During the pandemic, the fashion and luxury industries were quick to adapt their productions facilities to provide essential medical equipment and prompt in making donations to healthcare organizations.
Yet, store closures led to a fundamental consumer shift to digital. With every aspect of brick-and-mortar retail upended, some fashion companies appeared better positioned than others. If retailers have a lesson to learn from COVID-19, it’s the necessity to operate a long-awaited digital transformation. In addition to the implementation of health and safety measures to welcome back customers to their physical locations, French fashion retailers have to adapt to the “New Normal” and rethink their omnichannel customer experience. Within this transformation challenge for brands and retailers lay opportunities for innovative startups in the Paris Region.
Bringing in innovative solutions to stay connected with customers during the pandemic
With stores compelled to close for two months, brands, retailers and resellers who had existing digital solutions or implemented new ones were able to better maintain their business activities and to stay in contact with their customers.
It could be as basic as launching an e-commerce website for those who had no digital presence. For example, Montaigne Market sped up the launch of its shopping websites after the announcement of the lockdown. The Luxury Fashion Shop and Concept Store waited 15 years before making the jump to digital. The founder explained to fashionnetwork why she finally decided to go for it:
We waited until 2020 because the Internet is a separate profession. With the uncertain times we live in, and the fact that people travel less, that the streets of Paris are empty with successive social movements, it had become essential to be visible on the Internet. As a family structure, we waited until we were ready to launch this new adventure.
Increasing digital capabilities has also entailed granting customers a better and quicker access to customer service. Some Luxury brands such as Dior, decided to enable customers to make an appointment by calling or texting the sales associates directly, whilst others preferred the more usual click-and-collect service. The crisis led Parisian brand Celine to accelerate its digital transformation roadmap by providing earlier than planned a clienteling app to its sales associates including their CRM, the catalog and mobile payment so they could access their clients and make sales remotely.
Galeries Lafayette designed a new online shopping experience named “Exclusive Live Shopping“, a personalized live video retail service focusing on luxury brands. Guided by a personal shopper or brand ambassador via video conference, customers can enjoy a tailor-made and unique shopping experience from the comfort (and safety) of their home. To roll out this new omnichannel service, Galeries Lafayette worked with GoInStore, a UK startup accelerated by Lafayette Plug and Play, the retail innovation platform.
We strongly believe in omnichannel retail, and the unprecedented situation that we have just experienced drove us to demonstrate the extent of our agility and creativity. Our objective is clear: making what we offer at our flagship store on Boulevard Haussmann accessible to as many people as possible, beyond its walls.
Retailers are also investigating alternative payment methods and encouraging contactless payments. To facilitate the latter, French banks have raised contactless payment limits to €50. In a webinar held on June 15 by Institut du Commerce Connecté, the payment platform Adyen shared that they observed a 10% increase of contactless payment and a 31% raised of amounts spent this way since the reopening.
Supporting the digital transformation of French fashion brands
Fashion brands that did not offer digital solutions were more impacted by the crisis. The Fédération Française du Prêt à Porter Féminin (French Federation of Women’s Ready-to-Wear) has been alerting the sector for several years on the need to move towards digitalization. Six digital issues have been identified as hindrances in the development of French fashion brands and retailers:
1. Subscription to a BtoB platform: CRM, email marketing automation platform;
2. Digitization of collections: solutions on image processing, augmented reality and virtual reality or video;
3. Creation and optimization of an e-commerce website;
4. Digital strategy and marketing;
5. Joining an e-commerce delegation;
6. Listing on marketplaces.
In the wake of the pandemic, the Fédération has devised a new program to amplify the digital impact of 70 French fashion brands. The program is financed by the DEFI, a business organization whose mission is to support and accelerate the development and transformation of the French fashion and clothing industry.
Today, because the recovery of the retail sector will be gradual and because there are still a number of uncertainties about the next trade shows and showrooms, we have thought up this plan to accompany the omnichannel strategy, necessary for the survival of our companies.
Known as the Digital Amplification Plan, the program aims to mitigate the six digital issues identified above. More than 20 digital partners played the game by lowering their rates or offering a specific device. Among them are some international companies accompanied by Choose Paris Region in their expansion to France, such as JOOR, Smartzer, Uppler and Hubspot.
Brands have massively developed e-commerce sites aimed at the general public and, at the same time, until recently they used notepads and pencils to record their orders in showrooms... This pandemic is awful but, in a way, it puts the profession back against the wall and makes it take a big step forward.
French Luxury groups and retailers are on the look-out for RetailTech and e-commerce startups
For the past 4 years, LVMH has been partnering with Vivatech, the largest European tech and open innovation event, for its LVMH Innovation Award. For this year’s edition, more than 1,200 startups from 79 countries entered the competition to present their projects on how to craft the luxury customer experience of tomorrow.
Although Vivatech will not take place in 2020, LVMH still held the challenge and announced the 30 shortlisted on June 10th . They come from 8 different countries including the USA, Canada, UK, Israel, France and the Netherlands. Their solutions range from new materials to 3D rendering, customer behavior analysis or community engagement.
The finalists will be invited to join La Maison des Startups LVMH, the Group’s incubator at Station F, for a full year. Their selection opens for these startups an avenue for future collaborations with the 70+ Maisons of the group.
Lafayette Plug and Play, the business accelerator for the retail and e-commerce industries by Galeries Lafayette, is currently selecting its 9th batch and hosted its Summer e-Expo Day on June 25. It showcased the 15 accelerated startups from batch 8 coming from the USA, Israel, Germany, Australia and France. They offer solutions reshaping retail amid the New Normal on 6 major topics: E-commerce Enhancement, E-commerce User Experience, Pricing & Markdown Optimization, Online Distribution Monitoring, Enterprise 2.0, Customer Knowledge & Data Insight.
Other programs backed by key players of the sector are also welcoming international startups looking to tap into the French market such as Veepee Impulse. The innovation platform of Veepee, the French online retailer that pioneered the model of online flash sales, is focusing on solutions reinventing online shopping and retail across different topics: sizing, logistics solutions, payment, marketplace, data, AI etc.
LookForward, the incubator of the French online fashion retailer Showroomprive.com, targets start-ups willing to transform our ways to produce, distribute and to consume fashion and beauty. The accelerator program led by Adidas at Station F, Platform A, offers a track dedicated to retail and e-commerce in addition to its campus track spotlighting innovation based on Sports tech and sustainability.
The pandemic has elevated digital channels as a must-have for retailers and fashion brands. The shopping experience is undergoing a rapid transformation while digitalization lies at the heart of every new customer experience strategy. Both luxury groups and retailers have already entered the digital arena and now offer unique opportunities for international RetailTech and e-commerce startups to grow their businesses in France and Europe.
But this transformation will also be a key challenge for fashion, a sector that represents a 154 Bn direct turnover and employs more than 600,000 persons in France, with smaller brands that need to take the digital leap.
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