TOWARDS A MORE CONNECTED AND ENGAGED LUXURY The crisis is encouraging luxury companies to implement new strategies that are more efficient, more resilient and more customer-centric. But they cannot succeed in accelerating their digital transformation without a perfect command of these issues. TOWARDS A MORE CONNECTED AND ENGAGED LUXURY SALESFORCE, PUBLICIS LUXE & EPSILON
CONTENTS FROM THE EDITOR
04 Chapter 1 • The luxury sector faced 32 Chapter 3 • The fine challenges of with the health crisis luxury houses
06 Nicolas Zunz & Denis Terrien 34 Laure Debos “It has become impossible to separate Customer-centric strategy: pitfalls to meaning and growth” avoid and quick wins to secure At the end of the first lockdown, 2020 seemed like a perilous year for luxury houses. Consumer confidence 11 Luca Solca 37 Déborah Marino “Luxury houses must streamline their In China, the enchantment that money was low, stores were closing their doors, fashion weeks physical networks” can’t buy (anymore) went digital by mandate, with no beautiful clothes in the front rows. Fortunately, the year ended with an 14 Chapter 2 • Reinventing the customer 41 Generation Z, a taste for unadorned encouraging rebound, proving that the major luxury relationship luxury houses have more than one trick up their sleeve.
Nicolas André 16 44 Values are no longer a luxury At Epsilon, Publicis Luxe and Salesforce, we believe Data for a new customer relationship that every crisis is an opportunity to learn and evolve towards new, more efficient and more resilient models. 18 The return of clienteling in luxury Salesforce, the global leader in That’s why we turned to the experts to discover their CRM, enables companies of all sizes and in all industries to drive analysis of the situation. For these experts, major David Nijaki 20 their digital transformation and luxury houses must step up their efforts to redesign Mercedes-Benz: “Unifying data is a gain a 360-degree view of their capital challenge” customers. the customer experience. Data will fuel customer relationships over the long term, applying all the charm Publicis Luxe aims to work with 23 Breitling in the time of customer of customer care across every stage in the customer luxury brands to create innovative advocacy experiences that enrich products, experience. Brick-and-mortar storefronts and online services and storytelling to create shopping sites are converging through an omnichannel a special emotion in every moment 25 Accor Luxe & Premium consolidate data and build unique relationships over logic. for the customer experience time. While the big luxury houses have already embraced Arthur Barbey 26 Epsilon France is the Publicis these new values, many challenges still remain: avoiding Omnichannel: technology to kick-start Group’s data marketing entity the pitfalls associated with omnichannel strategies, the customer relationship with 750 Adtech and Martech employees. Its mission is to help interacting authentically with the powerful Generation brands sustain their growth by Z, understanding the changing expectations of Chinese 30 Brunello Cucinelli, Delvaux, Hotel Group leveraging their data assets and Omnichannel, a necessary luxury quality customer relationships consumers, committing to environmental and social within a world dominated by guarantees... Discover these trends now in the following platforms. pages.
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CHAPTER 1 THE LUXURY SECTOR FACED WITH THE HEALTH CRISIS
ALTHOUGH THE LUXURY SECTOR ENJOYED A
CLEAR REBOUND IN THE FOURTH QUARTER OF
2020, THE HEALTH CRISIS HAS NONETHELESS
SHIFTED THE BALANCE, TURNING STRATEGIC
INTUITIONS INTO CERTAINTIES. FOR THE MAJOR
LUXURY HOUSES, IT HAS BECOME VITAL TO
FOCUS THEIR EFFORTS ON THE CUSTOMER
EXPERIENCE AND AN OMNICHANNEL APPROACH,
WHILE STREAMLINING THEIR STORE NETWORKS.
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Beyond its severe financial On the business side, the drop in “IT HAS BECOME consequences, is the Covid-19 tourism (especially from China) crisis also calling into question has a direct impact on store IMPOSSIBLE TO SEPARATE the standard business model at networks. How does this change MEANING AND GROWTH” luxury houses? the strategies of luxury houses? Nicolas Zunz: This is one of the D. T.: The current crisis has key lessons from the current revealed the value of having crisis: customers are increasingly a centralized IT and global looking for meaning in all their marketing organization. Some purchases. Though it applies houses were better equipped across every sector, this trend than others to absorb the shock is even more pronounced in the of this crisis. They were able to luxury sector, which is expected bounce back quickly and focus to be exemplary. This is even their marketing communications more true for Generation Z, which efforts on regions that were less will account for at least half of affected by the health crisis. We luxury purchases in 20 years. should remember that the luxury For this generation, a brand’s lack industry, especially hospitality, Nicolas Zunz Denis Terrien of ethics or commitments may is used to geopolitical crises Vice President of Publicis Executive Vice President represent a true casus belli. leading to lockdowns across Groupe in France and Southern Europe at entire regions. When tourists no President of Epsilon France Salesforce Denis Terrien: Faced with rising longer travel, we have to know social inequality around the world, how to reach them in their home luxury brands, perceived as being countries! privileged services, must show As e-commerce emerges as an essential growth vigilance and amplify their efforts. driver during the crisis impacting the luxury sector, Covid-19 has urged the luxury luxury houses must focus their efforts on the sector to redefine itself. More than customer experience and omnichannel approach, ever, it must find ways to present without compromising their values. We hear from itself clearly in order to generate Nicolas Zunz, Vice President of Publicis Groupe in interest rather than distrust. France and President of Epsilon France, and Denis Today, it has become impossible Terrien, Executive Vice President Southern Europe at to separate meaning and growth. Salesforce.
