Luxury retail, where tradition meets innovation

RETALES, from retailers to retailers, with Laetitia Roche-Grenet | Episode 5

In this episode of RETALES, we discuss luxury retail with Laetitia Roche-Grenet, Open Innovation Director at LVMH, world leader in high-quality products, including brands such as Louis Vuitton, Dior and Givenchy. With more than 20 years at the forefront of this industry, our guest shares with us how luxury works and how it preserves its distinctive savoir-faire while being innovative in an ever-changing world.

“Luxury retail is about excellence and by excellence we mean attention to details”, she says while explaining what makes this industry so special. That’s why personalization of the customer experience in luxury retail reaches another dimension. Each customer must be made to feel unique and exclusive.

Speaking of the specificities of luxury, our guest also highlights the complexity of finding a middle ground between tradition and innovation, the past and the present. “The particularity of luxury is heritage, it’s tradition. So the whole challenge is really to find the right balance between how to keep tradition and modernity at the same time”, says Laetitia.

And it is the reason for building the Open Innovation department at LVMH, which she leads: “It’s a new ecosystem where the Maisons [referring to the different brands] of the group can find innovation”. La Maison des Startups [The House of Startups], of which Orquest is a member, is one of its initiatives. “It’s an accelerator program”, she explains, “based in Station F”, the world’s largest innovation campus located in Paris.

We also discussed on the podcast the high standards and level of expectation of customer service in luxury retail. “I think that for a customer experience to be at an excellent level, […] you need to have an impeccable backoffice”, states Laetitia. By backoffice she means the workforce management of the stores, where all the magic happens, and “it has to be invisible”, she adds, referring to tech solutions.

Innovation and technology are also a big part of luxury. While talking about the future and building tomorrow’s luxury retail, Laetitia says, “we do believe that it happens by combining cutting edge innovation and also centuries of savoir-faire”.

Listen to the entire conversation to discover more insights from Laetitia Roche-Grenet on where luxury retail is heading and what we can learn from it. A transcript of the entire episode is also available below. And don’t forget to subscribe and share this episode of RETALES, from retailers to retailers.

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ADARA
Bueno, bueno, bueno… Hello to our listeners. We’re back with a new episode of retails from retailers to retailers, the podcast that digs deep into the challenges, opportunities and trends of today’s retail sector. I am Adara Gonzalez CRO at Orquest and this time we’re going to talk about luxury retail. I am very happy and excited about welcoming today’s guest. She has more than 20 years of experience in this industry and is currently the Open Innovation Director at LVMH. We’re really there in luxury. Laetitia Roche-Grenet, bienvenue.

LAETITIA
Thank you very much for inviting me. I’m ah delighted to be here today.

ADARA
It’s a real pleasure to have you on the podcast. Let’s just start with some context, what is luxury retail and how is it different from the rest of the industry?

LAETITIA
Um, I would say that there are many differences but probably the most important one is that luxury retail is about excellence and by excellence we mean attention to details. You know when you look for perfection. When you look at a beautiful piece of jewelry for instance. All the details matter and I think that is really the big difference and we can talk about it for the product but also for the service that goes with the purchase of the product. And of course we are in a world where we always talk about tests and learning, trial and error which is in a way fine and important but then of course the difficulty can lie in how you reach excellence at the same time. I think that, both the excellence that is of course the most important part. I would say that something that sets us apart from the rest and other brands is probably our heritage. Some of our maisons are more than 100 years old, they have his history…they have. And all of this is a unique heritage. I mean my job is to work on Innovation. So. It’s always a challenge because we have to of course keep our unique heritage and history intact and most beautiful every time.

ADARA
Um, fascinating. In this scenario, I imagine that the customer experience of course takes a completely different dimension. We are dealing with a great deal of exclusivity, high quality designer products, closely linked to the identity of the people who purchased them so their demands are also higher. What is this experience like in luxury retail and how has it evolved in the recent years?

