During this session, we will be discussing the online distribution strategy of Luxury brands. To prepare for discussion, read the case “Is YOOX strategy a little Farfetched?” and the article based on an interview I gave to Trends Tendances April 2017 at
What are the advantages and disadvantages for Luxury brands to be present on these platforms? is there a difference between YOOX and Net-a-Porter? YNAP and Farfetch? Does the YNAP merger makes sense? Should online platforms open brick-and-mortar stores? What is the interest for NAP to develop a media platform?
You might find interesting to watch the following video published by FT on YouTube.
In March 2015, TAG Heuer announced the launch of a connected watch at the Baselworld show. It was considered a paradigm shift in the traditional Swiss watch sector. Describe the challenges that TAG Heuer had to overcome to develop this connected watch. Are connected watches a threat or an opportunity to the (mechanical) Swiss watch sector? To provide rationales to your answers, watch both videos below, the first one introduces TAG Heuer connected watch in November 2015; the second one introduces the modular 45 watch in March 2017.
Great roundtable on June 29th on the Future of Luxury Retail in a digital world organized by Bettina Fröhlich (Luxe Partenaires) at Digital Luxury Meeting 2017: Avak Der Boghossian (Deloitte partner) introduced the market trends of digital experiential and personalization (Deloitte report Global Powers of Luxury Goods 2017,https://www2.deloitte.com/content/dam/Deloitte/global/Documents/consumer-industrial-products/gx-cip-global-powers-luxury-2017.pdf); Béatrice Querette (Merchanfeeling) provided insights from the field; Hortense Sauvard shared her perspective as a co-founder of OuiAreMakers.com.
Marie-Cécile Cervellon (EDHEC Business School) shared her research outlook on luxury etail and retail: The boundaries between retail and etail are blurred. The customer is the focal point of the omnichannel strategy. On one hand, online brands make their online presentations concrete, tangible and humanized through pictures of human models, zoom on details, 360 spin rotations, videos and the possibility to interact with human advisors. This strategy decreases the perceived risks associated to the online purchase. The chances to purchase online are multiplied by 1.5. The consumer is encouraged to pick up his purchase in the physical store (click&collect), creating traffic to the store and cross-selling opportunities. On the other hand, the digitalization (or phygitalization) of the point of sales is a major stake. From connected windows that allow purchases 24/7 to order and payment through mobile apps, the store becomes a replica of the e-boutique as much as the e-boutique becomes a replica of the physical store. Yet, in this digital world, let us NOT forget the BASICS… the reasons why clients go to the store: living an amazing in-store experience. Particularly the Millennials who will represent 40% of the personal luxury goods market by 2025, look for experiences that they can share. Unfortunately, 1/3 finds monotonous the experience in the store. Even more worrying, the service is bad, to extremely bad, in half of the visits. Our research shows that a young client activates a stereotype which makes him/her an unprofitable potential client and might lead to discriminatory treatments (Cervellon, Poujol and Tanner, 2017). Training to avoid stereotype-based behaviors is key.
What should the Luxury Store of the Future look like? Marie-Cécile said “A DESTINATION in the customer journey, a place for experimentation and a source of inspiration”.
Year after year, we discover that the most hesitant luxury brands embrace digital channels. They lead digital innovations in physical stores, through their e-boutiques or their mobile applications. The challenge, then, is to be heart selling without being perceived hard selling. Shade lights on luxury brands initiatives which, in your opinion, contribute to the brand dream value.
Featured picture: 3D immersive experience in Club Med Champs Elysées
In the coming days, we will be discussing Burberry’s digital strategy. You will provide arguments on the value of innovation to Burberry DNA. Also, you will give your point of view on Burberry’s digital transformation and adaptation to changing consumer demands in recent years. Last, you will reflect on the new challenges facing Burberry in the digital world and the actions which should be undertaken to sustain Burberry’s growth.
Watch the Youtube video of Angela Ahrendts as an introduction to Burberry strategy and the art of storytelling:
In November, we will be discussing the emergence of blogs in the luxury communication arsenal. Explain the phenomenon The Blonde Salad. Identify the opportunities and risks of these blogs for luxury brands. What make luxury blogs complementary to other digital communication tools?
Watch the CBS news on Chiara Ferragni business as well as the Youtube interview embedded below.
On October 14th, we will be discussing the Kering group digital strategy. Read the case and be prepared for discussion: What are the challenges faced by luxury brands when they engage in e-commerce activities? Evaluate the advantages and disadvantages of the different business models of e-commerce, including the most recent ones.
You will find interesting this link about the Kering Digital Academy at:
In June, McKinsey presented its latest research on Digital Luxury at FT Business of Luxury Summit in Monte-Carlo (see June post). McKinsey analyzed the omnichannel journey of 7,000 luxury consumers. Results confirm past studies: luxury shoppers are highly digital, mobile and present on social networks. Thus, the question is not anymore if luxury brands should be present online; Rather, how could luxury brands propose an omnichannel experience which matches the expectations of their demanding customers? In addition, McKinsey 2005 points to a very current concern discussed in class: On social media, does the luxury brand control its brand identity anymore? or is it co-created by the fans, with a risk of damaging the brand image? On average for each official luxury pic posted on Instagram, 10000 more containing the brand hashtag are generated by followers.
On June 5-7th, Monte-Carlo hosted the 11th FT Business of Luxury Summit, dealing with a hot topic in the industry : “Technology, Legacy and the New Consumer”. Issues discussed by top luxury managers encompassed: the changes in manufacturing processes due to new technologies, the orchestration of the luxury omnichannel experience, and the preservation of brand identity in a social media era. For those who could not attend the summit, the Financial Times shares videos on YouTube.
For further discussion, please have a look at this video “The Phy-gital Revolution: What is Luxury Doing Online to Woo its Consumers?” with Martin Bartle (Global Communications and Ecommerce Director, Agent Provocateur), Ulric Jerome (Partner & Chief Operating Officer, MATCHESFASHION.COM), Chris Morton (Founder & CEO, Lyst) and Nathalie Remy (Partner, McKinsey & Company) at: