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Embracing Digital, Luxury Ceos Take on the Role of Chief Collaboration Officer

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Embracing Digital, Luxury Ceos Take on the Role of Chief Collaboration Officer Retail, Apparel & Luxury Goods Embracing Digital, Luxury CEOs Take on the Role of Chief Collaboration Officer When Patrice Louvet started as president Now more than ever, success for luxury and CEO of Ralph Lauren, the iconic luxury retailers requires a clear and distinctive brand brand’s factories in Italy were still using that is reflected consistently across channels traditional hand-drawn patterns. This and customer experiences. Technology and a was a romantic practice, but one that was digital mindset enable companies to provide impractical and hard to scale. Louvet led the a holistic experience for consumers, one charge for digital transformation at Ralph where brick and mortar is no longer separate Lauren, underscoring his from e-commerce, and vision with his first hire: a where brand strategies are Vintage is great, but not when it chief digital officer. Today, increasingly sophisticated comes to how you work. the company’s designers and differentiated. In are using 3D for product Patrice Louvet, this challenging and CEO, Ralph lauREn creation and RFID (Radio uncertain environment, Frequency Identification) with significant operating technology all along the supply chain. restrictions and heavily reduced international travel, the luxury industry faces an uphill Like Louvet, luxury leaders all over the battle to generate revenues from physical world are grappling with how to adapt to an stores as they reopen. Digital takes an even industry where digital is driving swift change. more prominent role as brands work to The arrival of COVID-19 has significantly attract new local customers while also serving amplified this issue and the need for existing customers who are no longer able to businesses to transform. visit their favorite stores in-person. EMBRACING DIGITAL, LUXURY CEOS TAKE ON THE ROLE OF CHIEF COLLABORATION OFFICER Table stakes for CEOs have always been embodying the Leaders and teams that collaborate effectively across brand, serving as brand guardian and ambassador for functions, whether remote or together, are better the organization. These required attributes of luxury positioned to share ideas, understand evolving leaders remain unchanged, even in these extraordinary customer expectations and deliver an exceptional circumstances. However, the organizations that will experience, whether making an in-store purchase or emerge stronger from the crisis are those with leaders scrolling through a brand’s Instagram account. CEOs who can orchestrate seamless collaboration and who create a collaborative and agile culture are best cooperation across their teams and all customer touch equipped to develop innovative solutions to new points — social media, advertising, the designer they problems and to instill a deep sense of brand loyalty in select, the products and collection structure, the look customers. In short, this is the era of the CEO as chief and feel of stores, and the services offered in the stores. collaboration officer. INTERVIEW PARTICIPANTS As part of our research, we interviewed 20 leaders of luxury companies around the world to learn more about the pressures they’re facing, how they’re adapting and excelling, and which talent trends they believe will define the new era of luxury leadership. While most of these interviews took place before the arrival of COVID-19, we believe the insights they provide are as relevant, if not more so, in the context of the crisis. » Thierry Andretta, CEO, Mulberry » Daniel Lalonde, president and CEO, SMCP » Francesca Bellettini, president and chief » Mark Langer, CEO, Hugo Boss executive, Saint Laurent » Patrice Louvet, president and CEO, Ralph » François-Henry Bennahmias, CEO, Lauren Audemars Piguet » Alexander Pavlov, CEO, TSUM » Bhaskar Bhat, former managing director, Titan Company Limited » Patrick Pruniaux, CEO, Swiss Watchmaking Maisons: Ulysse Nardin & Girard- » Marco Bizzarri, president and CEO, Gucci Perregaux at Kering » Alessandro Bogliolo, CEO, Tiffany & Co. » Vittorio Radice, vice chairman, La Rinascente » Valerie Chapoulaud-Floquet, former CEO, Rémy Cointreau » Stefano Sassi, former CEO, Valentino » Pierluigi Cocchini, CEO, La Rinascente » Paulette Sum, group general manager, King Fook Holdings Limited » Brian Duffy, CEO, The Watches of Switzerland Group » Eric Vallat, CEO, Rémy Cointreau » Marco Gobbetti, CEO, Burberry Group SPENCER STUART PAGE 2 EMBRACING DIGITAL, LUXURY CEOS TAKE ON THE ROLE OF CHIEF COLLABORATION OFFICER Oracles of change in a shifting digital landscape Digitization was already a highly significant trend for Everything we do is part of the same story.” the luxury retail sector before COVID-19, impacting all aspects of