LVMH, Digital Advertising & Strategy Case Study
It was a sign of the times when the luxury conglomerate LVMH appointed former Apple executive Ian Rogers as its new chief digital officer. His task: to foster the group’s digital innovation and explore new opportunities as the market showed an increase in eCommerce trends. And though an Apple executive without experience in the luxury world may have been an unconventional hire, if anything else, Rogers’ decades in the digital sector signals that the most recognizable luxury conglomerate was finally taking its digital strategy seriously.
LVMH’s Digital Transformation
At such an opportune moment, LVMH is poised to have a strong digital infrastructure for when it is estimated that a quarter of the global market value of personal luxury goods will be sold online—a trend that has accelerated in 2020. The move is a fortunate one for LVMH, who, like other luxury brands and conglomerates, had been resistant to the idea of embracing a digital extension. The hesitation stemmed from protecting the aura of exclusivity that luxury brands have spent time building and cannot risk losing, else jeopardize their wares’ perception and desirability. The skepticism surrounding the digital experience dissipated when it became clear it would not be optional for any brand to have an online strategy but completely necessary.
In that digital transformation, LVMH has found a footing that allows it to continue exuding the same qualities that make its brands the coveted names consumers flaunt. Of course, LVMH is known for its very close guard of its brands; you can only find an LVMH brand at one of their selected distributors. As such, the same philosophy has been applied to LVMH’s digital innovation. Its multi-brand eCommerce site, 24 Sèvres, features the group’s brands on an accessible online platform built on the sort of experience consumers can expect from Le Bon Marché.
Notable in 24 Sèvres is the availability of Parisian stylists for live, one-on-one video consultations. On the iOS app, consumers can chat with the brand’s stylists while browsing the store. In addition to the convenience of having a style professional at a shopper’s disposal, LVMH has also taken to Facebook to augment its customer experience on social media, as well. On Facebook specifically, shoppers can interact with 24 Sèvres’ Style Bot to make the most out of the shopping capabilities the social media platform has offered.
Then there’s LVMH’s inception of La Maisons des Startups accelerator program, in which dozens of startups are invited to innovate new products and services for LVMH’s fashion houses and the overall luxury market. Not to mention the conglomerate’s participation in Viva Technology, where it exhibits its LVMH Luxury Lab and Retail Lab, its internal organization established to help its Maisons develop the needed innovative solutions for both the digital and retail landscape. Such leaps in adopting both an online approach and an embrace for inventive ideas suggest LVMH aims to have an advantage over its competition as we embark further in the modern age of luxury consumer shopping.
In the advertising sense, LVMH can be described as more experiential than promotional. Through the use of augmented reality at Sephora stores, personable tasting experiences with Moët Hennessy, and an incredibly innovative use of a compact traveling boutique with Bvlgari’s Dream Machine, the level at which LVMH has invested in its advertising strategy is clearly defining of how the conglomerate values customer experience above all else. “It’s indicative of the group’s commitment to its customers and consumers everywhere,” says Juan Manuel Gonzalez, founder of UI/UX and luxury marketing agency G & Co., “that experience is quintessential to both the luxury world and in all of their Maisons.”
LVMH’s Customer Experience (CX)
Important to LVMH’s advertising strategy is customer experience. Granted, their investments in personalized interactions through their miniature boutiques and online services are certainly a mark that the luxury conglomerate acknowledges the strength in delivering a captivating experience.
But what sells that experience across all of LVMH’s Maisons is anticipating a customer’s need and providing them with all the components expected of in purchasing a luxury good. The other side of the equation in a luxury transaction is the very premise that goes with spending a considerable amount of money. As such, the experience has to justify the purchase, and it must, at the very least, fulfill consumer expectations, if not transcend them.
And while LVMH has done this exceedingly well with its brands in-person, it has now adapted to incorporate and accelerate the needed infrastructure to successfully provide a rewarding experience to consumers online. Part of why this has been a growing focus for the luxury conglomerate is not just because the market sees a growing segment of its sales coming online but because the luxury world sees more younger consumers as part of its customer base. Of course, this demographic lives and breathes online.
LVMH’s Advertising Strategy
Traditionally, the French luxury conglomerate largely committed its advertising and marketing strategy efforts on print media. However, LVMH has recognized that it has needed to evolve its targeting to the digital sphere because of the shifts in the luxury market demographic. The way LVMH and other luxury brands build brand awareness and customer engagement is through the digital touchpoints younger consumers dominate.
