PARIS — Kering is ramping up its digital initiatives aimed at improving customer service as it prepares to wind down its joint venture with the Yoox Net-a-porter Group (YNAP) and bring its e-commerce activities back in-house by 2020.
In his first interview since joining the French luxury group as chief client and digital officer a year ago, Grégory Boutté detailed the measures that brands including Gucci, Saint Laurent and Bottega Veneta are implementing to harness data and technology to achieve customer centricity.
With prior stints at eBay and several San Francisco-based start-ups, Boutté brought with him a healthy dose of Silicon Valley culture. Yet he insists that the terrain was already fertile, as Kering chairman and chief executive officer François-Henri Pinault has long integrated digital excellence into his vision of contemporary luxury.
“I’ll be honest: In joining the luxury industry, with no particular knowledge of the sector, I pictured an industry that wasn’t necessarily very open and very advanced, and what I’ve seen is rather the opposite,” Boutté told WWD. “I expected to have to do a lot of educating and convincing, and instead I found that everyone was ready.”
Indeed, he noted that Gucci was among the first brands to launch e-commerce in 2001 and is ranked the number-one luxury brand online, according to digital benchmarking firm Gartner L2’s annual “L2 Digital IQ Index: Fashion Global 2018” report, released in September.
“I see myself as someone with a slightly different skill set to what has traditionally been available in the group, and my mission is to accelerate these efforts and take them to the next level, in order to maintain Kering’s edge and competitiveness in this field,” Boutté said.
To that end he has launched a new customer service platform in Europe and the United States — with plans to expand to Asia next year — and is building a data and customer relationship management (CRM) unit in a bid to foster technology innovation to keep pace with a rapidly transforming retail landscape.
“One of my great ambitions is to create an exceptional experience for our customers when they buy online,” he said.
Kering’s online sales are on a fast-growth track, jumping by more than 80 percent in the third quarter, and representing a total of 6 percent of revenues at the group, which recently completed its transformation into a pure luxury player.
E-commerce is forecast to account for 25 percent of overall luxury sales by 2025, according to management consulting firm Bain & Company, yet Boutté maintained that Kering has no internal target for its own online sales, instead viewing them as part of a broader ecosystem.
“E-commerce is only a fraction of a more global experience that our customers have with our brands, and I’m concerned that if we set a target for e-commerce alone, we will lose sight of that,” he said.
“The relationship begins with the discovery of the brand universe and carries over to social networks, our e-commerce site, but also our stores, customer service relationship and communications, and my question at each point is: How can we use data and technology to give our customers the best possible experience?” he added.
That makes controlling each step of the selling process increasingly important – hence the decision to part ways with YNAP, which since May is fully owned by rival Swiss luxury conglomerate Compagnie Financière Richemont.
“We want to create a very luxurious and ultra-coherent experience across the various channels and tools used by our customers. That’s why we’ve decided today to bring this in-house,” Boutté said.
“Six years ago, when we created our joint venture, the luxury industry’s digital maturity was very low, so that is why we decided to partner with an expert,” he noted. “Today, we have a level of know-how that makes us very confident that internalizing our e-commerce platform is the right decision.”
To that end, Kering will have to develop new technical and logistical platforms, and redesign sites for each house, taking into account their identity and level of digital maturity.
Gucci remains the most visible brand across e-tailers, commanding the top spot in terms of first-page search visibility on Farfetch and Net-a-porter, Gartner L2 said in its report. It noted that in the last year, Gucci has increased visibility by 39 percentage points on Bloomingdale’s and by 21 percentage points on Nordstrom.
“Obviously, we will share best practices with Gucci in order to learn and take the best of what they have achieved,” Boutté said.
Kering is still studying how best to proceed in Asia, where countries such as China, South Korea and Japan each have highly developed — and individual — online markets. “We believe it will take a different shape than in Europe and the United States, but it’s still too early to say exactly what that will be,” Boutté said.
The group recently hired an e-commerce specialist in Hong Kong to oversee the transition, and plans to bring on additional staff in Shanghai to bolster the effort. At present, Saint Laurent and Alexander McQueen are present on JD.com’s Toplife platform, while Stella McCartney and Qeelin are available on rival Alibaba’s Luxury Pavilion.
“We have this image, and rightly so, of China as an extremely innovative and digital country, with highly varied ecosystems and explosive online sales. All of this is true. Having said that, luxury fashion e-commerce is still very much in its infancy today, which is why we’re willing to build a tailor-made approach for this ecosystem,” he said.
In the meantime, Kering is adopting a start-up-inspired “learning by doing” approach. Its brands now all have WeChat accounts and mini-programs that allow them to garner information about Chinese consumers.
Boutté noted that all of the group’s digital initiatives depend on close integration between brands, his teams and Kering’s technology unit, which is stacked with engineers. “I think that something very special happens when you establish a collaboration and you have three parties working hand-in-hand,” he said.
For instance, when Saint Laurent asked for ideas to enrich the selling ceremony in-store, Kering sent a small group of sales associates to Apple’s Enterprise Design Lab in Cupertino, Calif., to take part in a workshop with the technology giant from which they emerged with models for an app to be used on the shop floor.
The final product, developed by Kering’s technology division, was tested in some 20 Gucci, Saint Laurent and Bottega Veneta stores starting late last year, and has since been rolled out to two-thirds of the stores managed by the group’s three largest brands, where it is used by 6,500 sales associates every day.
It allows them to check stocks in real time without leaving the customer’s side, and order missing items from another store; offer complimentary products based on total looks developed by in-house stylists, and prepare a personalized selection of products based on previous purchases ahead of a store visit.
“The application has been tremendously successful with sales associates, it has generated great buzz and our ambition is to make all of our brands’ customers benefit from this enhanced experience,” Boutté said.
“It’s a good illustration both of the added value and the working methods we are trying to put in place,” he added, noting the rapid deployment of the app was comparable to what one might expect of a start-up.
The customer service division, meanwhile, sits in an office close by the group’s headquarters in central Paris, in order to promote communication with the various brands concerned.
Inquiries are fielded by phone, e-mail or chat, and call center agents have access to stock information, purchasing histories and after-sales services, with the aim of providing a tailor-made response. Gucci, Saint Laurent and Bottega Veneta have dedicated teams, while other brands share resources.
Furthermore, as part of his efforts to foster disruptive ideas that will shape the shopping experience of the future, Boutté recently recruited a blockchain expert.
“In the space of two months, we have created a pilot blockchain application which is not perfect, but which allows us to learn. Instead of reading research papers and making PowerPoint presentations, we are trying to develop digital tools and to see how we can use them for very narrow applications,” he explained.
“I’m trying to implement agile development modes, which are widely used in tech firms and start-ups, on a number of projects to complete the way the luxury industry traditionally works and bring the best of both worlds, and these projects are incredibly exciting,” Boutté said.
“The question is whether we can preempt what’s going to happen thanks to new technologies, and offer our customers experiences that will surprise them and take them beyond what we’re currently capable of doing,” he concluded.