In the face of the health crisis, the luxury universe is resilient. Despite an unprecedented decline of 23% at current exchange rates compared to 2019, the sector is doubling its market share of online product sales from 12% to 23% between 2019 and 2020. This ability to resist and transform has allowed it to pull its weight, particularly on the digital front. Zoom in on what the digitization of the supply chain, and more specifically of transportation, is bringing to the world of luxury.
According to Bain & Company, despite the global crisis, the luxury goods industry could be back on a strong growth path, suggesting a return to normal by 2022/2023. In this context, how is the sector coping with the disruptions in the world of transport and logistics? Shortages, decreasing capacities, increasing freight rates… The current context is agitating many distributors and manufacturers, including in the world of luxury goods.
Multiple transport challenges for a high value-added supply chain
Strongly driven by the international market, a major user of air travel while being increasingly committed to reducing its environmental footprint, the luxury sector is facing multiple challenges. First of all, in terms of customer experience, since the majority of customers are located in Asia and the United States. Thus, to serve them, luxury players rely on essentially global flows. In times of health, capacity and economic crisis, this is a real challenge.
In addition to this context, there is the customs complexity generated by the value and nature of the products or raw materials transported. Leather, silk, wool, jewelry… These particular flows require particularly fine management and computerized and documentary monitoring, highlighting the challenge of article traceability. Management is also required due to the diversity of subcontractors and specialized manufacturers, and the need to coordinate this heterogeneous ecosystem efficiently and sustainably for a high value-added service.
Event transport and omnichannel: particularities of the luxury world
Another subject specific to the luxury world: the management of flows linked to fashion shows and the famous Fashion Weeks in New York, London, Milan and Paris. Behind each of these events, sensitive operations take place, linked to the routing of products, their traceability and their delivery. Finally, one of the greatest challenges for all retailers remains: the transition to omnichannel and the resulting special flows in the world of luxury ; the particular care taken in managing returns, the immediate availability of products, as well as more extensive notions of guarantee over time.
All of these particular needs, in the service of a demanding clientele, have finally pushed the big names in the sector to undergo a profound digital transformation for some time now. To accompany them in this paradigm shift and adapt their supply chain to these different evolutions, transport management solutions exist.
Digital solutions for transport and international trade in the luxury industry
In an omnichannel context, faced with the increasing complexity of transport operations, logistics platforms now serve multiple flows to end customers and the parcel operators who deliver them, as well as their store networks. Ship-from-store, delivery in store, delivery by appointment… All of these scenarios, born of the advent of omnichannel, must be skilfully orchestrated, both from a physical and digital point of view.
To do this, interfaces are needed between the various software packages, such as OMS, WMS and TMS. Whether it is to the stores or directly to the end customer, digital transport management solutions such as the DDS Shipper TMS make it possible to organize dedicated operations with the various players in the supply chain. It transmits and shares reliable information in real time with forwarding agents and express carriers, in particular by making transport documents available in electronic format. This process also facilitates customs clearance for raw materials or products, such as perfumes, which are subject to specific controls and declarations.
The TMS is also capable of identifying the capacities of different carriers and guiding the user towards a relevant choice according to the expected service framework. At the same time, tools such as collaborative digital platforms enable a whole ecosystem of suppliers to be quickly integrated into their logistics processes, regardless of their level of digital maturity. Everyone is then involved in a common work process, bringing together luxury manufacturers, suppliers and transporters.
Transport visibility for a premium customer experience
In terms of visibility, transportation management software offers the ability to concentrate information from different carriers and ensure the quality of their services. Respecting SLAs, deadlines, and customer promises are major issues whose follow-up is one of the critical subjects of the customer experience.
Through a digital solution, luxury goods companies can be sure that the transport service will meet their expectations and those of the final recipient. In the same way, digital tools allow them to establish a link with the product being shipped. By offering a precise vision of the product throughout its cycle and alerting teams in the event of anomalies, digital transport solutions offer global and daily management of service quality.
Finally, to meet the ecological commitments of the big names in luxury, the TMS has the capacity to measure the GHG emissions of shipments and to implement new virtuous logics around the grouping of orders or even modal shift. Designed as a measurement tool, the digital tool allows brands to obtain very precise figures on their emissions and to initiate actions in line with their CSR commitment.
TMS & collaborative transport platform to manage non-standard operations
Digital transport solutions also support luxury industry players in managing specific processes, such as spot operations dedicated to the preparation of fashion shows. These specialized, just-in-time transport activities require particularly precise real-time management to ensure proper routing between the workshop and the event location. Solutions such as Join2ship based on mobile applications, supported by the democratization of real-time tracking, even for non-equipped carriers, allow to collect and share this information to ensure the success of these operations.
Finally, in this sector more than any other, the challenges of traceability on the product itself, throughout its life cycle, are major. A consortium of luxury brands has been created around the Blockchain and its ability to trace products in a transparent and secure way. Called Aura Blockchain, it includes LVMH, Prada and Richemont, all of whom are keen to guarantee the traceability of their products, from manufacture to delivery and maintenance. Able to connect to these disruptive technological solutions, the digital transport platform feeds the product’s digital passport, providing it with information on the delivery of the products, even specifying the share of CO2 linked to the product’s transport.
Digital as a lever for the global performance of luxury industry players
Process reliability, compliance with service commitments from upstream to downstream, traceability of traditional or event-driven flows, real-time product tracking and control of CO2 emissions are among the major levers provided by digital transport management solutions. Through TMS software, a collaborative transport platform or even a dedicated mobile application, players in the world of luxury are positioning their supply chain as a lever for economic and sustainable performance, driving their growth. A growth that already seems to take off. This is evidenced by the figures achieved by the global player in high quality products LVMH Moët Hennessy Louis Vuitton in the first quarter of 2021: sales of 14 billion euros, up 32% compared to the same period in 2020.