LVMH looks to transform selling luxury into an online experience
LVMH’s chief digital officer, Ian Rogers, has a major challenge ahead of him: translating the in-store luxury shopping experience into a similarly attractive online one. Rogers joined LVMH – a company that counts big names like Christian Dior, Louis Vuitton, and Givenchy amongst its brands – 2 years ago, after a long stint in the music industry. Over 21 years he helped to transform the way people access music into a seamless online experience: LVMH is hoping he can do something similar with luxury retail.
LVMH’s share price is up 53% over the last 12 months
SOURCE: Yahoo Finance
Rogers has spent the past few months working on a top-secret project, codenamed Babylon, which aims to accomplish this difficult goal. Yesterday, the first fruits of this labour emerged online: 24 Sèvres, an online version of the high-end luxury store Le Bon Marché, which has a 180 year history in the industry. Le Bon Marché is owned outright by LVMH, so its online version will be the only multi-brand Ecommerce site where some of the company’s exclusive brands – like Dior and Vuitton – will be available. Alongside many non-LVMH brands, of course.
Rogers’ entrance into LVMH is indicative of a belief at the luxury powerhouse that the $1.2 trillion industry of which it is a part is ripe for a major disruption. At present, 98% of luxury purchases are still in brick-and-mortar stores, and 40% of luxury brands have no Ecommerce offering at all. However, between 2003 and 2016, luxury sales online increased 20 times. In 2016 alone, online luxury sales went up by 13%, while the rest of the luxury market only increased by 4%. This could be indicative of a major change.
According to Rogers: “Retail is about to change fundamentally, in much the same way that music has changed. The way that music is discovered and consumed is 100% different than it was 20 years ago. Retail is about to go through the same thing.”
If he’s correct, Rogers is the right man for the job. His tenure in the music industry spanned the transition from CD to MP3 to online streaming services. Can he replicate the success he had in that industry in the luxury industry?
Dominion holds LVMH in its Global Trends Luxury Fund.
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