The strides LVMH has made in its digital strategy check the boxes off on the list to excite younger consumers. What they did was utilize the acclaim of style icons today. Celebrities like Pharrell Williams, Jennifer Lopez, and Billie Eilish brandish LVMH’s crown jewel, Louis Vuitton, whereas Lady Gaga, Dakota Johnson, and Natalie Portman have been seen sporting Celine.
Of course, one should not neglect the hiring of Virgil Abloh, CEO of Off-White as artistic director of men’s wear and the rehiring of Johnny Coca to creative director of accessories at Louis Vuitton, signaling not just a call to action from the brand in an effort to excite younger consumers. The pair’s appointment to head LVMH’s crown jewel brand also demonstrates just how more inclusive the world of luxury has become. In Virgil Abloh’s own words, his hiring by Louis Vuitton represented a moment in which he would define fashion rather than be defined by it. That moment also reflects the inclusivity and diversity of talent entering the luxury world.
In more commercial matters, LVMH struck a deal with Rihanna to create a new Maison in Fenty. The move marked the first of many for both Rihanna and LVMH: Rihanna became the first woman and the first woman of color to be added to the LVMH group with Fenty’s founding. Such an initiative gives way to the recognition of celebrity stardom and its influence on younger generations, and that there is a solid path in tapping the popularity in today’s celebrities that have just as much star power and influence as the style icons that brandished luxury items in the 20th century. That Fenty was called the first brand of the Instagram age to be supported by one of the three largest conglomerates that have defined the global luxury era only gives more credence to the rise of popularity that social media plays in LVMH’s marketing strategy.
Historically, luxury brands turned to magazine advertising horizons but were only so targeted—and ran thousands of dollars per a single page. Now, the accessibility of the online world has opened the luxury marketing strategy doors to more ways to reach consumers, most of whom fall exactly in line with the growing segment of the luxury market of younger shoppers.
It’s clear from LVMH’s marketing and advertising expenditures that the group knows this fact. In 2018, LVMH increased its total marketing spend to €5.6 billion to compose 12% of its group revenues. Half of Louis Vuitton’s marketing costs go to digital media, up significantly from the brand’s traditional use of print media as part of its marketing strategy. LVMH’s other Maisons, such as Christian Dior, Marc Jacobs, and Givenchy, made Tribe Dynamics’ top 10 brands in 2018—a mark earned for having demonstrated a high level of online savviness. As an advertising agency and a great enthusiast of LVMH’s recent push to embrace the digital world, we can only anticipate further breakthroughs in LVMH’s advertising strategy that lead the way in how luxury brands interact with today’s affluent consumers.
Furthering the experience
While Ian Rogers, the Apple executive turned chief digital officer at LVMH, is stepping down from his position, the luxury conglomerate has designated Louis Vuitton Vice President as its chief omnichannel officer. The move is one that cements LVMH’s conviction in enduring for the long run, both online and offline.
The intermittent store closures stressed the necessity of expanding the set of features LVMH employs in its digital approach. Such features include item availability information, click-and-collect ordering and payments, and even booking appointments to try on products in-store to subsist traffic. LVMH has taken note from Rogers and his coordination of online sales and marketing across the conglomerate’s 75 plus brands to further expand its online offers.
In addition to the acceleration of digital innovation at LVMH, recent months have demonstrated the conglomerate’s doubling down on retaining control of its Maisons. Speaking about the strategy for 24 Sèvres, LVMH chairman and chief executive Bernard Arnault said, “Ian [Rogers] has helped us integrate digital more deeply into our organizations with a sensitivity to the codes of luxury.” That sensitivity also includes holding true to the complex nature of the group itself. After all, LVMH should not be thought of as one company but as a composition of various Maisons consisting of fashion brands, spirits, and hospitality servicers and each with its unique personality. Not to mention, every brand in the LVMH portfolio has its own organizational structure and policy.
Now that the time has come to embrace a digital transformation and not just consider it a sideshow, LVMH is in the midst of implementing holistic online approaches for their brands, experimenting with what works before making substantial alterations to all of the group’s companies. One substantial benefit that does come with dozens of brands to oversee is the flexibility in testing what changes will be implemented. Small adaptions and utilizing a feedback loop from customers is one way that can confirm any of LVMH’s proof of concepts. For a conglomerate that houses a vast array of individual Maisons, LVMH is certainly approaching the realities of the digital age while staying true to the character of its brands. And that will be key in how their stories will unfold in the next few years.
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How much does LVMH spend on digital marketing and advertising?
