What does High Performance Retail mean to you?
Chris de Lapuente: High Performance Retail is basically all about building great retail teams that are focused on winning by delighting customers better than anyone else. We operate in an increasingly competitive retail world in which today’s customers have more choices than ever before and these can be local, regional and even global. Competition in the retail world has never been tougher!
At Sephora, we are very focused on building the world’s most loved beauty community and to consistently increase the number of active “beauty insiders” in our community. This is key to long term success. We’re well on our way to building a community of 100 million loyal customers within the next three years or so. We also focus on building strong brand partnerships to create unique, differentiated and exciting initiatives for our customers. At it’s best I call it “retailtainment”.
From left to right: Chris de Lapuente, Chairman & CEO of the Selective Retailing Division of LVMH; Ian McGarrigle, Chair, World Retail Congress; and Adeline Ducray, Consultant in Spencer Stuart’s Consumer Products and Retail, Apparel & Luxury Goods practices.
What makes the difference in retail?
Chris de Lapuente: Retail is about doing ordinary things extraordinarily well, day after day. And being obsessed about delighting customers. Offering superior service and having a clear point of difference on product assortment is critical because it reduces dependency on discount promotions that can risk diluting operating margins, which would reduce opportunities for investment in better shopping experiences.
In terms of driving a point of difference, how do you think about own brand and exclusive product at Sephora?
Chris de Lapuente: We don’t have a specific sales percentage goal for our Sephora Collection Own Brand but it’s clearly an important differentiator. Having exclusive and own-brand products increases our Sephora point of view and clearly differentiates us from competition.
What has become more important in retail over time?
Chris de Lapuente: The best retailers are brilliant at product curation. The best have great merchant teams who clearly understand new category trends, what customers want better than anyone else, and can build great partnerships with brand owners to co-create customer excitement. It’s so much more than just the traditional retailer/brand negotiations. This is becoming more critical than ever. A brilliantly curated offer is part of the magic of Le Bon Marche and Sephora, where customers regularly find things that surprise and delight them.
How do you think about innovation in retail?
Chris de Lapuente: Innovation in retail is broader than innovation in consumer goods. When I worked at Procter & Gamble earlier in my career, we were mainly focused on developing major product initiatives that were rolled out globally. In retail, our innovation pops up in different places and is very local/regionally led. We actually do very little innovation on a global basis. We have extremely lean global teams that are mainly focused on accelerating best practices across the world. We also invest a lot in retail stores and e-Commerce Innovation to improve in-store “retailtainment” and ease of convenience.
Retail innovation can be quite simple and yet very rewarding — e.g., we changed the way customers queue up to pay and put out “mini” products for customers to explore and hopefully put in their shopping baskets while they were waiting. That last item in the basket is now a meaningful percentage of our business and it all started with an idea for a different queuing system. In terms of ease and convenience we now offer two-hour delivery to customers living within a 10km radius of our US stores. The beauty of retail innovation is that we can try new ideas/concepts in few pilot stores — test quickly and then learn fast.
How are you thinking about AI and data?
Chris de Lapuente: AI should help us to understand our customers even better, to spot trends faster and to be more proactive. It can also help us to better manage our supply chains and our product demand/supply forecasts. As retailers, we have a huge amount of customer and business data which, frankly, we could do a much better job at data mining in order to better understand our customers and, in turn, better surprise and delight them. We have just appointed our first global chief data officer and we are elevating the importance of data in our organisation to hopefully transform it into a source of strategic competitive advantage.
What will be most critical for success in the future for retailers?
Chris de Lapuente: Having the best people is always on my mind. Winning in retail is all about building brilliant diverse and inclusive teams. We want people who love retail, work in the categories they’re assigned to, love delighting customers and are passionate about winning! As a major watchout going forwards, we are starting to see a greater need for more flexibility on work schedules in how we run our store teams. Post covid, the work/life differences between those who work in offices and can work more flexibly and remotely, and those who have to be in stores, are becoming more apparent.
What’s your approach to leadership?
Chris de Lapuente: Building winning teams is extremely important to me. I want to work with passionate people who want to WIN and be the best in their industry. I believe in always setting an exciting vision, clear strategic choices to win and then work with great leaders that are “hungry”, ambitious and are great team players. A diverse and inclusive people culture is also personally important to me. If you build a culture of delighting the customer better than anyone else, and be passionate about building your brand and your point of difference, the results will follow.
Chris de Lapuente is Chairman & CEO of the Selective Retailing Division of LVMH. This piece is based on comments made by Chris at a drinks reception held at Spencer Stuart’s Paris office in February for senior retail leaders, co-hosted by World Retail Congress and Spencer Stuart.