“I like this combination of creativity and the creative process and the organization needed to … [+]
It is not enough to have a talented designer, you also need inspired management.
Bernard Arnault, founder and CEO of LVMH, has breathed new life into the luxury sector over the past 40 years. After buying a retail conglomerate in 1984 that included the Christian Dior fashion house, he now leads the LVMH empire of 75 iconic brands in fashion, wines and spirits, watches and jewelry, perfumes and cosmetics, and hotels.
Named by Forbes as the world’s richest person in April 2024, the French engineer, whose net worth is estimated at $233 billion, acquired American jeweler Tiffany & Co. in 2021 for $15.8 billion, which would be the largest luxury brand acquisition ever.
LVMH’s resounding success reflects the luxury sector’s enduring strength despite economic ups and downs. Geopolitical tensions, the cost of living crisis and the pandemic have had little impact on its growth.
In his book, The road to luxuryAshok Som, professor of management at ESSEC Business School and director of the ESSEC-Parsons Executive Master in Luxury Management & Design Innovation (EMiLUX), has a simple explanation for this stability:
“As long as there are rich people in this world, industry will always be on the path of growth. The rich become richer with every change in the environment.”
He adds that the increase in disposable income of the rich allows them to cover their basic psychological needs and, therefore, to focus on the search for a sense of accomplishment and status. “It is more or less predictable that the future prospects are bright for the luxury sector and for companies that know how to manage this sector.”
Luxury brands are looking to their future by creating immersive and bespoke experiences for their customers. This goes beyond the product.
“By 2030, consumers of generations Z And Alpha “Business travel accounts for a third of spending in the luxury market. In order not to lose their exclusivity and uniqueness, many brands are now focusing on experiences,” explains Dr. Achim Schmitt, Dean of EHL Hospitality Business School.
By doing so, he adds, brands will be able to strengthen their relationships with their customers, offering them a unique experience without sacrificing their status or reputation. Schmitt cites, for example, “a stay in a Louis Vuitton hotel suite, a chocolate tasting in a Cartier boutique or a stroll through Chanel vineyards.” The experience becomes more unique when luxury brands come together to combine their riches.
“Our students learn to understand what makes a product a ‘luxury’ product and they develop a … [+]
Luxury brands are also partnering with business schools to advise and co-develop the skills the industry will need in potential employees in the future, and to provide students with real-world work experiences and networking opportunities.
EHL has more than 30 companies within its EHL Alliance – an exclusive global network including major brands such as Four Seasons, Rothschild & Co and LVMH. “Such collaborations not only enrich our programs, but also pave the way for rewarding careers for students,” says Schmitt.
Professor Fabrizio Maria Pini, director of the International Master in Luxury Management at POLIMI Graduate School of Management in Italy, echoes Schmitt’s thoughts:
“Being exposed to such companies in a privileged way through case studies and classroom presentations is a unique opportunity for students to showcase their potential in front of potential future employers.”
In partnership with Italian luxury retailer BULGARI, the program delivered jointly with France’s NEOMA Business School prepares students for a variety of roles, including product manager, merchandising manager, buyer or supply chain specialist.
Almost half of the Master’s internships take place in the luxury, fashion and lifestyle sector, at Chanel and Richemont. For Elise Argente Linares, one of the highlights of the program is “the incredible opportunities it offers in terms of close collaboration with brands such as the Prada group and Taittinger champagne, as well as with high-level speakers.”
These partnerships play a vital role in attracting candidates to such programs, promising an invaluable learning experience as well as knowledge and connections that graduates can use throughout their careers. Victoria Metzger, a graduate of TUM School of Management Munich, credits the opportunity to present her project to BMW Group CEO Oliver Zipse during her Master of Management and Technology program at TUM with being instrumental in securing her current position at the BMW Group.
She remembers attending a seminar on innovative automotive production, with Oliver Zipse as the keynote speaker. He asked the students to develop concepts to address real-world challenges facing the BMW Group and then present their ideas to him. “This is something you can never learn in a traditional course, and it gives you the best preparation for your professional life,” she says.
Viktoria’s team developed an idea for a smart urban navigation system with a focus on sustainability. The three students were mentored by two BMW employees who helped develop the idea, guided us through the process, and prepared us for our presentation to the CEO. “This is something you can never learn in a regular course,” she insists, “and it gives you the best preparation for your professional life.”
“I had dreamed of working for BMW since I was a child – and I considered TUM to be the best place … [+]
After completing her Master’s degree at TUM, Viktoria started working in Direct Purchasing at BMW Group and is soon planning to take up a new position in Direct Purchasing for Rolls-Royce Vehicles in May.
A common theme throughout the luxury learning process is the adoption of a hands-on approach, requiring students to put into practice what they learn in the classroom.
“Your job is not about glamour,” says Dr. Achim Schmitt, “your job is to make someone else experience glamour. This small change in mindset is very important for our students. They learn to understand what makes a product a ‘luxury’ product and they develop a greater appreciation for the product or service associated with it.”
Laura Smadja Buchard, EHL alumna and Marketing and Communications Director at Pomellato, explains that the final-year project allowed her and her classmates to create and lead a project from its inception to its delivery to the client – a true industry undertaking. “This experience not only honed my strategic thinking skills, but also allowed me to dive deep into the culture and operational nuances of a brand,” Laura explains.
Beyond acquiring practical skills, these experiences also help students develop the mental resilience needed to keep up and succeed in an often high-stakes environment. Shima Shiozawa, Marketing Manager at AIG in Japan and an ESSEC alumnus, says, “The ESSEC experience taught me how to work effectively under pressure, add value to a team, and handle higher levels of responsibility.”
And this value extends beyond the basics of getting the job done, but also helps the industry continue to adapt and respond to generational shifts and global concerns.
According to Professor Fabrizio Maria Pini, “the demand for a more conscious, culturally rooted and sustainable form of luxury will be a fascinating new world to explore.”
Sustainability is a key focus of the specialized Masters offered at the TUM School of Management, including the MSc in Consumer Sciences which is designed with a data-driven approach to better understand the consumer and their changing demands.
“Understanding the data that reveals customer preferences enables companies to better design products that match those preferences,” says Gunther Friedl, dean of the TUM School of Management.
“We also see new developments in AI playing a big role,” he says. “The large language models (LLMs) of generative AI that we’re introducing into classrooms are completely changing the way marketing campaigns are designed.”
These advances in generative AI are opening up exciting new opportunities for innovation and efficiency for groups like BMW Group and LVMH. But they also come with challenges and risks, and LVMH has partnered with Stanford University’s Human-Centered Artificial Intelligence Institute (HAI) to explore applications of AI technology across its business.
“Artificial intelligence is a powerful technology,” said Antonio Belloni, CEO of LVMH Group. “We recognize the value it can bring as a support and complement to human talent, emotions and creativity, which are at the heart of our houses.”
With this mix of innovation and talent, business schools and luxury brands are natural partners in shaping the future of the industry.