LAETITIA
Okay. There is something I always tell to startups joining “La Maison des startups” at LVMH is what is personalization of the customer experience, because when you talk to a startup, personalization could mean for instance having the name of the customer written on the web page, it can mean to have a specific content personalize with the experience of the customer… But for instance, if you take the example of jewelry. When you personalize your experience for a jewelry customer it means that you know the husband of your customer. You know the kids of the customer. You know that the kid was sick last week…, you may deliver a flower to the lover of your customer. So it’s something that is very different. We are actually selling to an individual. So it’s human knowledge. it’s not just selling a product, there are lots of meanings behind it. And I think that’s probably the main difference.

ADARA
Yeah, I didn’t know all of that… Great. So especially in the industry you’re in, being transsetters yourself and the ones who set the bar besides user experience. How has this industry evolved in recent years and what challenges is it facing?

LAETITIA
Ah, so I imagine I will not surprise you by telling you that in recent years the major change was the covid 19 pandemic and of course this accelerated the shift to digital. You might know that in luxury some brands ten years ago didn’t have e-commerce. So it accelerated the shift to digital for a company like ours. Again going back to what I said before, the particularity of luxury is heritage, it’s tradition. So the whole challenge is really to find the right balance between how to keep tradition and modernity at the same time, and I would say that’s probably the main challenge that we face and that we have to work on to find the subtle balance between both. Another… I would say change is everything related with social and environmental responsibility.

For us. It’s not something new, I mean we have had a department since 1992. I’m saying that because some people may think it’s something new and it’s not new at all. What is new is the growing awareness of customers and the fact that we have to explain what we do because it was part of the strategy of the group of course and it is becoming more and more a coopillar of the innovation strategy and actually if you look at all the startups that we are accelerating in Station F many of them are on social and environmental innovation.

ADARA
Um, totally… And it is the holiday season and the time when Retail sales in general explodes… Does the same thing happen in the luxury retail industry in particular

LAETITIA
Ah… So of course for the holiday, luxury customers also have holidays. So yes… However, many products that are bought or experiences that are bought are also timeless and are not linked to just the holiday season. We were talking about an engagement ring or wedding ring and this is a completely different thing. I would say that the group is very wide so we have a lot of different universes. So It doesn’t work the same way “Wines & Spirits”. Ah, in watches and jewelry or in fashion for instance, so it’s very different depending on the universe.

ADARA
All right, and what exactly does “opening innovation” mean at the LVMH group?

LAETITIA
Open innovation is actually the department that I have the chance to build and manage today. It’s a new ecosystem I would say where the Maisons of the group can find innovation. So there are two pillars, one is our entrepreneurial program that allows anybody to bring innovation to the group, and the second pillar is La Maison the Startups the LVMH… So maybe you want me to give a little bit of detail of la Maison de startup LVMH… It’s an accelerator program based in Station F, we have between 20 and 30 startups each season. So this time we have 28 startups and they are working on different strategic topics for the group. We actually have 6 strategic topics: 3D and metavers, operational excellence and efficiency, employee experience, sustainability and Csr, media and brand awareness and retail and omnichannel.  And each of the startups have solutions that they can propose to the Maison and what we try to do is maximize the conversation between the Maison and the startups. So that they can co-craft the future of luxury. That’s how it works.

ADARA
Fantastic and and we’re super thankful for this program as you know we have the luxury ourselves to be part of those startups. So thank you very much.

LAETITIA
Thank you. I Think it’s a win-win situation for the startups to have more customers and understanding of luxury and for the group to have more innovation. So it’s the perfect win for both.

ADARA
Super! Let’s talk about your personal experience now. Before joining Lvmh you spent 11 years at Cartier as Marketing Service Director, Retail Customer Service Director and CRM and 5 years at Fred also owned by the lvmh group as Europe General Manager. Both luxury watch and jewelry brands. We would like to hear about how you came to launch the innovation department you are currently leading and your current position… Can you tell us more about how you ended up here?

