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

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CONTENTS FROM THE EDITORChapter 1 • The luxury sector faced

with the health crisis

Nicolas Zunz & Denis Terrien

“It has become impossible to separate meaning and growth”

Luca Solca

“Luxury houses must streamline their physical networks”

Chapter 2 • Reinventing the customer

relationship

Nicolas André Data for a new customer relationship

The return of clienteling in luxury

David Nijaki Mercedes-Benz: “Unifying data is a capital challenge”

Breitling in the time of customer advocacy

Accor Luxe & Premium consolidate data for the customer experience

Arthur Barbey Omnichannel: technology to kick-start the customer relationship

Brunello Cucinelli, Delvaux, Hotel Group

Omnichannel, a necessary luxury

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44

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Chapter 3 • The fine challenges of

luxury houses

Laure Debos Customer-centric strategy: pitfalls to avoid and quick wins to secure

Déborah Marino In China, the enchantment that money can’t buy (anymore)

Generation Z, a taste for unadorned luxury

Values are no longer a luxury

At the end of the first lockdown, 2020 seemed like a perilous year for luxury houses. Consumer confidence was low, stores were closing their doors, fashion weeks went digital by mandate, with no beautiful clothes in the front rows. Fortunately, the year ended with an encouraging rebound, proving that the major luxury houses have more than one trick up their sleeve.

At Epsilon, Publicis Luxe and Salesforce, we believe that every crisis is an opportunity to learn and evolve towards new, more efficient and more resilient models. That’s why we turned to the experts to discover their analysis of the situation. For these experts, major luxury houses must step up their efforts to redesign the customer experience. Data will fuel customer relationships over the long term, applying all the charm of customer care across every stage in the customer experience. Brick-and-mortar storefronts and online shopping sites are converging through an omnichannel logic.

While the big luxury houses have already embraced these new values, many challenges still remain: avoiding the pitfalls associated with omnichannel strategies, interacting authentically with the powerful Generation Z, understanding the changing expectations of Chinese consumers, committing to environmental and social guarantees... Discover these trends now in the following pages.

Enjoy the read.

Salesforce, the global leader in CRM, enables companies of all sizes and in all industries to drive their digital transformation and gain a 360-degree view of their customers.

Publicis Luxe aims to work with luxury brands to create innovative experiences that enrich products, services and storytelling to create a special emotion in every moment and build unique relationships over time.

Epsilon France is the Publicis Group’s data marketing entity with 750 Adtech and Martech employees. Its mission is to help brands sustain their growth by leveraging their data assets and quality customer relationships within a world dominated by platforms.

Photo credits: ©Ryoji Iwata on Unsplash, ©Joachim Lesne on Unsplash, ©Flaunter LI on Unsplash, ©Ke Atlas on Unsplash, ©Olive on Unsplash,

©Markus Spiske on Unsplash, ©Hunters Race on Unsplash


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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.

CHAPTER 1

THE LUXURY SECTOR FACED WITH THE HEALTH CRISIS


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“IT HAS BECOME IMPOSSIBLE TO SEPARATE MEANING AND GROWTH”

As e-commerce emerges as an essential growth

driver during the crisis impacting the luxury sector,

luxury houses must focus their efforts on the

customer experience and omnichannel approach,

without compromising their values. We hear from

Nicolas Zunz, Vice President of Publicis Groupe in

France and President of Epsilon France, and Denis

Terrien, Executive Vice President Southern Europe at

Salesforce.

Beyond its severe financial

consequences, is the Covid-19

crisis also calling into question

the standard business model at

luxury houses?

Nicolas Zunz: This is one of the key lessons from the current crisis: customers are increasingly looking for meaning in all their purchases. Though it applies across every sector, this trend is even more pronounced in the luxury sector, which is expected to be exemplary. This is even more true for Generation Z, which will account for at least half of luxury purchases in 20 years. For this generation, a brand’s lack of ethics or commitments may represent a true casus belli.

Denis Terrien: Faced with rising social inequality around the world, luxury brands, perceived as being privileged services, must show vigilance and amplify their efforts. Covid-19 has urged the luxury sector to redefine itself. More than ever, it must find ways to present itself clearly in order to generate interest rather than distrust. Today, it has become impossible to separate meaning and growth.

Nicolas Zunz Vice President of Publicis Groupe in France and President of Epsilon France

Denis Terrien Executive Vice President Southern Europe at Salesforce

On the business side, the drop in

tourism (especially from China)

has a direct impact on store

networks. How does this change

the strategies of luxury houses?

D. T.: The current crisis has revealed the value of having a centralized IT and global marketing organization. Some houses were better equipped than others to absorb the shock of this crisis. They were able to bounce back quickly and focus their marketing communications efforts on regions that were less affected by the health crisis. We should remember that the luxury industry, especially hospitality, is used to geopolitical crises leading to lockdowns across entire regions. When tourists no longer travel, we have to know how to reach them in their home countries!


