Gucci Owner Kering Uses AI Tools to Help Keep Up Growth

(Bloomberg) --

Kering is equipping sales assistants with new software and using artificial intelligence to better allocate stocks in the hopes that digital tools can keep up rapid growth at brands including the red-hot Gucci label.

Gucci is targeting growth twice as fast as the luxury sector this year, and has said it expects online sales to reach 10% midterm. Kering Digital Director Gregory Boutte said Gucci will be the group’s first brand to use artificial intelligence to decide where to send new products, starting with its European handbag business next month.

A new AI tool could eventually improve the accuracy of sales forecasts across the group by as much as 20%.

Kering’s new mobile app for sales assistants also aims to increase sales, Boutte said. Shoppers spend an average of 15% to 20% more when staff use the software to view clients’ past purchases as well as real-time information on available colors and sizes without leaving the shop floor.

Kering’s online sales have grown an average of 41% per year since 2013, and its biggest brand, Gucci, is more profitable online than in stores.

In a bid to keep capturing more data about customers and to better control their online shopping experience, the company is preparing to take over operating the online stores for brands like Saint Laurent and Balenciaga itself, as it has for Gucci since 2001. Richemont’s Yoox Net-a-Porter currently operates those e-commerce sites as a white-label service, though the deal expires next year.

“The transition will be seamless,” Boutte said. “This is a companywide effort. We want our brands to feel like they own their online business the same way they own a store.”

To contact the reporter on this story: Robert Williams in Paris at rwilliams323@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Thomas Mulier, John J. Edwards III

©2019 Bloomberg L.P.