Last week, Snap Inc hosted the latest iteration of the B&T Breakfast Club. Here we unveil the speech delivered by Louis Vuitton Australia’s non-executive director Philip Corne, who’s also the non-executive chairman of Cure Cancer Australia.
Since joining Louis Vuitton Australia in 1988 as head of finance, Corne has held a number of senior leadership positions within the LVMH Group, leading all aspects of business, including strategic planning, property, marketing and client engagement, supply chain and logistics, information technology and people. The below is an edited transcript of his speech ‘Retail marketing, how it’s changing and what you can do to stay ahead of the curve’.
Given my background, I will obviously be addressing this topic from a luxury market perspective, but I think this is one that applies equally to many products and sectors.
I am often asked “post GFC – which seems a long time ago but in my view the consequences of which is still very much with us – what has the impact of the GFC been on the luxury goods market – the assumption being that the implications will have been quite negative.
The opposite has in fact been the case – for the 2008 Financial Year LVMH reported sales of 17.1 Billion Euro and profit of 2.3 Billion Euro compared to 2017 results of 42.6 Billion Euro in sales and Profit 5.1 Billion Euro and YTD June revenue is up 10% and net profit plus 40%
At LVMH and in particular Louis Vuitton – you have a chairman, major shareholder, and company that is never satisfied – if 3 words are spoken – innovation and creativity are 2 of them – the drive for growth is relentless.
At the same time you are entrusted with the management of brands with the challenging and competing objective of at all times maintaining and building on the position and image of the brand and delivering growth and profitability via the mantra or constant innovation and creativity.
What we have seen since 2008 is a polarisation of the market – with the same consumer looking to the value end of the market for the basics of life and moving to the premium/luxury sector for important purchases – the underlying sentiment being to “have fewer items but better that last longer”.
The risk therefore is – to be a brand that is in the middle with no real point of difference – and it is here that we are currently seeing a lot of pain.
The consumer today – unlike the past – has the power of information at their finger-tips.
The world can be shopped from anywhere any time.
In my mind however – what has always been true remains the true
It starts with your product – is it genuine – does it have a clear point of difference – does it have a market – can it be priced effectively into that market – are margins sufficient to produce an appropriate return – is the business scalable – the need to embrace relentless attention to detail and who is your competition both existing and potential?
An added complexity is that having the best product is not enough.
Assuming all the boxes above can be ticked then the questions remain:
- What is the brand story and how to tell it?
- Is it genuine?
- Can it stand the test of time?
- How to communicate to your current and potential client?
- When has this ever been different?
The mode of delivery may have changed but the objective and message remain the same.
I hear much about luxury – an easily used word – apparently now you can purchase luxury toilet paper – computers etc.
I hear that personalisation is luxury, surprise and delight is luxury, client experience is luxury, scarcity is luxury – maybe.
In my view the currency of luxury today is trust – trust in product, providence, sustainability, retail environment and trust in the fact that relationship takes precedence over transaction – understanding that if the relationship is established the transaction will follow and trust must be consistently maintained over time.
In terms of marketing therefore regardless of the method of delivery the brands that in my view will win are those that understand these basics and have at the centre of all they do an obsession with having the client as the reason for their existence.
Above all the obsession with client needs to be a company wide culture and not rest with any particular individual or department.