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Inside 24 Sèvres, LVMH’s New Multi-Brand E-Commerce Play

LVMH chief digital officer Ian Rogers speaks to BoF’s Imran Amed about the strategy behind the conglomerate’s long-awaited return to multi-brand fashion e-commerce.
E-commerce site 24 Sévres | Source: Courtesy
By
  • Imran Amed
BoF PROFESSIONAL

PARIS, France — Since he joined LVMH as chief digital officer nearly two years ago, Ian Rogers has been quietly working away on the debut of the group's long-awaited return to multi-brand fashion e-commerce, eight years after the demise of San Francisco-based eLuxury, which closed in 2009.

The new venture — launched under the umbrella of LVMH-owned department store Le Bon Marché and dubbed 24 Sèvres, a reference to the store's Paris address — is set to debut in June, at a time when luxury e-commerce is growing fast. In the next 10 years, global consulting firm McKinsey & Company expects the share of luxury sales occurring online to triple, making e-commerce the world's third largest luxury market after China and the US.

But 24 Sèvres also faces a fashion e-commerce space that is increasingly crowded with competitors, from luxury incumbents like Neiman Marcus to traditional e-tailers like Yoox Net-a-Porter to platform players like Farfetch. And LVMH, the world’s largest luxury group, has an uneven track record online. While the company’s multi-brand beauty retailer Sephora generates strong online sales, Céline still lacks any kind of e-commerce presence at all.

Here, Rogers speaks to BoF’s Imran Amed about LVMH’s return to multi-brand fashion e-commerce, the thinking behind the launch of 24 Sèvres and how the move fits into LVMH’s broader digital strategy.

LVMH's chief digital officer Ian Rogers | Source: Courtesy

BoF: You arrived at LVMH somewhat under a cloak of secrecy. Was this multi-brand site one of the key things you were brought on to do?

IR: Yes, it was something that was part of the initial remit. And again, only part [of it]. At the time, [24 Sèvres’s chief executive] Eric Goguey was the only employee. As we were talking about this chief digital officer role they said, "We have this project, it has one employee, and we’d like for you to help us do it because it is start-up." Given my experience building start-ups — technology start-ups — and technology teams, I was excited to do it.

But 24 Sèvres isn’t the sole e-commerce strategy of LVMH either. Our goal is to have an e-commerce strategy that is from brand direct to consumer, in the boutiques phase with 24 Sèvres, and multi-brand with Sephora and DFS. Also, we have to have a marketplace strategy, whether it’s T-Mall or Farfetch. And then affiliates play a big role as well, whether it’s Google Shopping or a blog. As a brand, you have to have one strategy that really takes advantage of all of those ways the customer shops.

BoF: What’s it like building a technology start-up in Paris, a city not particularly well-known as a technology hub?

IR: You know it’s hard. This is my eighth start-up and it’s really top notch — and it’s in Paris! I’m really proud of the fact that we didn’t hire an agency, we didn’t hire some third-party technology, we’re not using Demandware, we’re not using Magento — we built it the way that I would build it if we were sitting in a Silicon Valley building, with a great Paris team. There are such good engineers in Paris but they all want to move to the US because that’s where the exciting projects are. So as it turns out, when you bring an exciting project to Paris, you actually have a really good opportunity to hire from a pretty good talent pool.

BoF: I was puzzled by the decision to call the new business "24 Sèvres" because that means building a new brand, whereas Le Bon Marché is already a globally recognised brand. Why start from scratch?

IR: We were looking for something that was distinct worldwide that is linked to Le Bon Marché. I like that it has 24 in it because we’re bringing Le Bon Marché, which is open roughly 12 hours a day, but now open to the world for 24 hours a day. It’s French. It’s already the name of our loyalty programme. It’s something that is distinct and something that we can really own worldwide. I like this idea of taking the physical address of Le Bon Marché and making it an international address. And, practically, it’s a marque we can own.

BoF: The luxury e-commerce space is already really competitive with long-established players like Farfetch, Net-a-Porter, Neiman Marcus and MatchesFashion.com. What is it that is going to differentiate 24 Sèvres in the space? What will give it an edge?

Following the market numbers is really interesting and exciting. Obviously it’s a big market; I think it was the Bain [& Company] study this year that said that luxury e-commerce is the third [biggest] market if you were to size it up among geographical markets, behind the US and Japan, at $19 billion. The McKinsey study a couple of years ago said that it’d be trending to $70 billion. So, if you look, "Where is the double-digit growth? Where is the 30 percent plus growth?" — it’s in the e-commerce channel.