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What growth drivers should be experience online as in-store, Are you optimistic about the preferred? meaning an ultra-personalized luxury sector’s ability to succeed experience. In many cases, in its digital transformation? N.Z.: E-commerce is the preferred brands have yet to offer even a growth driver. Today, it represents personalized homepage for their N.Z.: I’m fairly optimistic because more than 10% of revenue at regular customers. consumers are much less hesitant luxury houses*, although it was to use digital than before, even for non-existent 15 years ago. It is a D. T.: We are seeing that luxury big purchases. Ten years ago, no completely exponential market. is no longer an exception to the one would have bet that $1,000 However, I don’t believe that notion that service is just as dresses could be sold online luxury is behind in this area. Recall important as the product. Product without a fitting. Today, live sales the creation of Net-a-porter in the quality must be combined with for luxury goods are booming 2000s, the first Hermès website the best possible customer in China. Moreover, luxury in 2001, Farfetch in 2007, Vestiaire experience, both during and customers are more than willing Collective in 2009... Very few after the sale. It’s not just about to share their data. Studies show sectors have such an e-commerce sales, but also the customer that 45%* feel that using their ecosystem with direct-to- journey: the customer journey is personal information is crucial for consumer, wholesale, rental and an omnichannel adventure, both enhancing their brand experience. now even resale platforms. It was virtual and physical. We have to consumers who were not ready develop a 360-degree view of To keep up with the desires of to shop online for products as a customer’s entire life with a a mobile and evolving clientele complex as luxury goods. This company. It’s truly exciting. and evolving customer base, resistance to e-commerce is it’s essential to own and master disappearing. certain technologies. That’s where Salesforce’s tools and support can In my view, if there is any delay, it make a big difference. would be in the digital customer experience. Luxury houses must find a way to offer the same
*Source: BCG x Tencent Digital Luxury Report
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What advice do you have for brands trying to engage their “LUXURY HOUSES MUST customers? The current challenge for luxury STREAMLINE THEIR D. T.: The burning question of the moment is how to better brands is to match connect with customers in a the experience and PHYSICAL NETWORKS” luxury sector where the balance personalization between physical and virtual sales of pure players is shifting. At Salesforce, we are fully capable of helping luxury and digital native Luca Solca, Managing Director Luxury houses combine the two, within a vertical brands. Goods at Bernstein, analyzes the single system. That’s our business: impact of the Covid-19 crisis on physical enabling companies to better store networks operated by luxury connect with their employees and Nicolas Zunz houses. He also outlines the potential customers. This connection has opportunities and risks of shifting to N.Z.: The current challenge for become more crucial than ever digital. luxury brands is to match the since the start of the health crisis. experience and personalization of pure players and DNVBs (digital Products will no longer sell native vertical brands). These new themselves. Without taking experiences have become the anything away from their intrinsic standard and norm for Millennials With the crisis, the future of luxury is quality, they must be paired who are demanding the same certainly digital, but will the future of with a strong and engaging experience in the luxury sector. luxury houses remain physical? multi-channel experience for This is a huge challenge for luxury the customer. When a customer houses, which have traditionally Luca Solca: Yes. Consumer purchases walks through the doors of a relied on customers coming to have massively shifted online due to store, the salesperson who greets them. Now it’s their turn. This is a the crisis and luxury houses must now them must be able to retrace cultural revolution that has only streamline their physical networks at a their entire relationship with just begun. much faster pace than expected. How? the brand over the past several By focusing on a leaner network that years, whether physical or virtual, is more impactful and more deeply anywhere in the world. rooted in their DNA – like Apple, whose Luca Solca products and points of sale all speak Managing Director Luxury Goods at with one voice. Bernstein
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Luxury houses have long favored What are the opportunities and Lastly, by accelerating digital We are witnessing an extremely vast flagship stores. In my risks involved when brands shift distribution, the Covid-19 crisis rapid evolution. The crisis and opinion, we need to question to digital? has raised a major issue: price scarcity of Chinese consumers that model. We should not discipline. Pricing should be have only accelerated these be asking ourselves if a store L.S.: Customers have simple identical both in stores and trends. It’s like we just looks luxurious enough, but if expectations. They want to online, including on multi-brand experienced five years of it conveys the right values. For have the same experience both platforms like Farfetch. evolution in only six months. example, Fendi recently opened online and offline. For brands, a full studio inside its Rome store. this means accelerating their Regarding the rise of digital, It’s a brilliant idea in terms of omnichannel approach in order are we seeing different customer experience. to recognize the customer at strategies emerge in different each stage of their journey. In geographical regions? What has changed is that it is terms of logistics, however, the no longer possible to do the sector should not try to reinvent L.S.: Until now, China has enjoyed same thing as 15 years ago, what others are already doing a huge lead, as exemplified by when luxury houses built their very well (such as Amazon or the Luxury Pavilion launched networks with identical stores Alibaba, which provide same-day in 2017 by Tmall, the Alibaba from one capital to the next. or next-day delivery). For reasons Group’s marketplace. This For customers, a standardized of scale, these operational upscale site offers a selection store almost always means a aspects are not within the reach of exceptional brands. It’s a bad experience. We need to give of luxury houses. The same goes concept that has proven itself them good reasons to visit stores for payment, where WeChat and is now inspiring several when they travel. This is precisely Pay and AliPay offer integrated American giants. Amazon, what Dior is trying to do by and immediate experiences Facebook and Instagram are reopening its historic address on that have set the model. Luxury following the example of Tencent Avenue Montaigne in 2021, with houses should rely on the major and Alibaba by stepping into spaces dedicated to ready-to- operators and focus on what multi-brand digital luxury wear, lounges for haute couture they do best: experience and distribution. In a way, everyone is and a restaurant that opens onto packaging. aligning themselves with Chinese a garden. standards.