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*Source: BCG x Tencent Digital

Luxury Report

What growth drivers should be

preferred?

N.Z.: E-commerce is the preferred growth driver. Today, it represents more than 10% of revenue at luxury houses*, although it was non-existent 15 years ago. It is a completely exponential market. However, I don’t believe that luxury is behind in this area. Recall the creation of Net-a-porter in the 2000s, the first Hermès website in 2001, Farfetch in 2007, Vestiaire Collective in 2009... Very few sectors have such an e-commerce ecosystem with direct-to-consumer, wholesale, rental and now even resale platforms. It was consumers who were not ready to shop online for products as complex as luxury goods. This resistance to e-commerce is disappearing.

In my view, if there is any delay, it would be in the digital customer experience. Luxury houses must find a way to offer the same

experience online as in-store, meaning an ultra-personalized experience. In many cases, brands have yet to offer even a personalized homepage for their regular customers.

D. T.: We are seeing that luxury is no longer an exception to the notion that service is just as important as the product. Product quality must be combined with the best possible customer experience, both during and after the sale. It’s not just about sales, but also the customer journey: the customer journey is an omnichannel adventure, both virtual and physical. We have to develop a 360-degree view of a customer’s entire life with a company. It’s truly exciting.

Are you optimistic about the

luxury sector’s ability to succeed

in its digital transformation?

N.Z.: I’m fairly optimistic because consumers are much less hesitant to use digital than before, even for big purchases. Ten years ago, no one would have bet that $1,000 dresses could be sold online without a fitting. Today, live sales for luxury goods are booming in China. Moreover, luxury customers are more than willing to share their data. Studies show that 45%* feel that using their personal information is crucial for enhancing their brand experience.

To keep up with the desires of a mobile and evolving clientele and evolving customer base, it’s essential to own and master certain technologies. That’s where Salesforce’s tools and support can make a big difference.


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What advice do you have for

brands trying to engage their

customers?

D. T.: The burning question of the moment is how to better connect with customers in a luxury sector where the balance between physical and virtual sales is shifting. At Salesforce, we are fully capable of helping luxury houses combine the two, within a single system. That’s our business: enabling companies to better connect with their employees and customers. This connection has become more crucial than ever since the start of the health crisis.

Products will no longer sell themselves. Without taking anything away from their intrinsic quality, they must be paired with a strong and engaging multi-channel experience for the customer. When a customer walks through the doors of a store, the salesperson who greets them must be able to retrace their entire relationship with the brand over the past several years, whether physical or virtual, anywhere in the world.

“LUXURY HOUSES MUST STREAMLINE THEIR PHYSICAL NETWORKS”

Luca Solca Managing Director Luxury Goods at Bernstein

With the crisis, the future of luxury is

certainly digital, but will the future of

luxury houses remain physical?

Luca Solca: Yes. Consumer purchases have massively shifted online due to the crisis and luxury houses must now streamline their physical networks at a much faster pace than expected. How? By focusing on a leaner network that is more impactful and more deeply rooted in their DNA – like Apple, whose products and points of sale all speak with one voice.

Luca Solca, Managing Director Luxury

Goods at Bernstein, analyzes the

impact of the Covid-19 crisis on physical

store networks operated by luxury

houses. He also outlines the potential

opportunities and risks of shifting to

digital.N.Z.: The current challenge for luxury brands is to match the experience and personalization of pure players and DNVBs (digital native vertical brands). These new experiences have become the standard and norm for Millennials who are demanding the same experience in the luxury sector. This is a huge challenge for luxury houses, which have traditionally relied on customers coming to them. Now it’s their turn. This is a cultural revolution that has only just begun.

The current challenge for luxury brands is to match the experience and personalization of pure players and digital native vertical brands.

Nicolas Zunz


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Luxury houses have long favored vast flagship stores. In my opinion, we need to question that model. We should not be asking ourselves if a store looks luxurious enough, but if it conveys the right values. For example, Fendi recently opened a full studio inside its Rome store. It’s a brilliant idea in terms of customer experience.

What has changed is that it is no longer possible to do the same thing as 15 years ago, when luxury houses built their networks with identical stores from one capital to the next. For customers, a standardized store almost always means a bad experience. We need to give them good reasons to visit stores when they travel. This is precisely what Dior is trying to do by reopening its historic address on Avenue Montaigne in 2021, with spaces dedicated to ready-to-wear, lounges for haute couture and a restaurant that opens onto a garden.

What are the opportunities and

risks involved when brands shift

to digital?

L.S.: Customers have simple expectations. They want to have the same experience both online and offline. For brands, this means accelerating their omnichannel approach in order to recognize the customer at each stage of their journey. In terms of logistics, however, the sector should not try to reinvent what others are already doing very well (such as Amazon or Alibaba, which provide same-day or next-day delivery). For reasons of scale, these operational aspects are not within the reach of luxury houses. The same goes for payment, where WeChat Pay and AliPay offer integrated and immediate experiences that have set the model. Luxury houses should rely on the major operators and focus on what they do best: experience and packaging.

