Can Lu Wei Ming Xuan Succeed In Pushing Digital Innovation?

According to the world clothing shoes and hats net, since its establishment,

LVMH always leads the trend of great change.

As the first to set foot in China

Of

The company, Lu Wei Ming Xuan, first opened Louis Vuitton in The Peninsula Beijing Hotel at the beginning of the 1992 consumer boom.

But the world's largest luxury group has been slow to respond to one of the most disruptive changes to date: digitalization.

Some people say that, like many luxury companies, Lu Wei Ming Xuan is worried about the trend of democratization driven by the Internet and the brand that fails to control its intensive farming effectively, wasting valuable time in the way of display and distribution.

Others believe that the time for Lu Wei Ming to enter the electricity supplier is too early: as early as 2000, the group launched a multi brand fashion retailing website, eluxury.com, but at that time, the online sales of luxury goods had not yet reached the level of maintaining the website operation.

This venture is not only strategically miscalculated, but also insufficient in execution. As an early attempt, it also faced great challenges and ended in failure in 2009.

In the next few years, competitors are striding forward, and Lu Wei Hun Xuan is more careful in digitization.

There is another important factor, as Harvard Business School professor Clayton Christensen put forward in his book The Innovator s Dilemma: successful large enterprises often do not adopt new technologies or business models that can create future advantages, because they need to focus on the huge benefits of the moment.

Although Lu Wei Hun Xuan is not the elites of electric business, the retail impressions offered by its luxury brand shops are second to none in the world.

Over the years, Lu Wei Ming Xuan's online sales performance is not very stable.

Although LVMH's multi brand beauty retailer (Sephora) has adopted more advanced digitalization methods to greatly boost the sales of electricity suppliers, Louis Vuitton has also succeeded in the development of digital capabilities (although it is still prudent to balance online sales). The other brands of the group basically can not talk about any digital strategy.

Until three years ago, as we gradually realized that digitalization would be a great opportunity to tap the Chinese market, Lu Wei Hun Xuan finally decided to develop digital capabilities as the top priority of the group.

"Occupying heights is critical to luxury digital business," explains Luca Solca, director of luxury goods division at Exane BNP Paribas, Paris. "Over 90% of today's shopping behavior is affected by digitalization. The industry expects that the growth rate of e-commerce business will accelerate significantly in the next few years."

About two and a half years ago, Lu Wei Mo Xuan invited Ian Rogers to take up the post of "chief digital officer".

This gives rise to signals of ideological change.

Bernard Arnault's son, Rimowa CEO Alexandre Arnault, together with Rogers, let LVMH start to focus on digital business and work closely with the Executive Committee of the group.

Since then, the LVMH group has strengthened the functions of digital professional staff, launched and launched the 24 S vres, which has long awaited the industry, and announced a strong return to the multi brand fashion business market.

"The group is not only committed to digitalization in the field of electricity supplier, but also to digitalization to improve internal management and communication," said Bernard Arnault, chairman and chief executive officer, speaking at the annual meeting of Lu Wei in Paris in.

Earlier, LVMH announced its strong performance in the first quarter, and organic sales grew by 13%, pushing the stock price to a record high.

In 2017, online sales increased by 30%.

Group Antonio Belloni, general manager of the group, said that the group is increasing digital investment, including media expenditure, accounting for 30%, and is used for building a number of digital platforms.

Despite his excellent performance, Arnault cautioned: "in my opinion, the more gratifying you get, the more attention you need to pay attention to and remain vigilant and vigilant," he said. "Experience shows that nothing is easier to beat down a successful business than complacency."

He cited risk factors such as stock market turbulence and geopolitical instability.

But Lu Wei Mo Xuan seems to have gradually realized that in order to avoid being subverted fate, we must self subversion.

"We can not be subverted, although we are soberly aware that all forms of" subversion "exist in the fields of design, products, public relations, communications and distribution.

So we need to focus on the most significant changes and embrace these changes early, "Alexandre Arnault said last year in an interview with reporters." we should continue to be at the forefront of innovation. "

Earlier this week, Bernard Arnault and other daughters of Delphine and Rogers and other top executives attended the unveiling ceremony of La Maison des Startups (meaning "startups").

The project is headquartered in Station F, a start-up technology business incubator in Paris. It aims to stimulate the innovation vitality of start-ups and serve the brand matrix.

La Maison des Startups is also an extension of LVMH Innovation Award, which was jointly built by Rogers and Alexandre Arnault two years ago. It aims to help the normalization of the specialized dialogue between LVMH and start-ups and help group innovation.

La Maison des Startups, which was launched in November last year, covers enterprises in all fields, ranging from AI to block chains.

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But is Lu Wei Ming Xuan's attempt to promote digital innovation succeed?

Business incubators are not always effective.

From Nordstrom (Nordstrom) to L'OREAL's L Or Al, many industry companies have tried before.

Although the top executives tend to be very concerned about these projects, there is no shortage of attention and capital, but most of the projects are no longer successful, and it is difficult to achieve the goal of strategic innovation.

Volkswagen, Coca-Cola and other enterprises have shut down the accelerator project.

Recently, S vres, the 24 most popular digital platform, is the first and the only online selling C e line multi brand e-commerce website. This really highlights the group's main competitive advantage, that is, the scarcity of online sales and the brand of Lu Wei Ming Xuan.

But this action obviously needs more follow-up actions to improve it.

Although LVMH does not disclose the performance of 24 S vres, the industry generally believes that its scale of business is far less competitive than that of Yoox Net-a-Porter, Farfetch and MatchesFashion.com.

Lu Wei MOH Xuan also holds another trump card, which is a large network of stores that is widely distributed.

This resource will help build a world-class, integrated entity and digital retail customer experience platform in the future.

Solca points out that when IT supports the full integration of digital and physical retail businesses, the "Big Bang" growth should not be far away.

Perhaps this is far from enough.

In addition to the 24 S vres and the new incubator project, Lu Wei Ming Xuan will continue to deepen the reform of corporate culture, truly overcome Christensen's "innovator's dilemma", and shift the focus of group resources and talents to digital innovation, just as it caught the Chinese market in 1990s.

The group is making decisions that affect the return to digitalization every day.

If Lu Wei Hun hopes to achieve self subversion, the group's talent plan, incentives and core processes must support this change.

The future is here.

Interest related: LVMH group is one of the many investors of The Business of Fashion and holds a minority stake in BoF.

All investors have signed relevant shareholders' documents to ensure the independence of editors.

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