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CHAPTER 2 REINVENTING CUSTOMER RELATIONS
WHAT IF LOYALTY IS A GROWING VALUE? THE
DAYS OF ONE-TIME RELATIONSHIPS BETWEEN
LUXURY BRANDS ARE OVER. ON DIGITAL
CHANNELS AS WELL AS IN STORES, DATA IS
FUELING CUSTOMER RELATIONSHIPS OVER
THE LONG TERM AND AT EVERY STEP OF THE
JOURNEY. DID YOU SAY OMNICHANNEL?
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Given this, where can they start DATA FOR A collecting this precious data? Luxury houses, especially in the Technology and data are not NEW CUSTOMER jewelry and watchmaking sectors, do not always have physical enough. It’s above all a race RELATIONSHIP points of contact with their for insight, for understanding customers. And when they do, customer expectations and they are not always designed to demands. “A glaring lack of customer data.” For Nicolas André, Director encourage customers to return or of Strategic Planning at Epsilon France, the situation is clear. As to collect their data. luxury brands set out to conquer online customers, it is imperative that they fill their tanks with data, the true fuel of a personalized “However, luxury houses no This is good news for luxury customer relationship. longer have a choice: they must houses in their battle against become data champions,” says digital giants. “Amazon, which has André. This is a major challenge its sights set on the luxury sector, A customer database is an asset as for a sector that is traditionally does not generate any emotion essential as it is difficult to build. In this not very tech-savvy and is and is ranked by Generation area, luxury houses are often starting unfamiliar with data marketing, Z as one of the most boring from scratch. They need to move on where many players, despite their companies. Luxury, with its DNA from the one-shot aspect of one-time financial power, are starting from woven with passion and values, relationships they have long had with scratch. tourist clientele, particularly from China, has a bright future ahead.” who often walk out the door with a MORE THAN A RACE FOR beautiful piece, never to come back. TECHNOLOGY, A RACE FOR INSIGHT Nicolas André With the onset of Covid-19, luxury houses Director of Strategic soon found themselves cut off from this More than just a shift to Planning at Epsilon France foreign clientele, which accounted for e-commerce, the priority is up to 70% of their sales. “The European to move from an ephemeral luxury houses must today capitalize customer relationship to one on their domestic markets by turning that is deep and lasting. “To towards a local clientele,” explains do this, technology and data Nicolas André, “thereby reducing their are not enough,” says André. dependence on foreign buyers.” “It’s above all a race for insight, for understanding customer expectations and demands.”
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Clienteling in the data age is first and foremost a tool allowing companies to connect with Classic phone calls had fallen customers with perfectly updated files, in order to address them in out of fashion in favor of THE RETURN OF a personalized way, in all stores, hip events and engagement even if their dedicated consultant strategies. It is now valued as CLIENTELING IN is absent. At the point of sale, the preferred vehicle for one- this involves sharing customer LUXURY data, with their consent, in on-one contact, especially order to feed the CRM with total for VIP customers in the confidence. To make future visits luxury world. What’s better than knowing a customer? At a time when customer even more personalized, it is also Recognizing a customer. As the industry goes relations need a total overhaul, possible to also add wish lists, through its digital transformation, luxury clienteling is experiencing a measurements, etc. houses are revisiting the recipe that has long resurgence of interest among Emanuela Prandelli underpinned their success: the fine art of luxury brands. Clienteling is the Using a fully detailed database, it Associate Professor at SDA Bocconi School of clienteling. fine art of long-term customer becomes possible to orchestrate Management, quoted by Fashion Network relationships, nurtured by a marketing campaigns that detailed knowledge of their proactively address the 20% preferences and purchasing of customers with the highest behavior. This is a relationship of spending power by offering trust and reciprocity, in which the new services. For example, a consumer and the brand know custom shoe designer can ensure and recognize each other. In customer satisfaction by sending short, luxury brands must be able a personalized email a few weeks to offer the customer a friendly, after the purchase. Even by email, intimate relationship. In short, the designer can provide valuable a hyper-premium relationship. maintenance tips, or even suggest Mass-market brands have already a new appointment in store for a understood that this is the best personalized polish or repair, all way to respond to Millennials thanks to Salesforce Marketing desire for personalization. This Cloud. means luxury brands must raise the bar even higher.