LAETITIA
Yes, I can! When I listen to you I feel like I’m a dinosaur but it’s okay I’ll try to keep young… As  you said, I worked many years in marketing for L’Oréal, then Cartier and I worked in the US and also in France. I joined a group as a General Manager of Fred and the story is very interesting because it tells a lot about Lvmh DNA. What happened is that at the time I had been general manager for 4 years and I was wondering “Okay, what’s my next step”. And I was like “okay, probably another general manager rule. Maybe a little bit bigger, maybe in another industry…”. I didn’t know. So at the time somebody called Pascal Jouvin called me. So Pascal Jouvin is a guy in charge of executive development, part of the learning and HR department. And he said “you should join my team” and at first I was like…Why? I mean, first I didn’t know him and I was like HR …you’re in training… I’m the general manager of a brand…I mean what’s the link?  And the guy is very creative and he started talking about Bernard Arnault, the fact that Bernard Arnault is an entrepreneur… The fact that there were so many Maisons in the group that we needed to create connection between all of them. So in my head I was like “he is crazy, I will say no tomorrow”. And that night, I went back home and I couldn’t sleep… So during the night I actually woke up and I wrote my job description that is now what I do and the day after I call him back and I said “you know what, I thought you were crazy but you gave me some ideas so can I present to you a job I invented tonight?” He said yes, so I went to present him the job and…that’s how it started. So I quitted my job as General Manager to be on my own, to do a job I invented… I had no team. No budget. It was in the roadmap of nobody. We first started creating an entrepreneurial program and it worked well and today I have a department with almost 14 people now, the Graduate program, and many success stories. So I’m happy about what happened even though many people thought that I was crazy at the time.

ADARA
That’s awesome. This is the true story of writing your own destiny.

LAETITIA
Exactly! I do believe in entrepreneurial spirit and I think it’s an example.

ADARA
Totally, that’s amazing and I imagine that through your experience you have had to go through a multitude of economic challenges such as the 2008 crisis, the pandemic or their recent inflation. However, the effects of these economic challenges might not be the same in luxury as in fashion retail for example. In this framework, How do these constraints affect luxury and how do you deal with them.

LAETITIA
Yes, you’re right. I mean I experienced, again like a dinosaur, mini crisis and actually I personally was also in September Eleven in New York so that’s also another crisis that I personally lived…running in the street like any other newyorker. But I think here we’re talking about a macroeconomics context. Probably I’m not the right person to talk about that… we should ask economists about all of these things. The only thing I could say is something I do believe, is that the only thing that is certain is that nothing is certain and that we must constantly be ready to readapt and reinvent whatever’s the situation. So I think, each time there is something or not by the way we have to have many scenarios. And we have to be able to reinvent and navigate and not be scared. I will take one example that happened at La Maison the Startups. In France March 2020 was the covid right? So everything stopped. Everything closed, the boutiques closed, people stayed home and for a group like ours where you have 200000 people with 75 brands… I mean it’s something. And you know what happened? We said, two options: or my team stops and we all get fired or we try to think differently. And what we did on March Twenty, so 4 days after, we organized the biggest webinar online and at the time it was very “avant-garde” with thousands of people on the webinar and we presented the 3 solutions to the covid problematic that the people were sharing. So Replica was a solution part of La Maison des Startups and it was a solution to the salespeople that were not in the boutique and the boutiques closed. So thanks to this the Maison could continue to sell because it allows anybody to become a social seller.

So I think it’s an example of course after that, Replica became the startup everybody wanted to invest in and work with. And I think it’s a good example of what we need to do when we have a difficulty and the more alternatives we are ready to switch to the better we can face this.

ADARA
Yeah, totally. Creativity and being adaptable and ready for everything. Absolutely. And speaking of challenges and changes in the business. How has the arrival of ecommerce and social media changed the luxury market?