the business from supply chain processes to Prior to the crisis, online sales represented around 12 consumer touchpoints. Brands are using digital percent of the personal luxury goods market, according technologies in product design, warehouse to Bain-Altagamma’s 2019 Worldwide Luxury Market management, supply chain and product authentication, Monitor, with 75 percent of purchases influenced and are analyzing customer and sales data to develop online. For this reason, many luxury retailers have collections and to structure the assortment of the already shifted much of their marketing spend to digital stores in a more informed and intelligent way. channels. As Alexander Pavlov, CEO of TSUM, explains: “Digital advertising is much more efficient than The pandemic has now magnified the importance of traditional advertising. You can immediately see results digital with McKinsey and The Business of Fashion's and change strategy.” report, "The State of Fashion 2020 Coronavirus Update" reports, “Social distancing has highlighted the Every part of the business must adopt a digital mindset importance of digital channels more than ever and and foster a cohesive culture and organizational model lockdowns have elevated digital as an urgent priority that supports transformation. Marco Gobbetti, CEO of across the entire value chain but, unless companies Burberry Group, explains, “We don’t think it is about scale up and strengthen their digital capabilities in the making the in-store experience more technological, but recovery phase of the crisis, they will suffer in the longer rather it’s about using the store to continue the journey term. Consumers will continue to demand more in this that starts online — and creating experiences and space and brands must act fast to deliver.” information that is a continuation of the social journey to build strong engagement with customers.” The timing for brands that had invested significantly in digital capability could not have been better. Hardest We see digital as a channel to communicate with hit in this crisis are companies with broad brick-and- younger people and help us engage with those mortar footprints that have yet to transition to an omnichannel model. customers. It’s a good way to build brand and customer engagement. Digital today must drive better, more distinctive PauLette Sum, customer experience seamlessly across channels. gROup gEnERal managER, Brick and mortar and e-commerce are no longer King FOOK hOldings limitEd bifurcated in the eyes of consumers. “When they buy something from your brand,” says Thierry Andretta, Whereas a decade ago, “digital” might have been the CEO of Mulberry, “customers don't care if it’s being job of the information technology (IT) function or an delivered or purchased in-store. They simply want isolated digital team, today leaders at the top must impeccable service.” embrace digital, make it a priority and model that mission for the organization. As a result, leaders now need to think about the customer journey in a more unified and collaborative Some companies look to the technology industry to way. They can no longer consider functions or business bridge the gap. SMCP President and Chief Executive units in isolation as they are all part of the experience Daniel Lalonde hired his lead digital executive straight and brand ecosystem. Which is why, says Vittorio from Amazon. He set up a team working transversally Radice, vice chairman of La Rinascente, “We no longer to coordinate business with IT and managed any focus on shopping experience, but on experience. frictions as they arose. SPENCER STUART PAGE 3 EMBRACING DIGITAL, LUXURY CEOS TAKE ON THE ROLE OF CHIEF COLLABORATION OFFICER For luxury leaders, there is now a renewed and even consumption becomes a permanent shift. With all of more urgent responsibility to instill a digital mindset this in mind, here are the approaches luxury leaders across the company every day. One of the most closely will need to take as they “think digitally” into the new watched areas of consumer behavior emerging from decade and as they navigate through the pandemic. the crisis will be the extent to which increased online Embrace data-informed decision-making Brands can now use data to analyze consumer chief executive of Saint Laurent, explains, “We don’t decision-making and behavior, using artificial necessarily need a data science department isolated by intelligence (AI) and other methods to target the rest of the company. We need digital and analytical customers with relevant, precise recommendations and talent in every function — a cross-pollination of offers. But today’s luxury leaders are harnessing data capabilities and competencies, fully integrated in for much more than just personalized marketing. each team.” They’re using AI in the supply chain to automate the management of warehouses and the maintenance of
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