigns offline, which means that it emphasizes on pushing out the
content, rather than interacting its audience in the first place (Noakes,
2012). Regardless of the comments and shares of its content, there was no
response from the side of the brand to address some of the comments
about its campaigns. It can be seen from the posts on its social media
account that Chanel’s focus is still offline, as its use of social media is
mostly event and content driven. In most of the posts, it invites the
audience to watch or read relevant content from its campaigns or to visit its
websites for more information, but it rarely uses social media as the base of
its campaigns. It is the same with Facebook and other similar social media
platforms. Consequently, aside from some excellent content that grabs
attention online, few campaigns of the brand have truly relied on the power
of social media. It is also difficult for the brand to evaluate how well their
messages are received among the target audience.

As a prestigious luxury brand, Chanel is taking an exclusive or even

arrogant stance on social media, making it seems to be present and absent
at the same time. It provides the audience multiple accesses to the
valuable content they produced, while staying distant from the comments
generated by the content. The rationale behind such positioning and
strategy is to stay consistent with the brand image and its luxury identity,
based on the understanding of the mentality of luxury consumers. As
indicated by the research of Riley and Lacroix (2003), the majority of luxury
marketers viewed the Internet posts both opportunities and threat to the
brand. Compared to the direct contact and service in a physical store, the
importance of social media in maintaining the relationship with customers
or providing relevant service is usually less emphasized by luxury brands
(Riley & Lacroix, 2003). For luxury brands, social media is likely to fulfill an
information role, but less likely to function as a relationship management
tool (Riley & Lacroix, 2003).

However, social media can be a powerful means to construct stronger

customer relationship if its potential to interact with the audience is better
exploited with a balanced and suitable strategy. A content analysis of the
digital elements of luxury brands revealed that there was a lack of
interactive customization and segment features in the use of social media.
On the other hand, it is indicated in the research that more than a half of
consumers did not perceive Internet, social media included, as a means to
establish a relationship with their preferred luxury brands (Riley & Lacroix,
2003). Faced with the increasing importance of social media in consumers’
daily life, it is time for Chanel to reflect on a new model for relationship
marketing, while not risking the image of the brand. Relationship marketing
has always been a key element that contributes to the success of luxury
brands; for example, the initial success of Coco Chanel is largely attributed
to the close connections with the fashion community in Paris. To keep up
with the constant changes in the marketplace, luxury brands should not
only observe this model from distance, but also challenge themselves to
take advantage of it.

Stretch in the Chinese market

It is observed that the global luxury market has largely recovered from the
financial crisis thanks to the growth in emerging markets, especially in
China. The luxury consumption in China last year represents 30% of the
total luxury purchases, while the Asia-Pacific region has seen a growth of
16% in luxury sales last year. It is expected that the luxury goods market in
China will see a steady growth of 9.64% during 2014-2019 (Chiquet, 2014).
Not surprisingly, global luxury brands are highly involved in intensified
competition to gain market share in the Chinese market. Chanel is not an
exception. Maureen Chiquet, the CEO of Chanel, reveals that Chanel does
not only pay attention to different national markets, but it strives to
comprehend the clients who are always traveling. She also stressed that as
a luxury brand with a French origin, the company needs to strike a balance
between the globalization of the business and the preserve of its French
sensitivity and echos (Chiquet, 2014). According to the World Luxury Index
China (2013), Chanel has become the number one most sought after
global luxury brand in China, outperforming its competitors Louis Vuitton
and Gucci.
The success of Chanel in China is largely attributed to the company’s
multifaceted strategies that are customized according to the characteristics
of the market, while preserving the western perceptions. In 2011, Chanel
cohosted with the Museum of Contemporary Art Shanghai an exhibition,
which named “Culture Chanel”. This exhibition presented to the Chinese
audience Coco’s artworks, her design, her life philosophy and her art
collection. It achieved great success and made a tour in other two major
cities, Beijing and Guangzhou. To mirror this campaign in the digital world,
Chanel has created a website called “Culture Chanel” that allowed the
audience to get the holistic experience online (Areddy, 2011). To eliminate
the language barriers, the website provides four languages, including
Chinese and Korean. Aside from the website, the Chinese audience can
also experience the exhibition in front of the screen by watching videos that
introduced the show and revealed comments from celebrities who attended
the exhibition. The Chinese ambassador of Chanel, Zhouxun, also
expressed her excitement and enjoyment of the show in one of the videos
(Areddy, 2011). Celebrities’ attendance and the use of Chinese elements in
the digital elements have a great impact on the Chinese consumers and
have increased the brand’s prestige to a certain extent. On the other hand,
Chanel also differentiates itself from other luxury brands by narrating its
brand story to the Chinese consumers. The films “Coco Before Chanel”,
“Coco Chanel and Igor Stravinsky”, “Lagerfeld Confidential” implemented
the brand values and personality into the consumers’ minds (Areddy,
2011). It provides the audience with access to shorter versions of the
content across multiple social media platforms. In terms of social media,
Chanel has 1,42 million followers on Weibo (Weibo, 2015), Chinese version
of Twitter, however, its posts received a limited amount of comments,
shares or likes compared to the number of followers. As for its WeChat
public platform and its mobile application, it adopts the similar approach to
broadcast the campaigns and news but chooses not to be interactive with
the audience.