Lastly, by accelerating digital distribution, the Covid-19 crisis has raised a major issue: price discipline. Pricing should be identical both in stores and online, including on multi-brand platforms like Farfetch.

Regarding the rise of digital,

are we seeing different

strategies emerge in different

geographical regions?

L.S.: Until now, China has enjoyed a huge lead, as exemplified by the Luxury Pavilion launched in 2017 by Tmall, the Alibaba Group’s marketplace. This upscale site offers a selection of exceptional brands. It’s a concept that has proven itself and is now inspiring several American giants. Amazon, Facebook and Instagram are following the example of Tencent and Alibaba by stepping into multi-brand digital luxury distribution. In a way, everyone is aligning themselves with Chinese standards.

We are witnessing an extremely rapid evolution. The crisis and scarcity of Chinese consumers have only accelerated these trends. It’s like we just experienced five years of evolution in only six months.


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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?

CHAPTER 2

REINVENTING

CUSTOMER

RELATIONS


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“A glaring lack of customer data.” For Nicolas André, Director

of Strategic Planning at Epsilon France, the situation is clear. As

luxury brands set out to conquer online customers, it is imperative

that they fill their tanks with data, the true fuel of a personalized

customer relationship.

Technology and data are not enough. It’s above all a race for insight, for understanding customer expectations and demands.

DATA FOR A NEW CUSTOMER RELATIONSHIP

A customer database is an asset as essential as it is difficult to build. In this area, luxury houses are often starting from scratch. They need to move on from the one-shot aspect of one-time relationships they have long had with tourist clientele, particularly from China, who often walk out the door with a beautiful piece, never to come back.

With the onset of Covid-19, luxury houses soon found themselves cut off from this foreign clientele, which accounted for up to 70% of their sales. “The European luxury houses must today capitalize on their domestic markets by turning towards a local clientele,” explains Nicolas André, “thereby reducing their dependence on foreign buyers.”

Given this, where can they start collecting this precious data? Luxury houses, especially in the jewelry and watchmaking sectors, do not always have physical points of contact with their customers. And when they do, they are not always designed to encourage customers to return or to collect their data.

“However, luxury houses no longer have a choice: they must become data champions,” says André. This is a major challenge for a sector that is traditionally not very tech-savvy and is unfamiliar with data marketing, where many players, despite their financial power, are starting from scratch.

MORE THAN A RACE FOR

TECHNOLOGY, A RACE FOR

INSIGHT

More than just a shift to e-commerce, the priority is to move from an ephemeral customer relationship to one that is deep and lasting. “To do this, technology and data are not enough,” says André. “It’s above all a race for insight, for understanding customer expectations and demands.”

This is good news for luxury houses in their battle against digital giants. “Amazon, which has its sights set on the luxury sector, does not generate any emotion and is ranked by Generation Z as one of the most boring companies. Luxury, with its DNA woven with passion and values, has a bright future ahead.”

Nicolas André

Director of Strategic Planning at Epsilon France


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At a time when customer relations need a total overhaul, clienteling is experiencing a resurgence of interest among luxury brands. Clienteling is the fine art of long-term customer relationships, nurtured by a detailed knowledge of their preferences and purchasing behavior. This is a relationship of trust and reciprocity, in which the consumer and the brand know and recognize each other. In short, luxury brands must be able to offer the customer a friendly, intimate relationship. In short, a hyper-premium relationship. Mass-market brands have already understood that this is the best way to respond to Millennials desire for personalization. This means luxury brands must raise the bar even higher.

THE RETURN OF CLIENTELING IN LUXURY

Clienteling in the data age is first and foremost a tool allowing companies to connect with customers with perfectly updated files, in order to address them in a personalized way, in all stores, even if their dedicated consultant is absent. At the point of sale, this involves sharing customer data, with their consent, in order to feed the CRM with total confidence. To make future visits even more personalized, it is also possible to also add wish lists, measurements, etc.

Using a fully detailed database, it becomes possible to orchestrate marketing campaigns that proactively address the 20% of customers with the highest spending power by offering new services. For example, a custom shoe designer can ensure customer satisfaction by sending a personalized email a few weeks after the purchase. Even by email, the designer can provide valuable maintenance tips, or even suggest a new appointment in store for a personalized polish or repair, all thanks to Salesforce Marketing Cloud.

What’s better than knowing a customer?

Recognizing a customer. As the industry goes

through its digital transformation, luxury

houses are revisiting the recipe that has long

underpinned their success: the fine art of

clienteling.

Classic phone calls had fallen out of fashion in favor of hip events and engagement strategies. It is now valued as the preferred vehicle for one-on-one contact, especially for VIP customers in the luxury world.

Emanuela Prandelli

Associate Professor at SDA Bocconi School of Management, quoted by Fashion Network


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MERCEDES-BENZ:“UNIFYING DATA IS A CAPITAL CHALLENGE”

What paths do your customers

take when purchasing a new

vehicle?

