Information Technology Reference
In-Depth Information
This is because the luxury sector did not previously exist as an “industry” with
a structured consensus in management and an integrated approach to busi-
ness operations. Until the three largest luxury groups - LVMH, Richemont
and Gucci Group - were created in the late nineties and early noughties, the
luxury domain was interspersed by a group of families involved in the art of
creating, producing and retailing the finest quality products ranging through
leathergoods, fashion, jewelry and fragrance. The luxury sphere, however,
remained a domain of “activities” rather than an economic “sector”.
Today, this has changed - although this change is fairly recent. LVMH,
which came along and transformed the way luxury functions, was created in
1987, Richemont came along in 1988 and the Gucci Group was consolidated
shortly afterwards, although its parent company, PPR, had been in existence
since 1963. For the next decade, these three groups and the brands they own -
Louis Vuitton, Christian Dior, Fendi, Dom Perignon, Moët & Chandon, Tag
Heueur etc. for LVMH; Cartier, Van Cleef & Arpels, Piaget, Chloé, Dunhill,
Mont Blanc etc. for Richemont; Gucci, Yves Saint Laurent, Bottega Veneta,
Sergio Rossi, Boucheron, Stella McCartney, etc. for the Gucci Group - would
define the creative and business practices of the luxury sector on a global
market level. Their arrival brought about a change in the way luxury functions
where, instead of relying solely on artistic direction, the management aspect
became the force that drives both the creative and business outputs of luxury.
During the several years these companies have been in existence, a mod-
ern luxury industry has been born. Where there was traditional bureaucracy,
there is now streamlined business mechanics. Where there was resistance to
change, modern innovation has been adopted. Intelligent branding and mar-
keting techniques have replaced a cold, aloof and distant relationship with
clients. An international approach has been adopted in the place of regional
supremacy while talent, creativity, craftsmanship, perfection and skill remain
obsessively nurtured. Social factors and environmental issues continue to be
immensely respected and the industry continuously strives towards positively
influencing social and economic evolution. An example can be drawn from
LVMH's acquisition of a minority stake in ethical fashion brand Edun. This
combination of key success factors is responsible for the continuous growth
and evolution of the luxury sector. Needless to say, the birth of the modern
luxury industry and the emergence of a consensus in its management sys-
tems and business approaches have accelerated the evolution of the industry
and, at the same time, revealed several challenges that must be addressed in
its development.
The main challenging factor of growth in the luxury industry is technol-
ogy. In addition to dealing with the paradoxes of the Internet, digital media
and technology, the luxury sector must face up to other facets of technologi-
cal advancement. Luxury must find an equilibrium in adopting technology
in creation, production, retail, management and general operations. Just as
technology is an important aspect of the lives of late teens and early adults,
