A great example of a luxury brand building and developing its own community is Burberry. Burberry will launch its own social networking site, ArtOfTheTrench, next month. Currently, Burberry boasts more than 660,000 fans on Facebook, and many marketers are questioning why Burberry wants to create its own network when it already has such a large Facebook presence.

Burberry, in launching ArtOfTheTrench, wants to create an experience outside the environment of mass market social communities. Burberry is not neglecting or doing away with its Facebook community, but it is simply giving users another outlet. The brand will undoubtedly use its Facebook and other social presences to drive traffic to ArtOfTheTrench. Launching its own community refines the audience from the larger social networks.

Burberry is filtering users – giving a smaller segment of users a more personalized experience with the brand and isolating customers who are more likely to become long-term customers. By raising the barrier, Burberry is increasing engagement with those individuals who ”…might not even be customers yet. Or they may be a customer for a bottle of fragrance or for eyewear. These are the customers who need the brand experience, who need to feel the brand. That word-of-mouth spreads through their social networks and continues to be a positive conversation…that is so powerful,” as CEO Angela Ahrendts told the Financial Times.

And while many older, affluent and wealthy individuals are engaging in social media, there are still some who will not connect with the brand through Facebook or Twitter. A more exclusive site like ArtOfTheTrench gives Burberry the opportunity to capture those individuals who shy away from Facebook or Twitter, and these individuals can learn about the site through in-store events or through the personal relationships they have with their Burberry sales associates.

In researching reactions to Burberry launching their own social network, I found an insightful post via Tenaya Group that asked great questions on community and online strategy. Here are some of the questions Tenaya Group posed, along with answers and ideas I have:

“If Art of the Trench focuses on pictures of customers in Burberry coats, one might then ask, “What’s the sustaining attraction?”

I see some real brilliance in Burberry’s strategy, and I think they are sustaining attraction in several ways. I also think Burberry can fine-tune its strategy to sustain attention for even longer.

Yes, it is difficult for users to cut through clutter and find what he or she needs to amplify their life on a daily basis, but Burberry’s highly-focused network may be a something that consumers are willing to adopt. For instance, Burberry’s creative director, Christopher Bailey, hired The Sartorialist‘s Scott Schuman to launch the site with photos of people in trenchcoats spotted on major city streets. According to the Financial Times, “One analyst said the move fitted with Burberry’s efforts to win over younger people, who may prove more resilient in terms of luxury spending.”

This association is a strategic alliance for Burberry; whether someone is an independent blogger, fashion iconoclast or a traditional industry professional, he or she knows who Scott Schuman is. The Satoralist site crosses multiple verticals and industries, including technology. Undoubtedly, Burberry will leverage Schuman’s multiple audiences to generate broader awareness of the niche website.

The Satorialist focuses on high fashion photographs, with photos showcasing how consumers wear high-end fashion lines. Everyone who engages in social media wants to be known in one way or another, and pictures tell stories; they allow everyday people to share lives with others. Moreover, social media allows consumers to show the brands they purchase and how they incorporate the brand’s products into their lives.

Sites such as Chictopia, Style Hive, Lookbook.Nu, Modepass, Weardrobe and even Closet Couture have large communities, and users engage daily with creating outfits, rating outfits and sharing their personal styles. Burberry would do well to target some of these sites audiences to drive traffic and participation in its network.

“How deep is the customer ‘brand experience’ in seeing photos of others in Burberry outfits? Might this undercut the Burberry identity so ably set forth in exquisite photos and videos of Burberry-adorned models?” – Tenaya Group

Burberry is experimenting with user-generated content. That’s a huge step socially. Photo quality isn’t something I’d worry about with user-generated content. Most users on sites such as Weardrobe, Lookbook.Nu and Modepass offer some stunning, though amateur, photographs. The content that users generate for Burberry’s network would fall in line with Burberry’s style. Users of photo-sharing sites attempt to create a certain aesthetic and put time and effort into the outfits they create. I’m sure if a user does a phenomenal job, Burberry will recognize a potential brand evangelist in the making and incorporate them accordingly into their online marketing efforts.

One concern for Burberry is that members of its new network may be bargain hunters that flock to Burberry’s factory outlets. This outlet mentality can turn the brand conversation into a downward spiral of discount and price, where the hot topic is, “What’s the best deal?”   The network can then become a force for commoditizing the brand. As soon as someone saves big bucks on a particular item, the entire network will know it, and may shop on price accordingly. – Teyana Group

This is a valid issue to bring up. Could Burberry outlet stores lead to online brand dilution? Again, this can be avoided if handled properly.

Brands such as Gucci and Burberry make a large percentage of their revenues in accessories and leather goods that cost under $300 USD. It’s the same with sales outlets. Coach’s outlets are what have kept it afloat in current economic times. Customers who shop through the main Burberry website and through retails stores and who also shop at Burberry outlets stores know the differences between retail stores and outlet stores. Often times, outlet lines carry discontinued items and/or are specifically designed to meet lower price points. As a consumer, and as a fierce female shopper, I can tell the difference between Coach and Coach Outlet.

If Burberry focuses on its goals and on building attention around the products it wants online audiences to engage with and eventually purchase, it can be successful. I believe that the goal of ArtOfTheTrench is to create a highly-refined experience that focuses on a single item.

Luxury brands are about passion, aspiration and desire. They are also about creating experiences. Luxury brands are taking those ideals online and creating spaces for small concepts to live and flourish. As the web becomes more and more cluttered, I see the need for luxury brands to use online marketing strategies that can cut through the jumble. I think luxury brands can do this by focusing on a single product or small collection (line refinement has been one of the industry hot topics). In the years ahead, luxury brands may very well lead the industry in terms of innovative online marketing.

In this strategy the brand becomes a force for joint cultural innovation with customers. Burberry leads this (shared) brand journey as a creative, social, moral and cultural driver in defining new horizons for its customers. In this role Burberry is “out of the closet” and into the veins. Burberry becomes “innerware” instead of “outerware.” – Teyana Group

Articles Referenced:

• Burberry To Launch It’s Own Social Site – Teyana Group
• Social Climbing: Luxury Fashion Brands Must Embrace Social Media – Dana Gers, Forbes.com
• Burberry Looks To Wine Friends Over Online – FT.com
• Nine Ways For Luxury Brands To Use Social Media – Rohit Bhargava