Ninety percent of them start their journey on the digital platform before visiting a dealership. Accelerated by the health crisis, digitization has become an essential complement to a physical network, which remains of vital importance. Moreover, manufacturers with online sales tools have weathered the crisis much better. Nowadays, customers get information online, make a short list of two or three brands, only to visit one or two in the end. Across all manufacturers, 60% of customers make up their minds within a month. The challenge for Mercedes-Benz is to make it onto this list in a very short timeframe.

How do you use data to detect

purchase intentions and interact

with your targets?

At Mercedes-Benz, a large share of our customers have signed a financing contract, so we can anticipate this window of opportunity. We know when we need to act to convince them to buy with us again.

For non-financed customers, data is crucial for analyzing purchasing paths. It allows us to detect purchase intentions and encourage renewals, thanks to a history of interactions with the brand and analysis of online behavior. We use this data to increase the intensity of our communications to relevant customers.

For these reasons, we invest in digital and CRM in order to send each customer personalized commercial offers, test drive suggestions and more. Once identified, leads are shared with our network of dealers, who are responsible for conversion.

How do your prospects begin

their purchasing journey?

The main channel our prospects use is our official website, www.mercedes-benz.fr. This is where they can find complete information about our line. Social media also has an influence, although it is only perceived as a priority source of information by 20% of our customers. However, Facebook users have become older and its audience is more in line with our targets. This platform has therefore become

David Nijaki Marketing and Communication Manager at Mercedes-Benz France

It’s a genuine race against the clock.

To convince their customers to remain

loyal, premium car manufacturers

have an extremely short window of

opportunity when customers are

changing vehicles: a few weeks at most.

But thanks to data, they can make

sure they have the best position at the

starting line. This is a key issue, even

as loyalty rates vary between 50% and

65% according to studies. David Nijaki,

Marketing and Communication Manager

at Mercedes-Benz, explains.


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BREITLING IN THE TIME OF CUSTOMER ADVOCACY

This real-time analysis is also important for orchestrating communication actions between the various sales and after-sales activities and our network. Let’s take the example of a customer who may wish to receive offers for the maintenance of their vehicle while negotiating with a distributor for a renewal... This is a faux pas to avoid, especially in a pivotal moment.

This unification of data throughout the customer journey is highly complex, but essential. A key challenge.

a source of traffic in its own right with interesting conversion rates. On Instagram, our communication goals have more to do with brand presence and engagement than the bottom of the funnel.

Do you feel that the issue today

is no longer data collection, but

real-time data analysis?

We focus a lot on analysis, but data collection remains important. The GDPR law has shaken up our practices, particularly in terms of how long data is retained. A customer updates their vehicle every three-to-six years. To retain their data, we need to continue to interact with them. The legal environment, especially regarding cookies, may also penalize us for collecting and analyzing data to reach the right people at the right time.

In the luxury sector, where word of

mouth plays a decisive role, the famous

Swiss watchmaker is shaking up its

customer advocacy strategy. Here are

some very conclusive first results on its

e-commerce sales.

In a recent interview, Breitling CEO Georges Kern pointed out that 70% of purchases are influenced by information circulating on the web. To reach its targets, the watchmaker has chosen to rely on the ability of its customers to become ambassadors, in other words customer advocates, a trend that is becoming increasingly important in the strategies of luxury houses. For these houses, it has become an invaluable central asset, together with brand prestige and the notoriety of its creative director.

In a scientific way, Breitling’s marketing and data teams have analyzed the customer data collected in the boutique network over the past 10 years, as well as the data generated by its internet marketing campaigns. On this basis, Breitling is able to personalize its communications and analyze weak signals that predict purchase intentions based on customer history. The result? Increased efficiency of marketing efforts aimed at improving up-sell and cross-sell.

Since implementing this strategy in 2017, Breitling has recorded a sharp rise in e-commerce sales, which represent 15% of its total sales (by adding those of its e-commerce site and those of it of its resellers). And it’s only just begun: “We now intend to triple our online sales,” says Antonio Carriero, Chief Digital & Technology Officer at Breitling.

90%OF CUSTOMERS START THEIR BUYING PATH ON DIGITAL

A FLAWLESS CUSTOMER JOURNEY

Invitation. The brand personally invites the customer to a fashion show. A personal shopper makes sure the customer attends.

Personalized support. A digital platform allows the customer to attend the fashion show with their personal shopper, who provides advice and prepares a shopping list.

Infatuation. The customer discovers the brand via a social network and makes a first purchase.

Order confirmed! The customer can find their selection on the brand’s application. They can choose which pieces they like, indicate a delivery address and confirm their order.

An immersive experience. The customer meets their personal shopper in the brand’s private showroom. Using augmented reality, the customer can visualize products that are still being made.

Assessment. The customer is active on social media and mentions the brand, their feedback is identified and enriches their profile.

