What do Burberry, Bvlgari, Chanel, Coach, Dolce & Gabbana, Giorgio Armani, Miu Miu, Prada, Ralph Lauren, Tiffany & Co., Tory Burch and Versace all have in common? Well, besides being powerhouse fashion and luxury brands, they all source their beautiful eyewear from the same superb manufacturer – Luxottica.
That’s right. Based in Milan, Luxottica designs and manufactures luxury eyewear for all those brands and many more. Luxottica also owns its own internationally adored house brands, including Ray-Ban, Oakley, Vogue, Persol, Oliver Peoples, Alain Mikli and Arnette.
If you’ve never heard of Luxottica and are surprised to hear all this, there’s more. The company also owns many top retail eyewear brands, such as Sunglass Hut, LensCrafters and Pearle Vision, and has sales licenses with Target Optical and Sears Optical.
Customer Focused Innovation
Founded in 1961 by Leonardo Del Vecchio, Luxottica is the global leader in the design, manufacture, distribution and sales of premium, luxury and sports eyewear. With more than €7.3 billion in sales in 2013 and 70,000 employees, the vertically-integrated organization continues to stay focused on customers and expand worldwide. Luxottica has advanced design and manufacturing plants in Italy, China, Brazil, India and the United States, and in the last four years alone it has added nine retail brands to its impressive portfolio.
At Retails BIG Show 2014, hosted by the National Retail Federation at the Javits Center in New York City, Jim Fields, VP of Marketing at SAP, spoke with Michael Braine, SVP and CIO of Retail and Optical Services at Luxottica, about retail industry trends. Braine shed some light on the challenges and opportunities a vertically integrated and technically advanced organization such as Luxottica faces today.
“We’re seeing the convergence of in-store technology,” said Braine. Retailers are working hard to make online and in-store shopping seamless for customers. They are also leaning on technology to provide in-store experiences that can’t be found online. “The consumer is the center of the selling footprint,” said Braine. “That puts pressure on our organization to look for solutions that can move us from being less product focused – what we make – to more consumer focused – what they want us to make and how they want to see it out on the floor.”
I think Luxottica is doing a pretty good job of designing eyewear that people love, but putting even more focus on the customer is always a plus.
Vertical Integration is a Competitive Advantage
“From a retail perspective, we operate seven retail brands in the U.S. and another six brands globally,” said Braine. Luxottica also designs all product lines in house, manufactures in its own facilities, and executes an extensive wholesale operation across 130 countries, as well as a retail network of 7,000 stores worldwide. “Our vertical integration gives us a competitive advantage,” said Braine. Having product control from the design to the store adds strength to the company, but it also creates a complex number of business processes and partners to integrate and manage.
To maintain its competitive advantage, Luxottica uses a number of IT solutions. “We use the SAP Apparel and Footwear application and SAP for Retail solutions with some integration,” said Braine. “And we are looking forward to being able to deploy the fashion management solution that was announced today by SAP.” Working with Luxottica, adidas and Tommy Hilfiger, SAP is building a new single, vertical solution that will allow fashion brands to manufacture and sell their products to retailers and consumers.
In the future Braine hopes business software solutions become even more accommodating and easier to deploy, particularly when new processes don’t fall perfectly into the standard footprint of solutions. “For example, is franchising a retailing concept or is it a wholesaling concept?“ said Braine. “We are looking forward to the harmonization of retail and wholesale best practices, which will enable us to choose a greater assortment of processes to best deliver value to the customer.” Working with SAP on the new fashion management solution will make that a reality.
Luxottica has targeted strategies in place on how best to engage customers for all its products, no matter who is selling them. It’s also focused on building its own retail brands. “Sunglass Hut is a young, vibrant brand and technology lends itself to supporting that experience,” said Braine.
The new flagship store in Times Square is a perfect example. “If anyone has the opportunity to go see our Sunglass Hut in Times Square I think they’d be able to see how we are able to engage people on the street and in the store and make buying sunglasses an experience versus the grudge purchase that it could be,” said Braine.
Times Square is not exactly the easiest location to open a new store. The 24×7 activity, hoards of people and visual splendor put pressure on Luxottica from a design and technology perspective. “The volume at that location, the number of devices and number of engagement areas in the store posed some interesting challenges, but we are really excited and proud of that store,” said Braine.
I happen to live in Manhattan, so one night I stopped by the store at 1540 Broadway to check it out. On the outside wall a fun and innovative Eye Candy vending machine invites customers to try on sunglasses virtually any time of the day or night and make purchases through the touch-screen display. An impressive display of LED lighting dances to the beat of in-store music and the Bling Wall displays cool videos. Inside, the Sunglass Bar offers an interactive social space where customers can try on sunglasses, take pictures to share on Sunglass Hut’s SocialSun screens, and make purchases via sunglasshut.com.
So, whether you shop for new shades under the bright lights of the big city or at a favorite retailer in your home town, just know you’ll probably take home a finely crafted Luxottica product. And when you get compliments on how great you look, you’ll know who to thank.