LAETITIA
I think it has changed in many ways. Probably the fact we need to be more aware of is that we have to be irreproachable. News and information travel at the speed of light and are accessible to all. Unfortunately, usually the bad ones travel faster because happy people don’t spend the time talking about it. So it’s usually the minority that is upset…

In terms of image, this is something we need of course to face. Another big change I would say it’s that because of all this change of access to information the customer and clients have become experts in everything they want. They can become experts in materials in quality and aesthetics in trends and this is a new approach to expertise. In the past you had salespeople that knew better than a customer. Now, even if you train the sales people the best way.

You’ll still have a customer who spends hours on the web learning and checking everything. So it changes the way we need to develop people… Of course that requires more training but also soft skills and we also need to adapt the speed at the level of our processors and that’s where a startup like Orquest that offers personal planning and management software based on the state of the algorithm comes in.

ADARA
So we really talked about the importance of client experience and luxury as important as the product itself and customer service is one of the foundations of this experience. And that’s why the employees of luxury stores are a key right? And I would love to hear from you about how staff management works in the retail luxury stores. Earlier, you mentioned the training and so on, but… if you could go a little deeper into that…

LAETITIA
I think that for a customer experience to be at an excellent level, you have to have a perfect interaction with your associates but you need to have an impeccable backoffice. It has to be invisible. If your customer sees that it takes time to… I don’t know, to print an invoice, if the customer sees that the way staff management was not done and because it was done the wrong way. Then we have a problem and we don’t have the right people in front then that’s where we have an issue so I have to say thank you Orquestt because I think the first important component of the efficient luxury staff management is this backoffice and process must be optimized because here the excellence is the keyword…

Maybe I’m repeating myself but the training is key and I was talking about soft skills a little bit before. I think there is this balance with the capacity of understanding the customer because a very rich customer probably has a lifestyle that the salespeople doesn’t have so the sales personson needs to be understanding, humble (that’s also a key I would say) of the of the situation, strong empathy and of course good tools also to organize the back office process. So yeah I think that’s the key of the management of a boutique.

ADARA
Yeah, it’s incredible all the things that need to work and in an invisible way like you said to have that amazing experience in the store… It’s pretty amazing. But it’s vital. It’s vital to create that special and exclusive experience at the store. Also LVMH as a group has different Maisons, high fashion like Dior, selective retailing like Sephora etc Wines & Spirits… How does the customer experience change between the different maisons?

LAETITIA
The LVMH Group has 75 maisons. All of these maison are completely independent. They have their own strategies. They have their own culture. They have their own identity and this is a wish. You know, very often people say ha why don’t you do that together. You will be more powerful. That’s not what we believe, we do believe that if we have a Bulgari customer we should work the Bulgari way and the Bulgari jewelry way and if we do Sephora it’s a different way and it has to be different. So, there isn’t a common process or way of doing things. In store management especially because that’s where the luxury experience happens. So I think, going back to the different universes, what matters is the reason:  why each customer is buying something, why the customer is in a boutique…. I’ll go back to my example of wedding rings. I mean, when somebody comes for the first time with his wife looking at the diamond and it’s once in a lifetime, it will not be the same way as when you buy your bottle of champagne to celebrate the anniversary of your husband.

So yeah, the impact on customer experience varies accordingly.

ADARA
Um, totally and how about tech and digitalization? In an interview with the french broadcaster BFM, you mentioned that innovation is part of LVMH DNA in what way?

LAETITIA
So you know our CEO Bernard Arnault is an entrepreneur himself. Okay, and for him what matters is cultivating entrepreneurial spirits. I think I could take an example of one of our brands, Louis Vuitton, and when you look at the way they have innovated throughout the years it’s very important. Before you had the horse and carriage era and you had no cars. That’s the moment where they changed the baggage and they invented a rectangular trunk and that was innovation at the time so it could fit in the car or in the train, right? So probably tomorrow when we’ll go into space we’ll invent a new kind of baggage that will allow us to go on in space.

