Luxury: Why heavyweights are launching their own startup incubator

It’s not easy getting through the automatic security gates with a big black suitcase on wheels. Despite his efforts, Denis Hayoun remains trapped behind closed doors. Fortunately, the reception team at Station F, the XXL startup incubator located in the 13th arrondissement of Paris, quickly unblocked the situation. He goes to his office a few meters down the road. The comfortable space is made up of 89 workstations in a beautiful Klein blue, where we work in front of laptops. Small white design lamps and some tropical plants decorate the whole. He places the black bass drum on his table.

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It is its content that brings it to this space, the Maison des startups LVMH, as indicated in elegant letters at the entrance to the space. In 2018, the large luxury group partnered with Station F to launch a startup acceleration program there. Its neighbors are Microsoft, Ubisoft, Edhec or even Meta (formerly Facebook). “We support startups whose digital, social and environmental solutions meet the needs we identify in our homes,” explains Laetitia Roche-Grenet, director of open innovation at LVMH, sitting on a sofa in the relaxation area.

Startups from the House of LVMH. © LVMH

An example, the ShowCase, which Denis Hayoun carried in the box and which he invented with his partner Fabrice Rabhi. The rectangular device with a black shell is topped by a screen and has two openings revealing a pristine white interior. He calls: his “phygital” machine allows him to present a luxury object – a piece of jewelry, for example – to an online customer, following the same meticulous protocol as in the store. Useful, at a time when luxury enthusiasts are increasingly using the Internet. About twenty young shoots like this one are “accelerated” here for several months.

ShowCase, a distance selling device, allows you to recreate closeness with customers when they are online. © The Showcase

Because in recent years the large luxury groups have delved into the start-up ecosystem. And this in particular by creating incubators or accelerators to support them. In 2015, Showroomprive.com, for example, created Look Forward, an incubator for luxury engagement themes. In 2016, Moët Hennessy, the wine and spirits subsidiary of the LVMH group, launched MH Lab 78, a “co-development space” located at the group’s headquarters in Paris.

In 2017, Kering joined forces with Fashion for Good, an Amsterdam-based startup accelerator specializing in eco-responsible innovations for fashion and luxury, which Chanel has also joined. Forty startups are supported there for nine months. A year later, the Maison des startups LVMH was created at Station F. So was the Beauty Tech Atelier, L’Oréal’s digital beauty accelerator – about ten startups per six-month session.

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Selfless philanthropy? No, not least because this type of investment is expensive, even if the numbers remain confidential. “Luxury has a strong challenge of adapting to the expectations of customers, who are a little younger than before: they must quickly adapt to the times by developing e-commerce, digital and social marketing, the consumption of experiences instead of of goods, product customization, interactions, purchases, developing a responsible dimension”, explains François-Xavier Leroux, partner at KPMG France, digital and customer manager.

And for that, they need the creativity and agility ofstart-up nation”. “This allows us to tenfold increase our innovation strength,” agrees Anne-Gaëlle Lamort, sustainability innovation manager at Kering. Not to mention an internally expected inspiration effect. To uncover nuggets, dedicated teams from these large groups scour innovation fairs around the world. But the reputation of French luxury is enough to attract applications. For every open session at its Beauty Tech Atelier, L’Oréal receives “around 200 submissions for 10 places via the website, not counting word of mouth,” estimates Sanda Mosanu, L’Oreal’s global head of open digital innovation.

It is, therefore, in these cradles for pampered babies that we come across what tomorrow’s luxury will be. “Those that offer solutions to optimize operations, such as the sales experience, everything related to the authenticity of products, innovative materials, the immersive customer experience – in particular the metaverse, for which luxury is of great interest – and sustainability , for example innovations to track suppliers, etc. », Details François-Xavier Leroux. “These are not future competing luxury brands, but services that may one day meet the needs of luxury groups”, however, explains Thomas Mesmin, partner at Mad, a consultancy in the luxury sector.

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Concretely, what does “acceleration” consist of? “Group employees come to meet us regularly, they give us indications about what they expect from our innovations, experts advise us, we also have training courses”, sums up Damien Hurstel, CEO of Cosmic Shelter, agency that creates immersive experiences for brands, at Maison des startups LVMH, “a crazy experience”.

