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  • Lisa Henry

"Luxury brands have imported their DNA into e-commerce", Vincent Mayet, Managing Director, Havas Par

Havas Commerce, a French consultancy firm, has published the "Luxe 3.0" study on the current and future challenges facing the luxury sector. Meet Vincent Mayet, Managing Director of Havas Paris, for an overview of the results of this eight-month study.

How did this study come about?

We started by taking an in-depth look at companies like Amazon, Alibaba, and Walmart. Then we tried to look further afield, to dig deeper and take small steps to the side. China, and in particular luxury goods on the Chinese market, are subjects that emerged when we were working on Alibaba and we saw how the company, very opportunistically, created marketplaces according to the targets it wanted to reach. In other words, it decided to launch a marketplace dedicated to luxury goods or others dedicated to the B2B segment. So the company creates as many marketplaces as it needs to address specific targets. With this in mind, we turned our attention to the luxury goods market.

How are luxury brands adapting and blending in with increasingly digital and innovative marketing channels and universes?

I find the way they respond to this challenge quite exciting. Firstly, they haven't forgotten their DNA, their quality. Luxury brands have not agreed to go on popular marketplaces at any price, but only when they are focused on luxury, particularly in China. In this way, they did not sell off their brand image. In doing so, they have managed to establish themselves on innovative digital channels, such as the metaverse and NFTs, and have even managed to position themselves on social networks and influence. In short, they have been able to innovate and make use of the technological tools available to them, while remaining selective. I think this is one of the strengths of luxury brands.

How do they manage to integrate into marketplaces while retaining the exclusivity that is the DNA of luxury?

They have imported their DNA into this 2.0 commerce. For example, on certain marketplaces in China, it borders on the metaverse. You enter a street in 3D, then go into different boutiques. It's the Faubourg Saint-Honoré of the web. Each virtual boutique respects the codes of the brands and their universe. Rather than setting up shop on marketplaces where the search engine pits them against other, more mainstream brands, they have managed to use this type of digital tool as an extension of their physical shops. This is how they protect their DNA. But as well as preserving it, they are playing it up even more. Thanks to the digital resources at their disposal, luxury brands can expand and augment their brand codes. Digital technology, which gave the impression that they were going to blend in with the crowd, is actually enabling them to stand out even more, thanks to highly rewarding environments. Brands really had no choice but to go digital. Generation Z, particularly in China, has developed a strong appetite for luxury and is becoming a major consumer. These new customers are almost exclusively on digital and social networks. Managing to maintain an intimate and confidential dimension while at the same time positioning ourselves on web tools has become an obligation.

The word "phygital" is often used in today's retail world. How can this term be applied to luxury today?

This phenomenon is not exclusive to luxury. 10-15 years ago, the network of physical shops saw e-commerce as a competitor. This phenomenon lasted for quite a long time, with many retailers refusing to accept the complementary nature of e-commerce and to see their products on the digital market, sometimes at slightly lower prices. Today, we are seeing an omnichannel (phygital) convergence of digital and in-store, serving common interests. With the development of marketplaces, it is clear that digital is becoming an extension of the shop, rather than a competitor.

The shop is becoming a force for physical, tangible experience, complementing digital. Phygital is the creative meeting point that pushes back the boundaries of physical sales and gives marketplaces the qualities, experience, and pleasure of the shop. Bringing the two together creates a genuine customer experience. Luxury brands excel at this.

Can we imagine a future with dedicated marketplaces, like the Amazon of luxury?

This future is already beginning. Amazon has created "Amazon Luxury Stores" on its website, which is struggling to win over customers in France. Farfetch, meanwhile, is off to a strong start. These marketplaces offer luxury brands the opportunity to create shops within their own ecosystems. In my opinion, this is the way things are heading. But this will only happen by creating dedicated spaces that are truly controlled by the brands, because they will not accept being sold in mainstream ecosystems. They are right: this is what will enable them to live and develop their uniqueness.

"Brands didn't agree to go to popular marketplaces at any price, but only when they were focused on luxury, particularly in China."

Why did luxury brands "miss the boat" on e-commerce in the 2000s?

They didn't "miss the boat", they just didn't want to. E-commerce wasn't adapted to their brands and the way they wanted to manage them. They refused, despite the siren call, so as not to create promiscuity with mainstream brands that didn't suit them. I think they did the right thing.

They didn't oppose it, but simply took a step back to see what e-commerce had to offer. Since then, luxury brands have come to see the benefits, particularly in terms of tackling the Chinese market, which would not have been possible with physical shops alone.

How is China influencing the luxury sector?

In France, we've been talking about the metaverse for some time, but in China it's already in place. For example, there are digital models who have an audience of several million people. They follow the models and promote the brand; they have the same role as a traditional model. While in France these technological advances are predicted, in China they are already part of everyday life. Chinese consumers have such an appetite for technology that you have to offer them innovation and novelty on a regular basis, otherwise they get bored quite quickly. Unlike European customers, they take more pleasure in navigating complex technological ecosystems. That's part of the premise for selling products in China. You need to appeal to this generation Z, which is often made up of only children who are strongly attracted to luxury brands.

Does CSR play an important role in the luxury sector and in customer expectations?

I think that the expectations of luxury consumers in terms of CSR emerged more or less at the same time as in other sectors. Attitudes in Europe are very much in advance when it comes to environmental issues. But even in China, we can see that there are expectations in terms of ecology and social commitment. Brands have moved a long way in this direction, particularly through the materials they use. They have understood that 90% of consumers are capable of abandoning a brand if it is not committed to the environment, especially young people. These growing expectations are contributing to the emergence of new designers like Stella McCartney, who uses no animal leather. These young designers are shaking up the world of luxury, and their customers are following them. What's more, unlike other sectors, the price argument as a selection criterion in inflationary times doesn't really exist in luxury, leaving consumers more scope to focus on CSR criteria. I think we're going to see a further acceleration in this area from luxury brands.

Is there a place for second-hand goods in the luxury sector?

I would even say that it has a very important place. Today, more and more luxury brands are seizing on their second-hand products or their old collections. I think that, in time, this will become an almost compulsory service if they want to continue selling new products.

His background:

2012: During his career as a marketing communications strategy consultant, Vincent Mayet, a graduate of ISCP, has worked with major brands such as PMU, Audemars Piguet, Le Bon Coin, Axa Assurances, L'Oréal, Philips France, Citroën, Marionnaud, Intersport and Carrefour Market. He joined Havas in 2002 and became co-CEO in 2012.

2016: Managing Director of the Havas Paris agency since January 2016, following on from a career spent within the group, Vincent Mayet leads "Paris Shopper", a global offering launched in partnership with Fullsix Retail which provides brands and retail chains with commercial communication expertise.

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