When you see what’s happening in China, your jaw is on the floor. China has twice as many internet users as the US has people. They did $80 billion in one single day on Alibaba last year, which is effectively two LVMHs in a single day. Obviously Alibaba isn’t luxury, but when you look at customer habits, the Chinese are such an important customer for luxury; you look at their level of comfort in buying e-commerce, and you can definitely see that e-commerce is the future engine of the business because it’s the most accessible form of commerce.

Now to answer your question about what's the differentiator for 24 Sèvres. There are three things.

The first is selection. The value we can offer internationally is that Paris is unrepresented in the fashion e-commerce landscape right now. With everyone you just mentioned — in London and New York and Italy — but Paris is [also] an important take on fashion. It has an important sense of style. It’s about bringing that to the world as people are looking for curators and looking for style and taste, that selection is important. [We will also have] brands that no one else has like Vuitton and Dior, and products too. And that’s really what you’ll see when we launch. Of the 150 plus brands that we have, we’ve had almost 70 of them create exclusive products for our launch. That’s the first differentiator.

The value we can offer internationally is that Paris is unrepresented in the fashion e-commerce landscape right now.

The second thing is merchandising. The internet has moved on to become a visual medium. What are people consuming on the internet? They’re consuming images and videos, and the growth of that when you look at the numbers is exponential, even just over the last three years. Instagram, Facebook, Snapchat: what people are consuming everyday is visual.

We looked at what LVMH is good at, talking to Faye McLeod about what she does with the studio for Vuitton and Dior and visual merchandising as an art form. How can we bring that online? We’re trying to take this kind of art of visual merchandising and I think people dream and desire with windows. I think this is what a boutique needs to do. Why do people come to a boutique? To find something you didn’t know you wanted. You want to see what’s new, what’s hot. You want to see something beautiful. If you knew exactly what you wanted, you might go to a marketplace or brand site or Google. But you come to a boutique to be inspired.

The third part is service. Service is something everybody is competing on. Obviously everybody wants to get to the product faster. It’s hard to bring Le Bon Marché to your home, but we’ve really done our best to make it something special when you order. We’re doing overnight delivery to more than 70 countries on day one, and then we’re trying to innovate as well with our video chat stylists.

I love the notion that 20 years ago it would have seemed absurd that you could sit in Chicago and chat with a Parisian stylist, if that fit is your style and that’s the kind of advice you’d like to get. It’s not just video chat like with FaceTime, it’s actually in the app. You can browse the app while you’re talking to the stylist. They can point to products on the screen, highlight areas, and say, "Check this out, let me draw a red circle around this brand for you, what do you think about this?"

It’s not just how fast can you get the product; it’s the kind of service that you get when you walk into one of our retail stores. If e-commerce or digital is successful, it’s not just about moving money from the offline pocket to the online pocket, you’re actually reaching people who you couldn’t reach before and connecting with them in a deeper way and a more long-term way. Building a relationship with them that’s a relationship of trust. Luxury has the ability to do that.

BoF: One thing you didn’t mention just now was the role of the physical store. If you think about Le Bon Marché, and you think about the network of Vuitton or Dior stores, to what extent will this be an omnichannel play? How does the store fit into the experience that 24 Sèvres is offering?

IR: The future is very clear. We go to a store to get something we can’t get online, and when you look at the future of retail, Le Bon Marché checks all the boxes. It’s experiential, you can go there and get a meal or a coffee, you can buy a vinyl or see art. During the holidays I took my daughter there to see acrobats. It delivers something that you absolutely cannot get with e-commerce, which is what I think retail — physical retail — needs to try and do in the future.

The big differentiators are, again, selection, merchandising and service. Le Bon Marché is just one store in one city. We do want to super-serve that Parisian customer. Le Bon Marché is a very successful business endeavour. It’s an institution. Leveraging that for the Parisian customer is something we want to do. It’s tied to the 24 Sèvres loyalty programme, which is incredibly successful, and we do have click-and-collect which has a really prominent area on the first floor.

For the Parisian customer, making 24 Sèvres the omnichannel tool for Le Bon Marché is really key. We’ll keep it tied to Le Bon Marché and 24 Sèvres. You mentioned Vuitton and Dior, they will have their own direct-to-consumer omnichannel play. It’s not necessarily tied to 24 Sèvres.

