Luxury Brands, Technology & Operational Efficiency


Shubho Chatterjee | May 04, 2015

Senior Business Transformation Leader, Shubho Chatterjee believes that winning enterprises will use technology tactically in all parts of the business

Senior Business Transformation Leader, Shubho Chatterjee believes that winning enterprises will use technology tactically in all parts of the business.

In part one of this series, we considered the present global economic challenges, and proposed retail and digital integration as enablers towards enhanced competitiveness for the luxury players. Part two will explore technology and user-experience focused design, to provide salient ideas for enhanced luxury experience and product and process superiority.

Technology is indispensable for all businesses today. The winners will continue to use technology strategically and tactically in all parts of the business. In this segment, we will discuss technology broadly from the following perspectives: product life-cycle management- design, demand planning, manufacturing, service; analytics and big data, wearables, and personalization.

Today, 3D CAD based design environments are commonplace, as is the use of 3D printing for creating prototypes in jewellery and other industries. Missing is the full 3DCAD-3DPrint scaled production capabilities. This area has a tremendous potential for disruption, especially in the jewellery industry. Personalization is possible with 3DCAD and 3DPrint technologies.

“ 3D Printing offers tremendous flexibility for manufacturing planning & control ”

While Platinum-based products, in jewellery, are difficult to 3D print, as of now, due to high material melting point, other lower melting point metals, such as, Silver, can be used today. 3D Printing offers tremendous flexibility for manufacturing planning and control due to the ability to run different designs and batch sizes per run.

Short-cycle manufacturing is truly feasible with this technology and can be very effective in the fashion jewellery where short product life-cycles are the norm. It is not unusual for Luxury retailers to carry large inventory (and investments). In jewellery, I have observed inventory levels at about 16%-19% of market capitalization. Opportunities to reduce inventory levels across the entire supply chain are possible by accurate demand planning and replenishing to actual sales.

Monthly forecasts based on historical data are often inaccurate and lead to mismatched demand release quantities and schedules. Inaccurate product orders and quantities are released and manufactured, shipped to stores that don’t need them, with stock-outs occurring elsewhere. Tightly integrated demand planning and ERP systems and the use of 3D Printing, where possible, can alleviate this situation; done properly, this will have a tremendous positive impact on free cash flows.

Ringly creates accessories that connect to your phone

There is a plethora of customer data being generated today: customer web comments; webmail, POS transactions, returns and defects, social media discussions, web searches, and customer letters, among others. Big data and analytics can be very effective in integrating customer intelligence to Marketing, Design, Manufacturing and Supply Chain, and Service. Today’s data silos – Marketing, Operations, Finance, etc. – really need to be integrated into a competitive and strategic asset for a company.

This will help the individual departments into synergistic planning and execution, and enable personalization of information, products, and offers by customers. The synergistic impact of flexible manufacturing, superior demand planning, with exceptional analytics is truly a differentiator – these big and audacious goals will separate the best-of-the-best in Luxury from others.

The last discussion item is of Wearables in Luxury fashion. Readers are familiar with Google Glass, Apple Watch, and FitBit (body sensors). However, some of the most interesting and latest developments in this area include: flexible solar cell use in clothing to charge smartphone, bangles/rings with keys, illuminating dresses with changing colours based on ambient light. Ringly uses a notification on a ring to connect to the phone and send customized notifications via vibration and light.

“ Innovations in wearable jewellery & clothing is both exciting and revenue generating ”

Given the large addressable market, innovations in wearable jewellery and clothing is exciting and revenue generating. The Luxury market can lead by exploring and investing early with smart test launches, especially for fashion products, jewellery and clothing. In summary, some of the key technology business differentiators include:

- 3DCAD or 3DPrint design-to-production capabilities, where applicable.
- Tight coupling of Demand Planning and ERP systems with actual sales driven replenishment – similar to Lean Manufacturing Systems.
- Integration of data silos to link customer intelligence and requirements, purchase and social habits, design, manufacture, and service.
- Exploration and investment in wearables.

User experience cantered design is a process in which the needs, wants, and limitations of end users of a product, service or process are given extensive attention at each stage of the design process, manufacturing, and service. For a holistic customer interaction to a product or service, we provide the following simple scenarios to extend the concept:


- Customer visits a website – is the website and process flow design in the best interest of the customer? Is the information accurate and valid? An example of incorrect information is discrepancy between store inventory availability and that shown on the website for the store. Is there an experience based design process in place?

- Customer visits a store – is the store design, the environment design, staff interactions, information friendliness, information consistency at POS, etc. considered from a user experience?