Regular updates from order to delivery. The customer is regularly updated at each stage in product delivery. Each update includes personalized content (new looks, an inside look at the brand’s studios).

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ACCOR LUXE & PREMIUMCONSOLIDATE DATA FOR THE CUSTOMER EXPERIENCE

Within the Accor galaxy, the Luxury &

Premium brands represent a portfolio

of nine world-class brands and over

600 hotels. To leverage its data- and

offer-optimized experiences, the

upscale hotel giant has chosen to

deploy Tableau.

“For our Luxury & Premium brands, we had already succeeded in unifying data as diverse as finance, quality, distribution and social media with Tableau Online,” recalls Geoffray Maugin, SVP Global Guest Experience & Business Performance. “Soon, we will add data sources from other business areas such as sustainability, loyalty or food and beverage sourcing. These consolidated insights on the country, regional and global levels will help us drive better performance at all levels, which is significant.” Centralizing data through Tableau Online has quickly led to spectacular improvements.

“Time spent updating and delivering reports went from 10 days to just two hours,” notes Nicolas Leseurre, Director of Planning and Analytics. “We also used Tableau Bridge (which connects Tableau Online to firewall-protected data sources) to create a single reporting process for all hotels, further amplifying its impact across the company.”

Accor Luxury & Premium end users now have quick and easy access to a wide range of diversified key performance indicators in Tableau Online, giving them a 360 degree vision of every aspect in a single space, as opposed to using several platforms like before.

“We’ve also used Tableau Online’s extensive functionality to reorganize the way we build and present our reports. With this visualization, we can count on tables that will speak to everyone.”


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It is widely known that luxury customers demand highly personalized service, immediate attention to their requests and an equally fast response. What was already true in stores is now true online. And this expanded scope of action makes the task at hand for luxury houses considerably more difficult. Their customers will not wait, they do not expect to speak to several representatives, and they certainly don’t want to repeat their requests at each step.

TECHNOLOGY TO KICKSTART THE CUSTOMER RELATIONSHIP

Throughout their buying journey,

consumers have become

accustomed to switching from one

channel to another, depending on

what they find most convenient.

Adding to this is an aspect that

is specific to luxury customers:

their ability to jet from one capital

to another (when world health

allows it). This leaves only one

answer: commit to an omnichannel

strategy.

Arthur Barbey Distinguished Solution

Engineer Salesforce

Impeccable, fast, pertinent and efficient customer service has become much more than a mere advantage for companies. It has become a requirement and a criterion of choice for consumers, in the same way as product or service quality.

DATA, THE FUEL OF A

PERSONALIZED RELATIONSHIP

To meet this challenge, companies collect a lot of information about their customers throughout their interactions, thanks to their personal shoppers working in store and remotely. Customer activity on social media and e-commerce sites also provide valuable indicators for gauging their tastes, expectations and satisfaction.

At the point of sale, a digital clienteling application is a practical way to build a personalized customer relationship with immediate access to customer files and inventory. As a result, sales staff can get answers to all their questions and collect new information that can be used for future visits as well as for customer service. Sales staff can even use this tool to keep in touch by sending emails or texts to customers, according to their preferences. And in the event of turnover or absence within the teams, there is no risk that a customer will be left on their own, since all their information is centralized in the CRM and easily accessible to everyone.

All this data also plays a decisive role in customer acquisition and activation, as well as personalized customer journeys

As market trends and consumer habits show, the ultra-personalized experience across all channels is a priority for houses.


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from the nearest store, to reduce wait times and shipping costs. In this way, thanks to the OMS, the company can respond to the most frequent requests of its customers: to pick up an item in the nearest store, to know if an item is available in a certain color and size, and if it is possible to have it delivered within a day.

A SEAMLESS OMNICHANNEL

EXPERIENCE

As market trends and consumer habits show, this ultra-personalized experience across every channel is a priority for luxury houses, whether it is on digital channels like the e-commerce site, in store with sales staff, following a marketing

and retargeting strategies. On the digital side, artificial intelligence can also support teams.

By offering style recommendations adapted to the customer profile, marketing campaigns, purchase journey and intentions, AI can increase the customer’s shopping cart through cross-selling logic.

UNIFIED INVENTORY, SATISFIED

CUSTOMERS

By using an order management system (OMS), companies can easily handle exceptionally complex processes in a way that speeds up purchasing. It provides a quick and easy way to answer all the questions on their customers’ lips: “Is the product I want in stock?”; “Is the product I want available for pickup in store today?”; “How can I benefit from concierge service?”

A crucial link in any omnichannel approach, the OMS system organizes distribution so that the product reaches the customer as quickly as possible. It streamlines shipments by analyzing store and warehouse inventories. In this way, the OMS system facilitates ship-from-store processes to deliver to customers directly

campaign or in during customer service, the experience must be the same for the consumer.