Chanel’s discreet strategies in digital might be explained by its intention to

conserve the brand’s exclusive and low profile image. According to rarity
principle of luxury consumer psychology (Riley and Lacroix, 2013), luxury
brands should be exclusive to few but desired by all. It is not Chanel’s goal
to gain thousands of fans or followers to ensure the brand’s exposure. As
the creative director of Chanel, Karl Lagerfeld revealed, it was strategic to
not be anywhere, because the brand should stay exclusive. The company
understands that the Chinese luxury consumers are similar to other
developed markets in that they want to be different from the majority. In
accordance with the calculated strategies in China, Chanel stays consistent
with its stance when it comes to online marketing.

However, while Chanel is actively interacting with its Chinese consumers

offline, it is neglecting the opportunities to increase brand influence and to
engage potential customers online. Although the format and content spread
through social media score high on visuals, there is a lack of segmentation
and customization features (Riley and Lacroix, 2013). In addition, without
the opportunities to engage in the brand’s campaigns, the audience do not
have sufficient incentives to visit the official website or to acquire brand
knowledge from other platforms unless they are truly interested in luxury
culture. Consequently, it is difficult to attract the potential customers,
especially the entry-level young consumers, to further learn about the
brand or become part of the community. The Chinese market is developing
but also constantly evolving. It is time for Chanel to delve into the patterns
of the Chinese consumers’ behaviors with the help of social media.
The brand has also chosen the ideal tool, WeChat, Chinese version of
Whatsup and Line, but it has not fully exploited the features of this platform.
The reasons why public platform of WeChat is the ideal tool for luxury
brands to interact with the audience and to manage customer relationship
come as follows. Firstly, this platform, with 438 millions monthly active
users (Statista, 2014), has the largest number of active users in China,
which includes the target audience of the brand. The features of the public
platform are much more sophisticated than Facebook or Twitter. Audience
can choose what content they want to consume instead of receiving all the
messages from the account. In the interactive activities or conservations
between the brand and the audience, the content sent from the user’s side
will be not available to the public, which ensures the users’ privacy. Efforts
can be made to offer the audience exclusive benefits to motivate them to
visit the official website. If adopted properly, social media platforms will not
pose threat to the positioning of the luxury brand, but become their key
element to achieve success.

Conclusion
The analysis of Chanel’s Internet-based marketing efforts has revealed that
Chanel adopts the leading social media platforms as tools only to
broadcast its marketing campaigns. However, given that social media
platforms have great potential as conversational platforms, the brand can
extend its value proposition online by adding interactive elements to their
existing communication tools. While being a leader in content marketing
online and offline, Chanel should place more emphasis on engaging its
customers through social media platforms and establishing more solid
relationship with its customers.
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