LVMH’s Bespoke Approach to Digital Transformation
How LVMH is leveraging digital technology to elevate the customer experience while also maximizing business resiliencyAdd bookmark
The relationship between luxury brands and disruptive, digital technology is incredibly complex. While digital technology has certainly democratized the luxury experience, it’s also pushed the industry to develop cutting-edge, omnichannel customer experiences as well as embrace a new set of consumer values grounded in inclusivity, sustainability and ethical business practices.
In a time defined by cutthroat competition, increased economic uncertainty and rapidly fluctuating consumer tastes, multinational conglomerate LVMH Moët Hennessy Louis Vuitton has distinguished itself as a digital bellwether..
With over 75 different brands spanning fashion, spirits and hospitality, within its portfolio, the path towards digital transformation hasn’t always been a smooth ride. As each of these “maison’s” not only targets its own unique consumer group but also has their own established, deep-rooted culture, pushing one, single approach or vision for digital transformation was not ideal for this organization. In addition, e-commerce is very expensive and a surprisingly few number of companies are successful at delivering profits in this arena.
The challenge for LVMH became how do they balance the practicalities of a modern, global digital business (i.e. operational excellence, superb 24/7 customer service, warehousing optimization, etc.) with the more elevated, bespoke experiences customers expect from a luxury brand.
Digital Transformation Origin Story
By the mid-2010’s many of LVMH’s brands, such as Sephora, were already leveraging digital technology highly effectively and strategically, thus gaining an exceptional competitive advantage. However, all was not equal and others were struggling to stay abreast of rapidly changing digital trends.
In 2015 LVMH appointed its first Chief Digital Officer, Ian Rogers, who had previously helmed digital strategies at Apple Music and Beats Headphones. Under his leadership, LVMH launched 24 Sèvres (a multi-designer e-commerce platform), acquired digital shopping platform Lyst, and expanded its presence on China’s TMall platform.
In addition, it also launched the LVMH Retail Lab in 2018, an internal organization developed to help the group's labels, whether in the fashion, wine-making, cosmetics, watch-making or selective distribution sector, in their digital and retail transformation.
A number of LVMH brands also started to experiment with artificial intelligence (AI) and augmented reality (AR) tools to develop unique, branded customer experiences. For example, Sephora’s smart mirrors enable customers tp try on makeup using AR. In addition, LVMH developed a new tool, dubbed “Aura,” that uses blockchain technology to track goods as they travel through its supply chain in order to protect against theft and ensure authenticity.
Another interesting tool they deployed was OneStock’s agile order management technology. Using this tool, online consumers can see stock availability in real-time and choose a guaranteed delivery method based on the item selected (i.e. ‘white glove’ same day delivery, pick up in-store in under two hours, etc.).
When it comes to day-to-day digital operations, according to a June 2020 article in Vogue Business, “At LVMH, e-commerce maturity varies across brands. It centralises technology, clienteling and analytics, like Salesforce for customer relationship management and Google for tracking. Alcméon, a startup housed in LVMH’s La Maison des Startups, is used for one-to-one communications. This lets the company compare conversion rates, bounce rates and cost of customer acquisition, all key to reaching profitability.”
In an interview with Capgemini, Roger’s explained his unique approach to digital strategy transformation, “Some companies tend to view “digital” as something different, separated from the rest of the organization. And this is the biggest mistake you can make, saying ‘let’s call it digital and put it in the corner’. “
He went on to say, “I predict that in ten years’ time, the Chief Digital Officer title will go away. It is a transitionary role. It is the role of a change agent. You need it right now because you need people who understand the levers of innovation that large organizations have, but which they don’t utilize. But over time, these ‘digital’ titles should be fully eliminated.
The bottom line is that you need a strong technology person who reports to the CEO and whose job is to move at Internet speed and enable the rest of the company. Technology is behind the scenes and touches the consumer everywhere. What this means is that organizations are increasingly interfacing with their customers via software.”
The Omnichannel Digital Experience
Rogers predictions about the phasing out of the “Chief Digital Officer” became reality in the fall of 2020, at least at his organization, when he resigned and LVMH appointed a new “chief omnichannel officer,” Louis Vuitton Vice President, Michael David. However, Rogers is expected to stay on as a strategic advisor.
2020 turned out to be an eventful year for LVMH. As LVMH properties shuttered all around the world shuttered and the demand for luxury mainstaples such as suits and evening dresses disappeared, LVMH certainly suffered financially but ultimately survived and is expected to rebound sooner rather than later.
Going forward, experts expect all LVMH brands to be integrated into one, single technology platform to create a one-stop-shop for customers and centralize many of its own, behind the scenes operations. In addition this move towards omnichannel strongly suggests increased focus on blending together the in-store experience with the digital one similar to what more mainstream consumer brands such as Nike are already actively pursuing.
The key for global corporate enterprise is to benefit from the collective intelligence presented by RPA and cognitive technologies along with human workers. Only by having technology combine with human talent can global corporate enterprise achieve scalable intelligent automation. And only with scalable intelligent automation enterprise resiliency be realized. Join that community for lessons learned at SRIA Live.
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The key for global corporate enterprise is to benefit from the collective intelligence presented by RPA and cognitive technologies along with human workers. Only by having technology combine with human talent can global corporate enterprise achieve scalable intelligent automation. And only with scalable intelligent automation enterprise resiliency be realized.
Join that community for lessons learned at SRIA Live.Register Now
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