Technology, a new strategic priority for luxury houses

Luxury houses are significantly increasing their spending on technology. This is the main finding of the fourth edition of the "Luxury and Technology" report conducted jointly by Bain & Company and the Comité Colbert.

Technology, an essential strategic lever

The study reveals that 85 percent of chief executive officers believe that technology is important for the execution of their strategy, while 8 percent even consider it essential. Luxury houses are demonstrating increasing maturity on this subject. Thirty-seven percent of them state that they already have the necessary technological skills. The remaining 63 percent declare that they partially possess them.

On average, luxury houses devote 3.1 percent of their turnover to technology. This figure is expected to increase, as 60 percent of companies in the sector plan to increase their technology budget by more than 5 percent in the next two to three years, while 28 percent anticipate an increase of more than 10 percent. Unsurprisingly, this acceleration in investment is notably due to the needs in terms of artificial intelligence. Cybersecurity and systems modernisation are also significant expenditure items.

In parallel, the report highlights the importance of closer collaboration between senior management and technology teams. Bénédicte Épinay, general delegate of the Comité Colbert, stated: "Today, CIOs [Chief Information Officers] no longer simply execute; they occupy a central place in the transformation of luxury houses."

"In a tense economic context, luxury houses are faced with the imperative of optimising every resource committed," added Joëlle de Montgolfier, global director of the Distribution and Luxury Study and Research division at Bain & Company. For Montgolfier, the objective is not to "simply reduce them to save money or increase them to get closer to a sector benchmark," but to "calibrate them as accurately as possible according to the objectives of each company."

This technological transformation is particularly important for the luxury industry. It must both preserve its heritage and adapt to new consumer behaviours while protecting itself from cyber threats. This issue, for example, affected the luxury group Kering, which was the victim of a cyberattack last June.

Optimising investments and consolidating collaboration

To enhance the effectiveness of these investments, the report suggests three strategic levers:

Aligning technology priorities: Investments must be perfectly aligned with the overall strategy of the house.
Modernising infrastructures: It is crucial to streamline the technological architecture, eliminating redundancies and promoting shared platforms to create synergies.
Internalising skills: Currently, 68 percent of innovation expenditure relies on external providers. To gain agility, the report recommends internalising certain skills further and using innovative tools, such as AI-based coding assistants.

Fashion and AI

Beyond luxury, let's recall two recent examples of major partnerships between the fashion sector and artificial intelligence: the recent stake taken by the Inditex group (parent company of Zara) in the "intelligent" robot start-up Theker Robotics; and the potential stake taken by the Meta group (formerly Facebook) in the French eyewear group EssilorLuxottica.

These examples illustrate a striking fact of our time. Today, it is not only the luxury sector that is radically committing to the path of technology, but the entire fashion industry, from fast fashion players like Inditex to eyewear giants.

Moreover, artificial intelligence tools are now part of the daily lives of many creatives in the sector. The Spanish company Desigual, for example, has found in AI not only a creative tool, but also a way to consolidate its market positioning. Through its Awesome Lab programme, the company uses AI for product design and personalised marketing. These practices are tending to become widespread.

This article was translated to English using an AI tool.

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