Using a digital platform like Salesforce makes it possible to tailor marketing campaigns to a customer’s profile and journey. Customer service can converse directly with the consumer on messaging channels such as Messenger or WhatsApp. It also contributes to drive-to-store advertising, thus facilitating the selling ceremony. It can also function as a source of profit by taking the order directly on the same channel through native integration of Salesforce e-commerce, customer service and OMS systems with the payment ecosystem.

+ 11 POINTS

2025

The share of online luxury goods purchases increased from 12% in 2019 to 23% in 2020, reaching 49 billion euros (Bain & Company, Luxury Study 2020).

By this date, online sales will have become the main purchasing channel for luxury products, according to Bain & Company.

As market trends and consumer habits show, the ultra-personalized experience across all channels is a priority for houses.


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OMNICHANNEL, A NECESSARY LUXURY

Whether they operate in the leather,

fashion or hotel sectors, the leading

players in luxury goods are investing

in omnichannel strategies to offer the

online experience their customers

demand. Here are some inspiring

examples.

Brunello Cucinelli • Digital with more

soul

“If you don’t accept the changes of your time, you will probably miss out on most of them.”

For the Italian stylist and entrepreneur Brunello Cucinelli, new technologies must be used but “in a graceful way, without stealing our souls”. With Salesforce, the iconic Italian luxury company has found a way to marry craftsmanship and service with technology that helps employees elevate the luxury experience.

“Digital is by nature a little cold, a little impersonal,” says Francesca Picchiò, Digital & CRM Program Manager. “Thanks to Salesforce, we’ve been able to build customer journeys that are as close as possible to our customers’ expectations and desires.”

It’s not easy to roll out the authenticity of a company that is closely tied to its home territory, Umbria, on a global scale. With Salesforce, Brunello Cucinelli has achieved this feat with a digital storefront available in 50 countries. Thanks to Marketing Cloud, every communication has a personal dimension, and recipients often respond to e-mails by addressing Brunello directly. The result: since migrating the company’s e-commerce to Commerce Cloud in 2016, the company has quadrupled its online revenue.

Delvaux • An online experience as

perfect as in-store

Founded in Belgium in 1829, Delvaux is the oldest luxury leather goods company in the world and now has 42 stores in Europe, Asia and the United States. Upon taking the helm of the company in 2019, CEO Marco Probst implemented a strategy to digitize the company in order to meet customers’ growing expectations for omnichannel engagement. “We wanted to gain complete visibility into the customer journey and recreate our unique and refined boutique experience across all digital channels,” says Nelson Bastos, Delvaux’s CIO.

To achieve its digital ambitions, Delvaux has deployed Sales Cloud and Marketing Cloud, as well as an integrated personalized application, Diamond, dedicated to its store staff. Like many companies, the Covid-19 pandemic accelerated Delvaux’s move to digital, and the data centralized in Salesforce provided it with real-time information to help adapt its strategy. As a result, despite closing its stores during lockdown, staff were able to continue maintaining customer relationships and sell remotely through the Diamond app.

Digital marketing is an important part of Delvaux’s strategy. “With richer information, we can bring more value-added content to our customers, for example by sending them details on products that match their past purchases or browsing history,” says Paul Flacassier, Head of CRM.

Hotel Group • Dynamic and

personalized marketing

Hotel Group consists of seven hotel properties and serviced apartments in Hong Kong – or more than 2,800 rooms. To provide a truly personalized experience, the subsidiary of the Chinachem real estate group needed a solution to centralize its data.

“Our ambition is to have a comprehensive view of our customers and all their interactions with the Chinachem group, whether they stay in a hotel, visit a shopping mall or support a charity organization,” explains Sylvia Chung, Deputy CEO of the Hotel Group. “Salesforce helps us gain new insights from this data to improve the effectiveness of our campaigns and enhance the customer experience.”

Service Cloud provides a comprehensive view of each customer. Hotel Group can use this information to design, develop, personalize and measure all future marketing campaigns through Marketing Cloud. “In the past, we would send very standard emails to promote rooms and rates. Now, the marketing is much more personalized and dynamic, while saving our teams a lot of time,” says Jack Tam, Director of Innovation and Digital Transformation at Hotel Group.


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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.

CHAPTER 3

THE FINE

CHALLENGES

OF LUXURY

HOUSES


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CUSTOMER-CENTRIC STRATEGY: PITFALLS TO AVOID AND QUICK WINS TO SECURE

With the Covid-19 crisis and the rise

of Generation Z, luxury brands are no

longer just an object of desire. They

now have to take the perilous step of

making the first move. To make sure the

odds are in their favor, they can rely on

data. Here is our guide.

While widespread use of CRM is already a matter of fact for many players in the retail industry, the same is not always true for luxury houses. But the current health crisis is about to change all that. With online sales soaring, luxury players are rethinking clienteling and long-term relationships. To do so, they must be able to recognize their customers at every interaction, from the moment they walk through the door of a store, to the

Laure Debos Executive Vice President of Epsilon France

moment they connect online. This means having information on their measurements, favorite cuts and colors, latest purchases, products they’ve liked on Instagram and others that leave them cold, all at their fingertips.