But above all a true commercial acceleration. “The world of luxury is based on relationships, you have to meet people, at fairs or in this type of program, for example”, underlines Vincent Burgevin, CEO of SkyBoy, a young company that offers augmented reality experiences on smartphones passed on to Maison des startups LVMH in 2018. Yenny Gorce, director of Viver e working differently, an innovative association for the inclusion of people with autism that is currently “accelerated” there, knew how to present her solution “in English, in one minute, in a concise but captivating way, decisive marketing learning” establish test partnerships.

It’s also an opportunity to quickly learn the codes of the luxury sector. “It’s about adopting the ways of doing, thinking and reasoning in this sector. The experience that a luxury customer expects is specific and coded, in terms of hospitality, commitment, personalization, the way of creating the product or service. Properly infusing these elements into an innovation is critical to success in this field,” emphasizes Samah Habib, manager of fashion and luxury at Accenture. Denis Hayoun, co-creator of ShowCase, agrees: “We are in a new field, we need brands’ experience, their perception of our solution. How to recreate customer proximity – crucial in luxury – when they are online? I would not have understood this if the representatives of the LVMH houses had not come to talk to us about it. »

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Marion Cardona is co-founder of Impact Plus, an accelerated start-up within L’Oréal’s Beauty Tech Atelier that helps companies assess and reduce their digital media-related greenhouse gas emissions: “How did we come from the mass, the feedback from experts allowed us to understand luxury standards, for example, to what extent we could lower the resolution of videos without degrading the experience for the luxury consumer. Clara Hardy, founder of Sericyne – a craft company specializing in the production of flat or 3D silk using an innovative technique, which was carried out by the LVMH accelerator in 2018 –, he believes that he has acquired valuable knowledge about “the pace of development of collections and the structuring of luxury homes, in order to identify the decisive actors”.

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In incubators based in France, most of the start-ups are foreign. “The privileged relationships we have with the group allow us to get to know the European market better, but also the French luxury ecosystem, where we want to develop”, underlines Jackie Eagle, vice president of customer experience at Jebbit, an American start-up of data collection -up of L’Oréal’s Beauty Tech Atelier. On the other hand, French start-ups are opening their doors to Asian markets, where the main French luxury groups operate.

For these young structures, the benefit of this support can be a stepping stone. But there are other forms of marriage between large luxury groups and start-ups. “Chanel, Moncler, Kering and Burberry use hackathons, for example, to identify young shoots that interest them”, points out Albane Liger-Belair, associate director of innovation at KPMG France.

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There are also many awards for these innovative companies created by luxury groups: the LVMH Innovation Award or the Kering K Generation Award, which rewards innovation in sustainable development issues in China, for example. Others invest directly in their favorites. In March 2021, Vestiaire Collective, a second-hand fashion platform for luxury goods, for example, raised €178 million, namely from Kering. Some, finally, form partnerships directly. In the same year, Hermès launched an exclusive collaboration with MycoWorks, a start-up of mycelium-based biomaterials, an alternative to leather. And when the passion is total, the marriage can go all the way to acquisition, the culmination of a love story between a large group and a young gunman…

Sweeping helps businesses manage their carbon footprint

The green transition has become a strategic issue for luxury groups. At Maison des startups LVMH, a young essay stands out in this area: Sweep. Co-founded in 2020 by Rachel Delacour and Nicolas Raspal, the Montpellier start-up offers companies a software platform to calculate the evolution of their CO2 emissions across the entire value chain, from production to sale, including advertising and suppliers. . “We collect the data, measure it and thus propose actions to reduce it”, explains Rachel Delacour, for whom “the big emitters are also the big actors of change”.

Rachel Delacour, co-founder of Sweep, a Montpellier-based start-up supported by Maison des startups LVMH. © Sweep

After raising $27 million in 2021, Sweep has just completed another round of $22 million. In addition to LVMH, it collaborates with JCDecaux, Saint-Gobain and HP Inc. And, for the record, the young shooter has just recruited former agriculture minister Julien Denormandie as director of impact. It is up to him to assess the impact of business activity on CO2 emissions.

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