For example, during Christmas and other seasonal holiday times, stores are jammed, particular high customer traffic areas are extremely uncomfortable due to store heating/cooling, and ventilation settings, and customer density. We have all experienced similar situations of kids crying and uncomfortable parents, with many deciding to leave without a purchase.

“ Customer density & traffic flow should be considered in store design & simulation ”

Thus, customer density and traffic flow should not only be considered in store design and simulation, but technology, such as learning thermostats (from Nest Labs, Google), considered for better and faster control of the environment. These learning systems can predict/follow store traffic and effectively alter and monitor temperature settings effectively.

Holistic design considering multifarious design parameters will always help in superior customer experience.

• Distribution – Is the Distribution and shipment process design based on user experience? For example, it is not unusual for a very expensive product to be left on a customer’s home or apartment door without notification. What if it were stolen? User experience cantered design can very simply solve these poor designs.

• Product Design, Manufacturing and Supply Chain (PDMS) – Is the entire process capable of performing to two different product life-cycles prevalent in Luxury: (i) fast fashion (high product volume, low cycle time), and (ii) large cycle time and lower product volume. In jewellery, fashion jewellery exhibits the first category while fine and statement jewellery is an example of the latter.

“ Integration of technology with appropriate user experience based design can be a business differentiator ”

Are critical-to-quality (CTQ) attributes captured during the design stage and is the entire PDMS process risks identified and mitigated against the CTQs? Also, is Quality built into the design and manufacturing process to minimize end-of-the-line inspection? Current processes are mostly not designed with two product life-cycle variants in mind; doing so will make a company more productive with larger impact on operating margins.

- Risk-based management – Are process and product risks considered during product design, manufacturing, and service? For example, how can counterfeit risks be identified and mitigated against during the design process; or the risk of meeting manufacturing defect rates between two design alternatives.

- After sales service – Is the after-sales process designed for user experience? Is there a tight integration between front-end CRM and Service systems to ensure all appropriate customer and product information is available? Are the service requirements captured accurately at the point of interaction with the customer (store, website, service centres) and communicated accurately to the service facility? Are Quality checks completed to requirements?

The above scenarios show how integration of technology with appropriate user experience based design can be a business differentiator. Part III of the series further explores the leadership necessary to enable the above ideas.

To further investigate technology on Luxury Society, we invite your to explore the related materials as follows:

- Integrating Luxury Retail Online & Offline
- Consumers Are Looking For Smartwatches From Their Favorite Luxury Brands
- Recommendations for Digital Luxury Marketing in 2015

Shubho Chatterjee

Vice President

Shubho Chatterjee is a proven and successful Senior Business Transformation Executive with an accomplished record in developing strategies and implementing profitable business-transforming solutions in Fortune 500 and start-up companies. A visionary and strategic thinker experienced in leading large-scale high performance technology-enabled projects with multi-billion dollar product revenues. Adept in turnarounds and M&A of private and publicly-traded companies, and P&L management. Combines business strategy, customer intelligence and planning, technology, organizational leadership, change management, analytics, and operations skills in profitable business outcomes. Diverse experiences in Luxury Retail, Manufacturing, Health Care, Consulting, and Telecommunications industries. Ph.D in Engineering. Registered Professional Engineer. Specialties: Change Management, Corporate and Business Unit Strategy, Customer Intelligence, Quality Management, Enterprise Analytics, Business Process Outsourcing, Technology Service Development & Delivery, Merger and Acquisition Integration, Operations, Manufacturing, Supply Chain,Product Management, Domestic/International IT Management, Consulting. Key Impacts: Strategic: Conceived & implemented: Global Quality strategy for Tiffany and Company with 5-10% yield & 2% manufacturing OM impact. $6M+ Technology strategy at Miami Jewish Health Systems (MJHS) with a 33% operating cost improvement. Technology: Migrated legacy to cloud & with automation reduced service TAT by 60% at MJHS. Led eBusiness initiatives at Quest Diagnostics generating a $1B yearly revenue stream. Implemented 100% synthetic diamond detection at Tiffany and Company. Operations: Implemented TQM, QMS, & Six Sigma at Tiffany and Company. Effected 70% operations cost savings at Quest Diagnostics. Managed operations & systems integration for a $450M acquisition. Customer Experience: Implemented a 360° customer intelligence system with 10% improved product quality & reduced sku’s 5%. Created a technical specialist organization to support eBusiness sales at Quest Diagnostics.

Data | Jewellery | Technology