BoF: Some other LVMH brands — Louis Vuitton, Céline and Dior in particular — have been much more restricted in terms of their e-commerce presence. They’re very protective of their brands. How will you maintain their brand integrity in this multi-brand environment which they’ve been resisting up until now?

IR: All three of those brands are being really aggressive in terms of what they’re doing online. The things you can say about all three: Vuitton’s business is fantastic and growing. They have a great team and they’re constantly expanding. Dior has been doing the same. They’ve added more countries since I’ve joined the group and they’re doing some really aggressive things, particularly in Asia. If you look at what they did on WeChat last year, it was incredibly successful.

The only thing we’ve said about Céline so far is that they will do e-commerce this year. Obviously that’s a huge step. They started with an Instagram account and they’re starting to appear there.

We looked at visual merchandising as an art form. How can we bring that online?

So how do you protect these brands in the multi-brand environment? It’s close to what they already do in store. You walk into Le Bon Marché or Bloomingdales, you have Vuitton and Dior, but they are merchandised by Vuitton and Dior. They’re a shop within a shop. Vuitton in Le Bon Marché is not the same selection as Vuitton on the Champs Elysées. But it’s appropriate for the Le Bon Marché customer. What we will do with 24 Sèvres is exactly that.

Since a boutique has an edit, by definition our goal is not to take everything that’s on Louisvuitton.com and put it on this other site. It’s pointless to do that. It’s more about what’s the right edit for this customer? How do we contextualise it so that the customer who just came to be inspired can be inspired by Vuitton or Dior, and that those products aren’t left out of their consideration set when they’re thinking about their next purchase?

In a lot of ways, the multi-brand opportunity is almost a media opportunity. It’s not just about a bunch of products in a grid and the lowest price. It’s about getting people to see something that they wouldn't have seen otherwise and to look at it from a different angle, to look at it in the context of a style. I think the opportunity to do that with these other brands that are at an arm's length from e-commerce is really exciting. It opens up a new realm of possibilities for both the multi-brand site and the brand.

BoF: To be able to deliver overnight delivery in more than 70 countries on the day of launch is no small undertaking. How have you managed to do that so quickly? Has it been through leveraging the existing LVMH infrastructure? Have you built it from scratch?

IR: It’s relatively modest. Even though we’re shipping worldwide, we’re shipping from France. Software comes into it, [so that] we get the pricing right in every country and that we get the tariffs right in every country. So it’s the software infrastructure where we’ve focused for starters, which is also where Farfetch is focused as well, finding software solutions for those problems.

The end infrastructure challenge is huge because when you think about the ordering process, the shooting, getting the product on the site and getting it merchandised, to shipping and returns, very few people appreciate the difficulty of that task. That’s where the companies you mentioned previously have done so well. What they’ve built is very defensible because they solved a lot of very hard problems in the process.

For somebody as big as LVMH, it’s certainly a skill that we have to have. We do have it — obviously we have massive logistics networks that are geared to do different things, but bringing those to accomplish this task is work. But it’s work that has to be done. Like I said earlier, e-commerce is going to become the base level, most accessible form of retail for us. It’s got to be a key skill. You just have to be good at it and do the work to be excellent at serving that market.

The multi-brand opportunity is a media opportunity. It's about getting people to see something that they wouldn't have seen otherwise.

BoF: You’ve come from the music industry, with all this experience in technology. What’s going to be the biggest challenge in making 24 Sèvres a success?

IR: For this specific opportunity, what you’re really trying to do is to succeed as a boutique and half of that is going to be just bringing an audience to the boutique week after week, month after month. It’s no different that the same challenge at Le Bon Marché . You bring people to the store day after day, week after week because you have something really distinct. The challenge is just in really having something that is truly distinct in the market that the customer wants to come to [regularly]. In that way, it becomes a content challenge. You have to have the product, but you also have to merchandise the product in a way that brings people back because you’re an indispensable part of their life. I think that’s the biggest challenge.

BoF: Finally, why has it taken LVMH so long to go after this opportunity?

In terms of why LVMH hasn’t gone there sooner, I think the answer is that they did, and it was tough. "Once bitten, twice shy" really applies here, and they wanted to be sure that if they re-entered this race, that they did it in the right way. Alexandre [Arnault] was really key to that and said, "Listen, I think I know what this looks like, I think I know how we need to do this." I think that having his vision there allowed the group to make this leap again.

Disclosure: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholder’s documentation guaranteeing BoF’s complete editorial independence.

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