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What paths do your customers For non-financed customers, MERCEDES-BENZ: take when purchasing a new data is crucial for analyzing vehicle? purchasing paths. It allows us “UNIFYING DATA IS A to detect purchase intentions Ninety percent of them start their and encourage renewals, thanks CAPITAL CHALLENGE” journey on the digital platform to a history of interactions with before visiting a dealership. the brand and analysis of online Accelerated by the health behavior. We use this data to crisis, digitization has become increase the intensity of our an essential complement to a communications to relevant physical network, which remains customers. of vital importance. Moreover, manufacturers with online For these reasons, we invest in sales tools have weathered the digital and CRM in order to send crisis much better. Nowadays, each customer personalized customers get information online, commercial offers, test drive make a short list of two or three suggestions and more. Once brands, only to visit one or two in identified, leads are shared with the end. Across all manufacturers, our network of dealers, who are 60% of customers make up responsible for conversion. It’s a genuine race against the clock. their minds within a month. The To convince their customers to remain challenge for Mercedes-Benz is How do your prospects begin loyal, premium car manufacturers to make it onto this list in a very their purchasing journey? have an extremely short window of short timeframe. opportunity when customers are The main channel our prospects changing vehicles: a few weeks at most. How do you use data to detect use is our official website, But thanks to data, they can make purchase intentions and interact www.mercedes-benz.fr. This is sure they have the best position at the with your targets? where they can find complete starting line. This is a key issue, even information about our line. Social as loyalty rates vary between 50% and At Mercedes-Benz, a large share media also has an influence, 65% according to studies. David Nijaki, of our customers have signed although it is only perceived as a Marketing and Communication Manager a financing contract, so we priority source of information by at Mercedes-Benz, explains. can anticipate this window of 20% of our customers. However, David Nijaki opportunity. We know when we Facebook users have become Marketing and Communication Manager at need to act to convince them to older and its audience is more Mercedes-Benz France buy with us again. in line with our targets. This platform has therefore become
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a source of traffic in its own right This real-time analysis is also with interesting conversion rates. important for orchestrating BREITLING IN THE TIME OF On Instagram, our communication communication actions between goals have more to do with brand the various sales and after-sales CUSTOMER ADVOCACY presence and engagement than activities and our network. Let’s the bottom of the funnel. take the example of a customer who may wish to receive offers Do you feel that the issue today for the maintenance of their In the luxury sector, where word of In a scientific way, Breitling’s marketing is no longer data collection, but vehicle while negotiating with a mouth plays a decisive role, the famous and data teams have analyzed the real-time data analysis? distributor for a renewal... This is Swiss watchmaker is shaking up its customer data collected in the boutique a faux pas to avoid, especially in a customer advocacy strategy. Here are network over the past 10 years, as well pivotal moment. We focus a lot on analysis, but some very conclusive first results on its as the data generated by its internet data collection remains important. e-commerce sales. marketing campaigns. On this basis, This unification of data The GDPR law has shaken up our Breitling is able to personalize its practices, particularly in terms throughout the customer journey In a recent interview, Breitling CEO communications and analyze weak of how long data is retained. A is highly complex, but essential. A Georges Kern pointed out that 70% of signals that predict purchase intentions customer updates their vehicle key challenge. purchases are influenced by information based on customer history. The result? every three-to-six years. To retain circulating on the web. To reach its Increased efficiency of marketing efforts their data, we need to continue targets, the watchmaker has chosen to aimed at improving up-sell and cross-sell. to interact with them. The legal rely on the ability of its customers to environment, especially regarding become ambassadors, in other words Since implementing this strategy in 2017, cookies, may also penalize us for % customer advocates, a trend that is Breitling has recorded a sharp rise in collecting and analyzing data to becoming increasingly important in the e-commerce sales, which represent 15% reach the right people at the right 90 strategies of luxury houses. For these of its total sales (by adding those of its time. OF CUSTOMERS START houses, it has become an invaluable e-commerce site and those of it of its central asset, together with brand resellers). And it’s only just begun: “We THEIR BUYING PATH ON prestige and the notoriety of its creative now intend to triple our online sales,” DIGITAL director. says Antonio Carriero, Chief Digital & Technology Officer at Breitling.
22 23 SALESFORCE, PUBLICIS LUXE & EPSILON A FLAWLESS CUSTOMER JOURNEY
ACCOR LUXE & PREMIUM CONSOLIDATE DATA 01 07 FOR THE CUSTOMER
Infatuation. The customer discovers the Assessment. The customer is active on brand via a social network and makes a first social media and mentions the brand, their EXPERIENCE purchase. feedback is identified and enriches their profile.
