Much of this growth during the emergence of a new digital era has come from the likes of LVMH, Richemont, and Kering, the French luxury group that owns Gucci, Bottega Veneta and Saint Laurent.
However, the growing number of start-ups that are employing innovative business models to exploit the luxury market offer managers an opportunity to make their mark as they expand workforces.
Gachoucha Kretz, professor of marketing at HEC Paris and a former executive at LVMH, says: “Start-ups in fashion and luxury are just at their infancy and will drive lots of positive outcomes — like creating very exciting jobs.”
She highlights a digital business founded by alumni of the France based business school, which has expanded rapidly and works with most major French luxury brands. “They bring their e-commerce and digital expertise to premium fashion brands that do not want to, or cannot, enter e-commerce directly and by themselves,” says Gachoucha.
Start-ups are successfully mixing a passion for luxury with digital technologies to sell brands online, and are shaking up the traditional notion of luxury commerce.
It has taken a long time for tech companies to crack the luxury fashion sector. But many are now enjoying growth from their bases in traditional fashion centres such as Paris, Milan, London and New York — where the best designers and brands are clustered.
Ivan Coste-Manière, professor of marketing at SKEMA Business School, says the early adopters, such as Ralph Lauren, Michael Kors and Richard Mille have fast been capitalizing on digital, as technology pushes companies to invest.
“Engineers, digital marketers, digital branders, CRM specialists and community managers are becoming a must for these companies,” he says.
Successful luxury fashion tech start-ups include London based Farfetch, which raised $86 million based on a valuation of £1 billion; Vente Privée, the Paris based online sales group, which has reportedly been valued at $3 billion; and London’s Lyst, which has raised $60 million from investors including Group Arnault, the majority shareholder of LVMH.
“These companies are definitely taking notice and we’re starting to see more sophistication with technology in terms of linking the store experience [online],” says Chris Higgins, assistant director at the Career Development Centre of INSEAD, a global business school.
Meanwhile, the €1.3 billion merger of Richemont owned e-commerce platform Net-a-Porter and Italy’s online fashion retailer Yoox signalled that fashion tech has become big business.
Professor Thomaï Serdari, strategist in luxury marketing and branding at NYU Stern, says that there will be both new career and business opportunities as a result of luxury’s digital drive.
But she points out that Fashion-tech start-ups are not for everyone. “Start-ups are risky propositions, but they offer a great training ground for students with a lower aversion to risk, an entrepreneurial attitude and a hands-on approach to learning,” she says.
“There will be job opportunities in terms of e-commerce, e-services, and logistics and the supply chain,” says Professor Simon Nyeck, academic director of the MBA in International Luxury Brand Management at ESSEC Business School.
He says that luxury brands have been laggards in the digital realm, and have been losing talent to retail brands such as Nike and Uniqlo, the Japanese casualwear designer.
The big luxury groups have been slow to roll out online platforms for fear of undermining the sector’s exclusive, up-market values.
“Luxury designers and brands tell clients what to wear, carry, what to like and what to wish,” says Professor Maria Eugenia Giron, executive director at the IE Business School Premium and Prestige Business Observatory. “The internet represented two way dialogue and a shift of power that luxury brands did not know how to handle,” she says.
But this is changing. “There are now several luxury brands that have developed a successful digital strategy — proving that it is possible to create an omni-channel engagement while staying true to their DNA — Burberry, Chanel and Gucci are examples,” says Erica Corbellini, director of the Master in Fashion, Experience and Design Management at SDA Bocconi School of Management.
Angelo Manaresi, director of the MBA in Design, Fashion and Luxury Goods at Bologna Business School, highlights experience working in international teams and language skills as desirable among luxury sector recruiters.
“A good balance between technical competence in marketing and finance, and a passion for the industry, is another strong asset,” he says.