“Luxury house customers are, by nature, hyper demanding, hyper mobile, highly informed and multi-channel. We need to document all their interactions and purchases to develop a hyper-personalized relationship and avoid, for example, offering a product that has already been purchased,” says Laure Debos, Executive Vice President of Epsilon France.

“Today, it is difficult for companies to set this all up on their own. They will only succeed if they rely on partners, even if it means bringing this expertise back in-house at a later stage, perhaps after two or three years of operation.”

There are many pitfalls to avoid when starting from scratch. Setting up a CRM impacts the fundamental organization of the company, notably mixing business, technological and legal. “Today, the houses that are doing well are the ones that already invested in CRM five to 10 years ago and have had the time to improve, rethink their distribution network and train their employees. In essence, digital transformation is a cross-functional, global project that requires the support of top management.”

The idea of putting the customer at the center was not always the norm in the luxury sector. Since the 19th century, it has cultivated distance and secrecy, an elitist

The houses that are doing well are the ones that have invested in their CRM


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IN CHINA, THE ENCHANTMENT THAT MONEY CAN’T BUY (ANYMORE)

approach. Today, the digital revolution, Generation Z and the Covid-19 crisis are reversing the poles: “They impose a logic of proximity rather than distance, of transparency rather than opacity, of interactivity rather than one-way relationships. It’s a disruption. We are moving from a brand-centric logic to a customer-centric logic, even if luxury may never go as far as retail.”

QUICK WINS

How many years will it take to get there? It depends on the size of the house and its organization. Under one year is unrealistic. But between 12 and 36 months, anything is possible. After the evaluation (two to four months), a phase of vision based on different methodologies such as design thinking. It is then necessary to embark on the bold task of explaining this vision by mobilizing executive management. A road map will allow companies to achieve various quick wins. How can they quickly optimize e-mailing campaigns? How can they improve customer recognition?

How can they interact effectively with customers on social media? How can they scale up through an omnichannel strategy?

To do all this, companies must break down organizational silos. Sharing information between businesses requires a single customer database, a customer management platform that guarantees access to data for all employees from a single entry point, a single platform. A single source of truth.

The Covid-19 crisis imposes a logic of proximity rather than distance, of transparency rather than opacity, of interactivity rather than one-way relationships. It’s a disruption.

Déborah Marino Director of Strategic Planning at Publicis Luxe

After the bling years, young Chinese

consumers are adopting a more informed

relationship with luxury houses. Does this

mean that the balance of power has shifted?

An interview with Déborah Marino, Director of

Strategic Planning at Publicis Luxe.

How do young Chinese consumers define

luxury?

For a growing proportion of young, educated and affluent Chinese “influencers”, luxury is no longer just something that can be bought. Far from being an exception, in a country where material success remains a major objective, this new “golden generation” roots its unique nature in its rejection of a strictly materialistic vision of luxury, which it considers inconsistent with its values, passions and aspirations. In the eyes of 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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This new vision of luxury is accompanied by another phenomenon: the rise and justification of a new line of upscale Chinese and Asian brands and products. Korean luxury brands – in fashion, beauty and even culture – are very successful in China. We can even talk about Chinese pride. China no longer has an inferiority complex. It is no longer the world’s factory and the Chinese no longer feel the need to go abroad to buy luxury products. Their history, know-how and values are also fabulous sources of value for a more nationalistic consumer.

You explain that in China, “it is

no longer necessary to sell but

to tell”. What does this mean?

This generation is very comfortable with the complex ecosystems typical of the media journey in China and Asia in general. The more layered the

Simply put, they don’t just want to feel rich. For them, the true mark of success is to get what money can’t buy. For example, exclusive access to an auction, to a network, or to specific knowledge and skills... This is the idea that “money can’t buy everything” – that true riches are knowledge, culture and privilege, not just the fact of being able to acquire an object. They want purchasing knowledge instead of just purchasing power.

Where do these developments

stem from?

In China, we are currently witnessing a true cultural reversal among the most socially influential classes and, in terms of consumption, the rise of discretion or understatement. For them, the signs of success no longer lie in the mere possession of money. The anti-corruption campaign launched by Xi Jinping in 2012 has left its mark on Chinese society and its elites. The limitless and ostentatious staging of luxury brands is no longer successful. The purchase as an end in itself is no longer appreciated by this new, more educated generation, which feels it knows why it chooses a certain brand, product or experience.

OF GENERATION Z IN THE US SAY THEY ARE FANS OF LUXURY ACCORDING TO THE #ZGENERATION STUDY CONDUCTED BY IFOP AND DARKPLANNEUR (2018).

ONLY 20%

story and the more sophisticated the journey, the richer things become for the brand. It may seem counterintuitive to Western eyes, but the customer journey in China is like an adventure, where the notions of discovery and learning are key.