02 Within the Accor galaxy, the Luxury & “Time spent updating and delivering Premium brands represent a portfolio reports went from 10 days to just two Invitation. The brand of nine world-class brands and over hours,” notes Nicolas Leseurre, Director personally invites the customer 600 hotels. To leverage its data- and of Planning and Analytics. “We also used to a fashion show. A personal 06 offer-optimized experiences, the Tableau Bridge (which connects Tableau shopper makes sure the upscale hotel giant has chosen to Online to firewall-protected data sources) customer attends. Regular updates from order to delivery. deploy Tableau. to create a single reporting process for The customer is regularly updated at each stage in product delivery. Each update all hotels, further amplifying its impact includes personalized content (new looks, “For our Luxury & Premium brands, across the company.” an inside look at the brand’s studios). we had already succeeded in unifying data as diverse as finance, quality, Accor Luxury & Premium end users now distribution and social media with have quick and easy access to a wide Tableau Online,” recalls Geoffray range of diversified key performance 03 Maugin, SVP Global Guest Experience indicators in Tableau Online, giving them 05 & Business Performance. “Soon, we will a 360 degree vision of every aspect in a single space, as opposed to using several Personalized support. add data sources from other business A digital platform An immersive experience. allows the customer to attend the fashion areas such as sustainability, loyalty or platforms like before. The customer meets their show with their personal shopper, who personal shopper in the food and beverage sourcing. These provides advice and prepares a shopping list. brand’s private showroom. consolidated insights on the country, “We’ve also used Tableau Online’s Using augmented reality, regional and global levels will help us extensive functionality to reorganize the the customer can visualize drive better performance at all levels, way we build and present our reports. products that are still being 04 which is significant.” Centralizing data With this visualization, we can count on made. through Tableau Online has quickly led to tables that will speak to everyone.” Order confirmed! The customer can find their spectacular improvements. selection on the brand’s application. They can choose which pieces they like, indicate a delivery address and confirm their order.
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TECHNOLOGY As market trends and consumer habits TO KICKSTART show, the ultra-personalized experience THE CUSTOMER across all channels is a priority for houses. RELATIONSHIP
Throughout their buying journey, At the point of sale, a digital consumers have become clienteling application is accustomed to switching from one Impeccable, fast, pertinent and a practical way to build channel to another, depending on efficient customer service has a personalized customer what they find most convenient. become much more than a mere relationship with immediate Adding to this is an aspect that advantage for companies. It has access to customer files and is specific to luxury customers: become a requirement and a inventory. As a result, sales their ability to jet from one capital criterion of choice for consumers, staff can get answers to all to another (when world health in the same way as product or their questions and collect new allows it). This leaves only one service quality. information that can be used Arthur Barbey answer: commit to an omnichannel for future visits as well as for Distinguished Solution strategy. DATA, THE FUEL OF A customer service. Sales staff Engineer Salesforce PERSONALIZED RELATIONSHIP can even use this tool to keep in It is widely known that luxury touch by sending emails or texts customers demand highly to customers, according to their To meet this challenge, companies personalized service, immediate preferences. And in the event collect a lot of information about attention to their requests and an of turnover or absence within their customers throughout equally fast response. What was the teams, there is no risk that their interactions, thanks to their already true in stores is now true a customer will be left on their personal shoppers working in online. And this expanded scope of own, since all their information is store and remotely. Customer action makes the task at hand for centralized in the CRM and easily activity on social media and luxury houses considerably more accessible to everyone. e-commerce sites also provide difficult. Their customers will not valuable indicators for gauging wait, they do not expect to speak All this data also plays a decisive their tastes, expectations and to several representatives, and they role in customer acquisition satisfaction. certainly don’t want to repeat their and activation, as well as requests at each step. personalized customer journeys
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and retargeting strategies. On the from the nearest store, to reduce campaign or in during customer digital side, artificial intelligence wait times and shipping costs. service, the experience must be can also support teams. In this way, thanks to the OMS, the same for the consumer. + 11 the company can respond to the POINTS By offering style most frequent requests of its Using a digital platform like recommendations adapted to customers: to pick up an item in Salesforce makes it possible to the customer profile, marketing the nearest store, to know if an tailor marketing campaigns to a The share of online luxury campaigns, purchase journey and item is available in a certain color customer’s profile and journey. goods purchases increased and size, and if it is possible to intentions, AI can increase the Customer service can converse from 12% in 2019 to 23% in customer’s shopping cart through have it delivered within a day. directly with the consumer on 2020, reaching 49 billion cross-selling logic. messaging channels such as A SEAMLESS OMNICHANNEL Messenger or WhatsApp. It also euros (Bain & Company, UNIFIED INVENTORY, SATISFIED EXPERIENCE contributes to drive-to-store Luxury Study 2020). CUSTOMERS advertising, thus facilitating