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? How does the store fit into this 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.