In the luxury sector in China, companies should not sell but tell. Each journey must be personalized, structured and enriched to the extreme. For example, a purchase process may last several years. Behind each object is a long history and legacy. But be careful: while the ecosystems must be complex, the transaction must remain simple and easy. In short, companies must market products with a beautiful story, like a Gallimard book, combined with a simple transaction like on Amazon.


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Listening to you, China is quite a

challenge for luxury houses …

Yes, China is a real laboratory for them. It’s necessary to observe behavioral changes closely because it is impossible to anticipate the creation of new formats. In this market, there is a need for an avant-garde approach that demands incredible effort and imagination from brands.

To conclude, I think it is absolutely necessary to establish an observatory on the cultural distribution of certain practices. What luxury houses must do in China to attract these new types of consumers will generate a unique skillset. We can then ask

GENERATION Z, A TASTE FOR UNADORNED LUXURY

Breaking with Millennials’

fascination for all that glitters,

Generation Z is forcing luxury

houses not only to rethink

their values, but also their

pricing policies. A necessary

reconsideration for the future.

They are called Generation Z. They were born between 1995 and 2010 and will account for one-third of the world’s population in 2020. Taken on their own, Zs spend the equivalent of 3 trillion euros globally each year and, in France, a little over 60 billion euros, according to a study published in 2019 by OC & C Strategy Consultants. Its relationship to luxury? Reasonable. Forget the selfie generation of Millennials. Generation Z is camped out in the world of the future, one that is more collective, as they navigate seamlessly between

affinity groups, as Eric Briones and Nicolas André described perfectly in their recent book, Le Choc Z (Dunod, 2020). The Zs unite around the values of inclusiveness, gender neutrality, entrepreneurship... If Millennials betrayed (especially on social media) an unbridled adoration for anything remotely resembling luxury, Generation Z is distancing itself from the term. Less impressionable, often less spendy, they don’t hesitate to question luxury brands by putting their finger where it hurts: values, meaning, price...

“The previous generations bought luxury products as if they were entering a sacred temple,” explains Nicolas André, Director of Strategic Planning at Epsilon France. “For Generation Z, it’s the opposite. It’s up to luxury to adapt to them.” The good

ourselves if the new Chinese way of telling the story of luxury products will be the future of the sector’s communication in the West.


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news is that the great struggle of this generation is inclusiveness: they want a more fluid society, with more freedom, parity and equality.

The luxury sector is one of the best placed to provide this fluidity. “For Generation Z, brands can be game-changers and are better able to bring about change than political movements,” says André.

THE PRICE OF LUXURY

Generation Z is the first to say they no longer want to pay the price of luxury: 57% say it is too high, according to a study conducted by Ifop for the Grand Prix Stratégies du Luxe 2019. And to question the pricing power of luxury is to attack one of its sacred pillars. The weapons used to do this are now well known: the use of second-hand goods and the circular economy. First, through community sales platforms (Vinted, Videdressing, Vestiaire Collective, etc.).

Secondly, through more sophisticated tools, such as blockchain, which ensure product traceability and facilitate the resale of luxury products between individuals. Also according to Ifop: 47% of French Zs bought luxury goods at private sales, and 36% bought second-hand luxury goods.

“Luxury houses cannot ignore this trend without running the risk of encouraging counterfeits. With total cynicism, Generation Z will not hesitate to resort to counterfeits if they feel a product is too expensive.”

This generation no longer has a relationship of fascination with luxury. In the United States, for example, only 20% of young people from Generation Z say they are fans of luxury, according to the #ZGeneration study conducted by Ifop and Darkplanneur. In other words, you can still lead a successful life even if you’re wearing a counterfeit Rolex at age 50.

WAITING FOR GENERATION

ALPHA

Another major trend: entrepreneurship, which is a leading value for Generation Z. This generation is conscious of the role companies must play to defend causes. This desire for collaboration pushes luxury houses to play the (vital) game of inclusivity, like L’Oréal with Nuxe and Biotherm, or LVMH with Fenty, alongside the star Rihanna… In doing so, luxury houses, which have the required cash flow and financial strength, are getting a facelift and accelerating their transformation. And what if Generation Z gives them wings?

GENERATION Z NO LONGER HAS A RELATIONSHIP OF FASCINATION WITH LUXURY. IT PREFERS PRIVATE SALES AND SECOND-HAND ITEMS.

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What do venerable luxury

houses share with a digital

transformation pioneer like

Salesforce? A lot. Including,

certainly, a shared responsibility

to their employees, customers,

ecosystem and the society

around them.

VALUES ARE NO LONGER A LUXURY

During the crisis, Chanel, Hermès, LVMH and Kering took remarkable action. Among their many initiatives, we can mention the maintenance of their employees’ salaries, the production of masks and hand sanitizer, as well as donations to hospitals.

Salesforce shares the same vision of its responsibility as a company. “Leaders can no longer afford to separate their business goals from the societal issues that surround them,” writes Salesforce CEO Marc Benioff in the introduction to Trailblazer, his latest book published in France in 2020.

“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.”


towards a more connected and engaged luxury

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