the As market trends and consumer selling ceremony. It can also function as a source of profit By using an order management habits show, this ultra- 2025 by taking the order directly system (OMS), companies can personalized experience across on the same channel through easily handle exceptionally every channel is a priority for native integration of Salesforce By this date, online sales complex processes in a way luxury houses, whether it is e-commerce, customer service that speeds up purchasing. It on digital channels like the will have become the main and OMS systems with the provides a quick and easy way to e-commerce site, in store with purchasing channel for payment ecosystem. answer all the questions on their sales staff, following a marketing luxury products, according customers’ lips: “Is the product I to Bain & Company. want in stock?”; “Is the product I want available for pickup in store today?”; “How can I benefit from concierge service?” As market trends and consumer A crucial link in any omnichannel habits show, the approach, the OMS system ultra-personalized organizes distribution so that the product reaches the customer as experience across all quickly as possible. It streamlines channels is a priority shipments by analyzing store and for houses. warehouse inventories. In this way, the OMS system facilitates ship-from-store processes to deliver to customers directly
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To achieve its digital ambitions, “Our ambition is to have a comprehensive OMNICHANNEL, Delvaux has deployed Sales Cloud view of our customers and all their and Marketing Cloud, as well as an interactions with the Chinachem A NECESSARY LUXURY integrated personalized application, group, whether they stay in a hotel, Diamond, dedicated to its store staff. visit a shopping mall or support a Like many companies, the Covid-19 charity organization,” explains Sylvia pandemic accelerated Delvaux’s move Chung, Deputy CEO of the Hotel to digital, and the data centralized in Group. “Salesforce helps us gain new Whether they operate in the leather, It’s not easy to roll out the authenticity Salesforce provided it with real-time insights from this data to improve the fashion or hotel sectors, the leading of a company that is closely tied to its information to help adapt its strategy. As effectiveness of our campaigns and players in luxury goods are investing home territory, Umbria, on a global scale. a result, despite closing its stores during enhance the customer experience.” in omnichannel strategies to offer the With Salesforce, Brunello Cucinelli has lockdown, staff were able to continue online experience their customers achieved this feat with a digital storefront maintaining customer relationships and Service Cloud provides a comprehensive demand. Here are some inspiring available in 50 countries. Thanks to sell remotely through the Diamond app. view of each customer. Hotel Group can examples. Marketing Cloud, every communication use this information to design, develop, has a personal dimension, and recipients Digital marketing is an important part of personalize and measure all future Brunello Cucinelli • Digital with more often respond to e-mails by addressing Delvaux’s strategy. marketing campaigns through Marketing soul Brunello directly. The result: since “With richer information, we can bring Cloud. “In the past, we would send very migrating the company’s e-commerce to more value-added content to our standard emails to promote rooms Commerce Cloud in 2016, the company “If you don’t accept the changes of your customers, for example by sending them and rates. Now, the marketing is much has quadrupled its online revenue. time, you will probably miss out on most details on products that match their past more personalized and dynamic, while of them.” purchases or browsing history,” says Paul saving our teams a lot of time,” says Jack Delvaux • An online experience as Flacassier, Head of CRM. Tam, Director of Innovation and Digital perfect as in-store For the Italian stylist and entrepreneur Transformation at Hotel Group. Brunello Cucinelli, new technologies must Hotel Group • Dynamic and Founded in Belgium in 1829, Delvaux is be used but “in a graceful way, without personalized marketing stealing our souls”. With Salesforce, the the oldest luxury leather goods company in the world and now has 42 stores in iconic Italian luxury company has found a Hotel Group consists of seven hotel Europe, Asia and the United States. way to marry craftsmanship and service properties and serviced apartments Upon taking the helm of the company in with technology that helps employees in Hong Kong – or more than 2,800 2019, CEO Marco Probst implemented a elevate the luxury experience. rooms. To provide a truly personalized strategy to digitize the company in order experience, the subsidiary of the to meet customers’ growing expectations “Digital is by nature a little cold, a little Chinachem real estate group needed a for omnichannel engagement. “We impersonal,” says Francesca Picchiò, solution to centralize its data. wanted to gain complete visibility into Digital & CRM Program Manager. “Thanks the customer journey and recreate our to Salesforce, we’ve been able to build unique and refined boutique experience customer journeys that are as close as across all digital channels,” says Nelson possible to our customers’ expectations Bastos, Delvaux’s CIO. and desires.”
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CHAPTER 3 THE FINE CHALLENGES OF LUXURY HOUSES
THE ROAD IS STRAIGHT BUT THE INCLINE IS
STEEP. EMBARKING ON AN OMNICHANNEL
STRATEGY, TACTFULLY ADDRESSING THE
POWERFUL GENERATION Z, UNDERSTANDING
THE CHANGING EXPECTATIONS OF CHINESE
CONSUMERS, PLEDGING A COMMITMENT TO THE
ENVIRONMENT AND SOCIETY... LUXURY BRANDS
FACE MANY DIFFERENT CHALLENGES.
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CUSTOMER-CENTRIC STRATEGY: PITFALLS TO
AVOID AND QUICK WINS moment they connect online. This means having information on their TO SECURE measurements, favorite cuts and The houses that are colors, latest purchases, products doing well are the ones they’ve liked on Instagram and that have invested in others that leave them cold, all at their CRM their fingertips.
