Kering, the renowned luxury goods conglomerate behind iconic brands like Gucci, is intensifying its efforts to assert control over its e-commerce operations. In a bid to showcase its luxurious products in the best light possible, the company is concentrating on selling through its own branded websites or through partnerships that allow it to safeguard its image and valuable client data.
Although luxury brands initially entered the online retail space later than more accessible fashion labels, many are now taking substantial steps to invest in e-commerce strategies that enable them to retain authority over distribution and pricing. This level of control is crucial in upholding the sense of exclusivity that is synonymous with high-end brands.
Notably, Kering recently unveiled plans to reclaim control of the web operations for esteemed brands like Balenciaga and Alexander McQueen, which were previously managed by Yoox Net-A-Porter (YNAP), a platform now under the ownership of Kering’s competitor Richemont. This transition is set to be finalized by the second quarter of the upcoming year.
Furthermore, Kering is also focusing on boosting sales and profit margins by transforming collaborations with third-party retailers into online concessions. By taking charge of product assortment and presentation, the company has witnessed a significant uptick in revenue.
While Kering remains engaged in select wholesale partnerships, its digital team is expanding rapidly as the emphasis shifts towards reinforcing its online presence. What started with a team of just four members in 2017 has now evolved into an 80-strong workforce dedicated to digital operations.
Additionally, Kering is contemplating potential participation in a blockchain technology platform spearheaded by LVMH to track supply chains and authenticate products. Given that counterfeiting poses a significant threat to the luxury goods sector, such innovative technology could play a pivotal role in combating this issue.
In 2018, Kering’s online sales, encompassing transactions through third-party platforms, contributed to 9.4% of the company’s overall revenue. Sales generated via brand websites and online concessions accounted for 4.7% of the total revenue. Analysts project that e-commerce will drive 25% of luxury goods sales by 2025, a substantial increase from the present 10%.
In essence, Kering’s proactive initiative to tighten its grip on e-commerce operations underscores a strategic pivot towards harnessing digital platforms to propel sales, safeguard brand identity, and elevate the customer experience within the fiercely competitive luxury goods landscape.
Useful links:
1. Official Kering Website
2. YOOX NET-A-PORTER Articles on Business of Fashion
