Luxury group LVMH is upping its efforts in customer personalization, and it has recruited 50 international startups to help it do so.
At the Viva Technology innovation conference in Paris, which runs through July 2, LVMH is hosting its first Luxury Lab. The three-day showcase will feature the new digital technologies spearheaded by the startups in the form of both pitches and demonstrations. While the startups aren’t guaranteed investment from LVMH following the Luxury Lab, they’ll receive introductions to both LVMH-owned brands as well as the LVMH venture fund, Groupe Arnault.
“It’s very important for new companies to continue to form luxury in all shapes and sizes,” said Morty Singer, CEO of business development firm Marvin Traub Associates and co-founder of Orchard Mile, one of the companies participating in the Luxury Lab. “Luxury brands still perceive [e-commerce] as too readily available or ubiquitous. LVMH’s service explores the technology and innovation out there, and it’s a powerful initiative.”
LVMH’s chief digital officer Ian Rogers added that as digital technology transforms the luxury industry, “an essential part of this transformation is recognizing the importance of entrepreneurial initiative.” According to Rogers, the group believes each company represents the “future of luxury.”
To find its startups for the Luxury Lab, LVMH asked entrepreneurs how they were solving for “customer intimacy and personalization through stronger customer understanding.” The challenge captures a pain point relevant to retailers across the industry: cracking consumer data to provide a more personal, distinct experience that fosters customer loyalty.
The selected startups include both e-commerce platforms like Orchard Mile, Ordre, Swoonery and Auctionata, as well as tech companies like Tulip Retail, Cinématique and MemoMi.
Swoonery claims personalization is at the core of its e-commerce model for fine jewelry. Founded four months ago by Jean Poh, Swoonery’s goal is to remove obstacles within the luxury jewelry path to purchase by using an algorithm to learn customers’ individual preferences.
“The jewelry industry is one of the most difficult luxury categories for consumers to purchase online — it’s an even more antiquated industry than fashion,” said Poh. “LVMH has phenomenal jewelry brands, so the challenges that luxury jewelry brands face are theirs. They want to maintain the brand equity and luxury experience, but on the other hand, they have to think about new ways to continue to reach people online.”
Orchard Mile, another American startup to be featured at LVMH’s Luxury Lab showcase, sells entire seasonal luxury collections from designers in one place online. LVMH recognized Orchard Mile’s ability to let shoppers customize the collections they see first, either by brand/designer or product category.
“The Luxury Lab isn’t just about LVMH seeing what we have to offer, said Singer. “It’s about the camaraderie for startups in the luxury industry who have a similar goal in mind.”
LVMH, which saw its revenue hit $39.6 billion in 2015, an increase of 16 percent year over year, cited in its 2015 annual report that “differentiation, personalization and digitization” were its key priorities for 2016. For its part, LVMH-owned brands like Guerlain, Sephora, Tag Heuer and Kugo will present their personal digital initiatives during the conference, like Guerlain’s digital fragrance finder and Tag Heuer’s smartwatch. The company is also using new initiatives like Facebook Live and 360-degree video on both Facebook and YouTube to give looks inside its Luxury Lab on social media.
“As digital tech and media becomes more prevalent, the general tendency is to think that people using that technology are creating more distance between brands and experiences,” said Poh. “The future of luxury retail is going toward places and platforms that can leverage both market power and convenience.”