“Luxury house customers are, by There are many pitfalls to avoid With the Covid-19 crisis and the rise nature, hyper demanding, hyper when starting from scratch. of Generation Z, luxury brands are no mobile, highly informed and multi- Setting up a CRM impacts the longer just an object of desire. They channel. We need to document all fundamental organization of now have to take the perilous step of their interactions and purchases the company, notably mixing making the first move. To make sure the to develop a hyper-personalized business, technological and odds are in their favor, they can rely on relationship and avoid, for legal. “Today, the houses that data. Here is our guide. example, offering a product that are doing well are the ones that has already been purchased,” already invested in CRM five to says Laure Debos, Executive Vice 10 years ago and have had the President of Epsilon France. time to improve, rethink their Laure Debos distribution network and train Executive Vice President of While widespread use of CRM is already Epsilon France a matter of fact for many players in the “Today, it is difficult for companies their employees. In essence, retail industry, the same is not always to set this all up on their own. digital transformation is a cross- true for luxury houses. But the current They will only succeed if they functional, global project that health crisis is about to change all that. rely on partners, even if it means requires the support of top With online sales soaring, luxury players bringing this expertise back in- management.” are rethinking clienteling and long-term house at a later stage, perhaps relationships. To do so, they must be after two or three years of The idea of putting the customer able to recognize their customers at operation.” at the center was not always the every interaction, from the moment they norm in the luxury sector. Since walk through the door of a store, to the the 19th century, it has cultivated distance and secrecy, an elitist
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approach. Today, the digital How can they interact effectively revolution, Generation Z and the with customers on social media? IN CHINA, Covid-19 crisis are reversing the How can they scale up through an poles: “They impose a logic of omnichannel strategy? THE ENCHANTMENT proximity rather than distance, of transparency rather than opacity, To do all this, companies must THAT MONEY CAN’T BUY of interactivity rather than one- break down organizational silos. way relationships. It’s a disruption. Sharing information between (ANYMORE) We are moving from a brand- businesses requires a single centric logic to a customer-centric customer database, a customer logic, even if luxury may never go management platform that as far as retail.” guarantees access to data for all employees from a single entry QUICK WINS point, a single platform. A single After the bling years, young Chinese source of truth. consumers are adopting a more informed How many years will it take relationship with luxury houses. Does this to get there? It depends on mean that the balance of power has shifted? the size of the house and its An interview with Déborah Marino, Director of organization. Under one year is Strategic Planning at Publicis Luxe. unrealistic. But between 12 and 36 months, anything is possible. How do young Chinese consumers define After the evaluation (two to four luxury? months), a phase of vision based on different methodologies The Covid-19 crisis Déborah Marino such as design thinking. It is Director of Strategic For a growing proportion of young, educated then necessary to embark on imposes a logic of Planning at Publicis Luxe and affluent Chinese “influencers”, luxury is no the bold task of explaining this proximity rather than longer just something that can be bought. Far vision by mobilizing executive distance, of transparency from being an exception, in a country where material success remains a major objective, this management. A road map will rather than opacity, of allow companies to achieve new “golden generation” roots its unique nature various quick wins. How can interactivity rather than in its rejection of a strictly materialistic vision of they quickly optimize e-mailing one-way relationships. luxury, which it considers inconsistent with its campaigns? How can they It’s a disruption. values, passions and aspirations. In the eyes of improve customer recognition? these new consumers, social and cultural capital is as important as economic and financial capital. That allows them to give meaning to their purchases.
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Simply put, they don’t just want to feel rich. For them, the true mark of success is to get what ONLY 20% money can’t buy. For example, exclusive access to an auction, OF GENERATION Z IN THE US SAY THEY ARE FANS to a network, or to specific OF LUXURY ACCORDING TO THE #ZGENERATION knowledge and skills... This is STUDY CONDUCTED BY IFOP AND DARKPLANNEUR the idea that “money can’t buy (2018). everything” – that true riches are knowledge, culture and privilege, not just the fact of being able to acquire an object. They want This new vision of luxury is story and the more sophisticated purchasing knowledge instead of accompanied by another the journey, the richer things just purchasing power. phenomenon: the rise and become for the brand. It may justification of a new line of seem counterintuitive to Western upscale Chinese and Asian brands eyes, but the customer journey in Where do these developments and products. Korean luxury China is like an adventure, where stem from? brands – in fashion, beauty and the notions of discovery and even culture – are very successful learning are key. In China, we are currently in China. We can even talk about witnessing a true cultural Chinese pride. China no longer In the luxury sector in China, reversal among the most socially has an inferiority complex. It is no companies should not sell influential classes and, in terms longer the world’s factory and the but tell. Each journey must be of consumption, the rise of Chinese no longer feel the need to personalized, structured and discretion or understatement. go abroad to buy luxury products. enriched to the extreme. For For them, the signs of success no Their history, know-how and example, a purchase process longer lie in the mere possession values are also fabulous sources may last several years. Behind of money. The anti-corruption of value for a more nationalistic each object is a long history and campaign launched by Xi Jinping consumer. legacy. But be careful: while the in 2012 has left its mark on ecosystems must be complex, the Chinese society and its elites. You explain that in China, “it is transaction must remain simple The limitless and ostentatious no longer necessary to sell but and easy. In short, companies staging of luxury brands is no to tell”. What does this mean? must market products with a longer successful. The purchase beautiful story, like a Gallimard as an end in itself is no longer book, combined with a simple appreciated by this new, more This generation is very transaction like on Amazon. educated generation, which feels comfortable with the complex it knows why it chooses a certain ecosystems typical of the media brand, product or experience. journey in China and Asia in general. The more layered the
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Listening to you, China is quite a ourselves if the new Chinese challenge for luxury houses … way of telling the story of luxury GENERATION Z, products will be the future of the Yes, China is a real laboratory sector’s communication in the A TASTE FOR for them. It’s necessary to West. observe behavioral changes UNADORNED LUXURY closely because it is impossible to anticipate the creation of new formats. In this market, there is a need for an avant-garde approach Breaking with Millennials’ affinity groups, as Eric Briones that demands incredible effort fascination for all that glitters, and Nicolas André described and imagination from brands. Generation Z is forcing luxury perfectly in their recent book, houses not only to rethink Le Choc Z (Dunod, 2020). The To conclude, I think it is absolutely their values, but also their Zs unite around the values of necessary to establish an pricing policies. A necessary inclusiveness, gender neutrality, observatory on the cultural reconsideration for the future. entrepreneurship... If Millennials distribution of certain practices. betrayed (especially on social What luxury houses must do in They are called Generation Z. media) an unbridled adoration China to attract these new types They were born between 1995 for anything remotely resembling of consumers will generate a and 2010 and will account luxury, Generation Z is distancing unique skillset. We can then ask for one-third of the world’s itself from the term. Less population in 2020. Taken impressionable, often less spendy, on their own, Zs spend the they don’t hesitate to question equivalent of 3 trillion euros luxury brands by putting their globally each year and, in France, finger where it hurts: values, a little over 60 billion euros, meaning, price... according to a study published in 2019 by OC & C Strategy “The previous generations Consultants. Its relationship to bought luxury products as if they luxury? Reasonable. Forget the were entering a sacred temple,” selfie generation of Millennials. explains Nicolas André, Director Generation Z is camped out of Strategic Planning at Epsilon in the world of the future, one France. “For Generation Z, it’s that is more collective, as they the opposite. It’s up to luxury navigate seamlessly between to adapt to them.” The good
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news is that the great struggle of Secondly, through more WAITING FOR GENERATION this generation is inclusiveness: sophisticated tools, such as ALPHA they want a more fluid society, blockchain, which ensure product GENERATION Z NO LONGER with more freedom, parity and traceability and facilitate the Another major trend: HAS A RELATIONSHIP OF equality. resale of luxury products between entrepreneurship, which is a FASCINATION WITH LUXURY. individuals. Also according to leading value for Generation Z. IT PREFERS PRIVATE SALES The luxury sector is one of the Ifop: 47% of French Zs bought This generation is conscious of AND SECOND-HAND ITEMS. best placed to provide this luxury goods at private sales, and the role companies must play fluidity. “For Generation Z, brands 36% bought second-hand luxury to defend causes. This desire can be game-changers and are goods. for collaboration pushes luxury better able to bring about change houses to play the (vital) game than political movements,” says “Luxury houses cannot ignore of inclusivity, like L’Oréal with André. this trend without running the Nuxe and Biotherm, or LVMH risk of encouraging counterfeits. with Fenty, alongside the star THE PRICE OF LUXURY With total cynicism, Generation Rihanna… In doing so, luxury Z will not hesitate to resort to houses, which have the required counterfeits if they feel a product cash flow and financial strength, Generation Z is the first to say is too expensive.” are getting a facelift and they no longer want to pay the accelerating their transformation. price of luxury: 57% say it is And what if Generation Z gives too high, according to a study This generation no longer has a them wings? conducted by Ifop for the Grand relationship of fascination with Prix Stratégies du Luxe 2019. And luxury. In the United States, for to question the pricing power example, only 20% of young of luxury is to attack one of its people from Generation Z sacred pillars. The weapons say they are fans of luxury, used to do this are now well according to the #ZGeneration known: the use of second-hand study conducted by Ifop and goods and the circular economy. Darkplanneur. In other words, you First, through community sales can still lead a successful life even platforms (Vinted, Videdressing, if you’re wearing a counterfeit Vestiaire Collective, etc.). Rolex at age 50.
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During the crisis, Chanel, VALUES Hermès, LVMH and Kering took remarkable action. Among ARE NO their many initiatives, we can mention the maintenance of LONGER their employees’ salaries, the production of masks and hand A LUXURY sanitizer, as well as donations to hospitals.
Salesforce shares the same vision of its responsibility as a company. “Leaders can no longer What do venerable luxury afford to separate their business houses share with a digital goals from the societal issues transformation pioneer like that surround them,” writes Salesforce? A lot. Including, Salesforce CEO Marc Benioff in certainly, a shared responsibility the introduction to Trailblazer, his to their employees, customers, latest book published in France ecosystem and the society in 2020. around them. “Their mission can no longer be a binary choice: grow or give, turn a profit or promote the common good, innovate or make our world more livable.” Marc Benioff is convinced that we are on the threshold of a revolution in trust. “Intellectually, we all know that the moment you put growth before trust, a problem will eventually arise. It can happen to the best of leaders, to the most respected of companies.”
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