I was telling you about cultivating entrepreneurial spirit. That’s why we also launched an entrepreneurial program called Dare. That allows anybody from the group, whatever is their country, job, experience… to be part of this community so they can suggest any innovative idea they can join any entrepreneurial project and that’s actually the “raison d’être” of the open innovation team, because we do believe that it happens by combining cutting edge innovation and also centuries of savoir faire and that’s how we can prepare the world of tomorrow.

ADARA
Very cool, certainly LVMH achieves a perfect balance between tradition and innovation and it’s not easy. It’s not easy…the past and the future and in this case. How can technology help with the customer experience we were talking about earlier?

LAETITIA
I think technology is a facilitator. You know it’s part of everybody’s life so the same way cars have become a part of everybody’s life in Vuitton it has to be also part of luxury life. So for us, technology is innovation. It’s just the new ways of working and the new ways of living so it has to be part of everything we do. So it’s key in creating smooth in store relationships for example and again working with Orquest is an example of managing the workforce backoffice to maximize sales opportunity and provide the very best customer service is a good opportunity for us and that’s what we need to do. We have many other examples of startups we have at La Maison des Startups that allow us to do that. I will take the example of ShowCase, that’s another member of la Maison de startups. They have developed a device that allows cell associates to offer a quality presentation of luxury products and that’s how we do believe that technology can work with us. So innovation is not related only to technology. It’s much more global than that and it can happen from and in every sector from craftsmanship, design…

ADARA
Totally. Yeah, I met the guys from the Showcase in Paris this year and it’s pretty impressive what they do. It’s very cool. Yeah, it is much more than just technology for sure and luxury is also a very niche sector but that doesn’t make all its customers the same. How does the Luxury retail experience change in different countries and markets? You have experienced a lot of them…

LAETITIA
I would say there are many specificities per country. I mean probably everybody knows about it, so I don’t know if I need to explain it… Talking about China, which has a more closed tech ecosystem for instance. That will have an impact on the retail experience and the experience with customers. If you look at diversity and inclusion it is most advanced in the US, so again, you don’t treat customer experience the same way… So I think what matters is understanding that there are differences and we need to work with this diversity and these differences and again I will go back to details and not global. I think what matters is not the global diversity but the individual specificities, the individual personalization, because we’ll have Chinese customers in France and we’ll have American customers in Dubai. I mean everybody’s traveling now. So what matters is to be able to answer all of the particularities of each customer, no matter where they come from.

ADARA
Yeah, totally. To start rubbing things up. How do you see the future of Retail Laetitia?

LAETITIA
If I could know, I would do… I don’t know, a job where I can predict the future… I think we can’t predict the future but we can invent it and we can be part of it. I mean we don’t know what will happen, we just have to be ready and again I think that’s why we have created an ecosystem that allows us to be ready for the world of tomorrow, whatever it is. The only thing I can say is that I hope this world will be more efficient, inclusive, responsible…both socially and environmentally and we will do everything to make it happen and we all have the power to be part of it and to build this future.

ADARA
Yeah, we have the power and of course the responsibility.

LAETITIA
Exactly the responsibility. Yeah, you’re right..

ADARA
And before we finish, one last question I always like to ask our guests. What is the business philosophy of Laetitia Roche-Grenet?

LAETITIA
I think for me, what is very important is the passion. It’s important to be passionate in everything we do and if not then we have to change the things we do in order to be so. I think the second thing is probably to be serious but don’t take ourselves too seriously. That’s very important… And I think the last part would be to stay humble because when we stay humble, we can listen to do everything around us, learn and improve ourselves.

ADARA
I love that and I agree. Thank you Laetitia. It’s been a joy to have you here and thank you to our listeners. I hope you enjoyed this episode as much as we did making it. We wish you a wonderful holiday season and a happy New year. Until next time.

LAETITIA
Thank you very much.

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