PARIS — On the opening day of the Viva Technology conference in Paris, it was easy to keep track of the whereabouts of French President Emmanuel Macron: all you had to do was follow the dozens of outstretched hands brandishing cell phones.
Across the room, an equally powerful man did the rounds with a discreet cadre of bodyguards keeping watch. Bernard Arnault, chairman and chief executive officer of LVMH Moët Hennessy Louis Vuitton and France’s richest man, met with representatives of some of the 32 start-ups vying for the inaugural LVMH Innovation Award.
Standing among a throng of visitors at the LVMH Lab stand on Thursday, the luxury titan listened attentively as the makers of Biowatch explained how their watch module could be used to authenticate online payments, open car doors or log into electronic accounts using the unique pattern of your veins.
Among the other innovations were Mode.ai, a chatbot for fashion, or Fitskin, an application that allows users to find the right cosmetics color shades for their skin tone. The prize finalists shared the space with LVMH brands including luxury men’s wear brand Berluti, Champagne house Ruinart and beauty retailer Sephora.
Berluti displayed a new tool that allows customers to simulate different customization choices on a pair of shoes, while Ruinart invited attendees to step into a curtained booth to show how it will use videomapping to enhance V.I.P. tastings at its historic headquarters in Reims.
When Macron arrived at the stand, Arnault introduced him to Rachel Marouani, ceo of jeweler Fred, who demonstrated its new customization concept geared around its signature Force 10 bracelet, as well as Ian Rogers, chief digital officer of LVMH, who has been spearheading innovation at the group, including the recent launch of its online retail platform 24Sevres.com.
Macron is reportedly close to entrepreneur and tech billionaire Xavier Niel, partner of Delphine Arnault, executive vice president of Louis Vuitton and daughter of Bernard Arnault. The first lady, Brigitte Trogneux, has worn Louis Vuitton for key events including Macron’s inauguration in May.
A strong supporter of new technologies, the French president later tweeted in English: “I want France to be a start-up nation. A nation that thinks and moves like a start-up.”
As it turns out, Arnault wants to promote the same spirit within LVMH, whose roster of brands includes Louis Vuitton, Fendi, Guerlain, Moët & Chandon, Bulgari and Tag Heuer.
The conglomerate’s media arm, Groupe Les Echos, is the joint organizer of Viva Technology, now in its second edition, and aims to turn it into a leading global event, with speakers this year including Eric Schmidt, executive chairman of Alphabet Inc.; Daniel Zhang, ceo of Alibaba Group, and David Kenny, senior vice president of IBM Watson and IBM Cloud, among others.
It has gathered a jury of industry heavy-hitters for the LVMH Innovation Award, due to be handed out on Friday. Joining Arnault will be executives including Angela Ahrendts, senior vice president of retail at Apple Inc.; Natalie Massenet, cofounder of venture capital firm Imaginary Ventures, and Alexandre Arnault, co-ceo of German luggage-maker Rimowa.
In an exclusive interview, Arnault spoke to WWD about the need to be nimble, providing a platform for innovators, and why he thinks computers will never replace stores.
WWD: Ian Rogers has said retail is going through the same kind of revolution that the music sector experienced 15 or 20 years ago. Do you share his analysis?
Bernard Arnault: What I am observing is that a lot of sales today go through the digital channel. If I take the example of Sephora within our group, when I bought the company in the late Nineties, it was a start-up. It has since become the worldwide leader in the sale of beauty products and is also the number-one [beauty] retailer online in several countries, including the U.S. So it’s true that since the end of the Nineties, the phenomenon of digitally aided sales, whether they happen directly online or whether they are concluded in-store, has increased a lot. That is a change that has happened in the last 15 years.
WWD: It used to be common wisdom that luxury was different, and that what worked for a mass product like lipstick could never work for a Louis Vuitton handbag. You recently launched your own multibrand e-commerce site, 24Sevres.com. What is your ambition for the site?
B.A.: We want to offer a service for luxury brands. I believe it will never replace a more direct contact with the product and visiting the store, which offers the possibility not only of seeing the product, touching it, trying it on, but also a fun experience that you don’t get when you are just looking at a screen on Internet. What we hope to achieve through this sales channel is to offer a service that meets the requirements of people today, in particular our younger customers. When they hear about a product, their immediate reaction is to seek it out online — it’s not necessarily to go look in a store or a magazine. One of the consequences of this is that paid advertising in magazines is going down in favor of all these forms of digital communication. It’s part of a huge evolution that will necessarily have an impact today on all the products sold by the brands belonging to our group.
WWD: When you announced the launch of the site, people said LVMH was going head-to-head with pure online players like Yoox Net-a-porter. Was that the intention, or was it rather to exercise greater control over the online sales environment for your luxury brands and the other brands carried by Le Bon Marché?
B.A.: Le Bon Marché is probably the oldest brand in mail-order sales. When it was founded, it was the first place, perhaps anywhere in the world, to also offer mail-order sales. You had warehouses in the 19th century that would send out products. They didn’t have Internet, it was completely different, but for Le Bon Marché, this is in a sense a return to its roots.
WWD: What are you hoping to foster by creating the LVMH Innovation Award?
B.A.: LVMH has always been very interested and very involved in digital innovation. I mentioned Sephora earlier: if you go to the Sephora offices in San Francisco, I think you will find one of the best digital teams in the world in terms of innovation. Just now, for instance, I saw on one of the stands some very interesting innovations where you can choose the color of a lipstick and see immediately using your mobile phone what it looks like on you, and so forth. So we have been very strongly involved with all these innovations for a long time. [Groupe Arnault] also invested in various start-ups in the Nineties. Some of them did well and others didn’t, but that is the lot of all start-ups. [Now we are involved with] this event, which is unique in the world because it connects start-ups with large groups. Personally, I think this is the way of the future, because it provides them with resources and puts them in touch with teams that can help them and make them gain a lot of time. At the end of the day, the aim of a start-up is not to remain a start-up. The aim of a start-up is to become a big company, so by being in contact with large companies, they stand to benefit from coaching and possibly even financing, if the projects are of interest, which allows them to speed up the process. On our side, it allows us to be in touch with all kinds of innovations and young entrepreneurs. That is something I have always been excited about, and that’s the reason why Ian joined us.
WWD: Is it difficult to communicate with start-ups, because their culture is so different from that of a large conglomerate like yours?
B.A.: Not really. We are a group that brings together 70 houses that are relatively independent and that practically all began as start-ups. Among these 70, we have some that are still in the start-up phase, so we try to preserve that culture. Because what is the definition of start-up? What is the advantage of a start-up? Firstly, it has creative ideas that set it apart from its competitors. That’s what makes a difference. You have [Mark] Zuckerberg, when he launched Facebook, and Evan Spiegel, when he launched Snapchat, who both stood out from the competition. So there has to be an innovation. Secondly, to succeed, it needs a great capacity for execution. That is what we’re trying to do: to keep the agility of a start-up while ensuring a quality of execution that is vital and essential to the success of our projects. This is especially true for start-ups. The creative aspect is important, but there are lots of ideas floating around. When Facebook started out, there were several other start-ups doing the same thing. Why did it work for them? Because the execution was perfect, so that execution allowed Facebook’s business to thrive, to make money, while the others who had set out with similar ideas did not execute them well and it didn’t work.
WWD: Can the finalists of the LVMH Innovation Prize expect to work with the group in any capacity?
B.A.: That depends. But this is already an opportunity for them to benefit from the publicity surrounding the event and from the people who come here, including potential customers and investors. It allows them to meet a lot of people.