French luxury giant Kering, the company behind high-end fashion brands like Gucci, is turning to artificial intelligence (AI) to ensure that growth continues to impress. Over the last six years, online sales have risen an average of 41% per year – that’s an incredible achievement, and one that Kering knows it can’t maintain. At least, not without the help of some cutting-edge tech.
Kering’s share price has appreciated by 21% so far this year
Source: Yahoo Finance
Kering announced last week that it would be outfitting sales assistants with new software, which leverages advanced AI technology to allocate stocks – essentially sending products exactly where they need to be, when they need to be there. Kering is betting that this move will help to keep sales rising at their current pace. At first, Gucci will be the only brand outfitted with this tech – fitting, since the label is red hot at the moment. Kering’s other big names are not far behind, though.
Gucci, which is targeting growth double that of the luxury sector as a whole, will begin by testing out the technology on its European handbag business. In the long run, the group expects this move to result in a 20% better sales forecast accuracy.
The group’s new app for sales assistants will also look to drive more sales directly. Kering said that staff who have access to customers’ past purchase history (as well as real time info about trends and availability) tend to facilitate spending of between 15% and 20% more than otherwise. In an effort to get more of this valuable data, as well as take greater control over its own digitisation, Kering will be operating the online stores for most of its brands in the near future. Currently, the group operates Gucci’s online store, but brands like Saint Laurent and Balenciaga are being run by Yoox-Net-a-Porter, whose license runs out next year.
Speaking about the move to take over its brands online stores, Kering digital director Gregory Boutte said: “The transition will be seamless. This is a companywide effort. We want our brands to feel like they own their online business the same way they own a store.”
Disclosure
Dominion holds Kering in its Global Trends Luxury Fund.
Author: Theo Leworthy
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