LVMH spent approximately $7.67 billion on advertising and promotion in 2019.
What did LVMH do for a digital transformation?
LVMH took the initiative to launch 24 Sèvres, its multi-brand fashion eCommerce site, to boost its digital strategy. The group’s hiring of former Apple Music executive Ian Rogers fostered the site’s creation as a way to speed up LVMH’s digital transformation.
Although Rogers no longer works with LVMH, the group’s appointment of Michael David to the newly-created position of chief omnichannel officer shows the luxury conglomerate’s growing conviction of a digital strategy in the middle of a pandemic that’s prompted countless store closures and highlighted the importance of an eCommerce strategy. LVMH’s response to the disruption of in-person experiences was boosting its customer experience on the digital front, adding online support features such as item availability info, scheduling appointments to try on a product, and click-and-collect ordering and payments. Such improvements to LVMH’s digital strategy epitomize the group’s value of making the buying experience as convenient and rewarding as possible.
What is LVMH’s digital strategy?
Given that LVMH has seventy-five plus brands under it, each with their own personalities, the digital approach would have to be tailored to their Maisons. But if there is one thing that’s uniform in LVMH’s digital strategy, it would be expanding the usability and convenience factor of their Maison’s eCommerce sites.
Because LVMH is particularly cautious over its subsidiaries’ and very own brand image, one can make the case that the luxury conglomerate’s business model resembles that of the direct-to-consumer approach. By holding a tight hold of distribution channels, LVMH controls every aspect of their brands’ image and the customer relationship, which they can use to improve the existing customer dynamic through purchasing behavior and preference history. Through such accessibility, LVMH can iterate and deliver on what they identify their customers desire most. That solidly makes a case for why LVMH can gain the ground to create one of the most defining digital strategies in the luxury industry.
What is LVMH’s customer experience (CX)?
There’s no denying how sacred the customer experience is for LVMH. Perhaps their stressing about the customer experience is one reason why LVMH hesitated to emphasize digital channels: why focus on alternative mediums when luxury consumers can rely on the indelible experiences they are assured in physically visiting in-store locations where every interaction has been perfected? Of course, as much as in-store experiences will live on, they have no doubt been disrupted in the last few years, with eCommerce strategies taking on a whole new level of importance in the luxury industry.
In response to the consumer shifts, LVMH’s customer experience has extended beyond the magic of their in-store encounters. By translating the personalizing and rewarding elements of shopping online, LVMH has successfully exemplified the qualities of a luxury experience. As part of expanding the customer experience beyond traditional brick and mortar shopping, LVMH has invested heavily in catering to its consumers through an importance on convenience and accessibility. The group’s launch of the 24 Sèvres website and encompassing features such as having a stylist available for one-on-one video consultations and a chatbot geared to produce a personalized email after garnering individual style preferences show a wholehearted effort to deliver the single-best customer experience in luxury.
Who is LVMH’s target market/customer?
While there is no certain group one can attribute to LVMH and it’s collection of over seventy-five Maisons, there is a market the luxury conglomerate is targeting in its digital approach: those with a passion for the chic and effortless Parisian-inspired style, and is typically between the ages of 28 and 45.
What is luxury brand digital marketing, how is it different?
Because of the brand positioning, a luxury brand’s digital strategy will have to be different than any other brand’s in how it engages with customers, showcases its products, and communicates its value.
As an advertising agency and luxury marketing agency, we understand that instead of the push promotion strategy, luxury brands need to pull consumer interest through engaging and relevant content. How a luxury brand chooses to pull that interest is for them to choose.
Why is UI/UX important for luxury brand eCommerce stores?
There’s no question about it: a good user interface (UI) and user experience (UX) is essential for any eCommerce store in that it helps browsers easily navigate a website for the sole purpose of making their customer journey easier to finish. Any great digital agency will tell you an eCommerce store is a window into a brand’s image; the first impression a browser makes when coming across a shop can easily determine whether or not they will continue browsing and ultimately purchase something.
Why is eCommerce important for any luxury business?
In such a rapidly shifting consumer-driven world, it’s important now more than ever for brands to adapt to evolving consumer needs. And that includes meeting them where they are. As an advertising agency and luxury eCommerce agency, we know the value in a consumer-centric strategy to help luxury brands excel for the future.
It’s not enough for luxury brands to have a branded site and consider their eCommerce strategy complete. Consumers today want an experience that matches the quality of a luxury product they purchase. That’s why luxury brands must place a great emphasis on tailoring their approach to play on consumer sentiment and meet the mark of exclusivity.