“It’s very simple. In the long-term, customer obsession is the difference between success and failure. With Salesforce’s help, we can put our customers first every time.”
Kristof Lukovich, Chalhoub Group’s Head of Digital, Beauty Vertical
Chalhoub Group’s digital transformation with a laser focus on customer centricity
When most people talk about digital transformation, it sounds like they’re talking about technology. The truth is, it’s really all about culture – people, attitudes, behaviors and beliefs.
With so much focus on technology, it can be easy to forget where people fit into all of this. After all, a digital transformation can only be as successful as the culture behind it.
Headquartered in Dubai, Chalhoub Group is the go to expert partner for luxury beauty and fashion brands in the Middle East.
It manages a vast portfolio of some of the world’s best-loved luxury brands, including L’Occitane, Dior, Tory Burch, Swarovski and Lacoste.
Kristof Lukovich, Head of Digital for Beauty Vertical, knew evolvin these brands couldn’t come from technology alone. For digital transformation to take hold, to be effective and to last, he needed to bring every stakeholder along for the ride, towards the same goal: delighting customers.
Overcoming the fear of failure
Kristof was determined to place customers at the heart of everything they did. This meant going through a period of readjustment, enhancing existing practices and mindsets.
One of the challenges was regional. Self-criticism and openly sharing learnings or failures is relatively unnatural in Middle Eastern culture.
Yet successful digital initiatives depend on being able to move and fail quickly, experiment, take decisive action and pivot.
Equally, the luxury sector is about perfection – a far cry from the scrappy, agile and direct approach Kristof knew he needed to champion.
Digital transformation requires a degree of boldness, experimentation and failure. To blaze this trail, Kristof had to show there was a better way.
“The obstacle was fear and inertia,” he said. “I had to show that making a mistake is perfectly fine – more than fine, it’s important. It enables the organization to learn and grow. To be successful in the digital space, you need rapid and continuous feedback. That’s how you win: test, analyze the outcomes, learn, adjust and move on. Repeat this in fast cycles, and the outcome isn’t in doubt.”
A customer-centric partnership
Before Salesforce, Chalhoub ran various initiatives through its centralised Group level legacy CRM set-up. However, for a company of such size and complexity, this approach wasn’t flexible enough.
To effectively manage the relationship with the customer, the function needed to be embedded in the business.
“Attitudes, beliefs, habits – these all shape team culture,” explained Kristof. “We needed to make customer centricity our cornerstone. It’s the biggest determining factor between long-term success and failure.”
Chalhoub Group settled on Service Cloud, Marketing Cloud and Commerce Cloud to give its employees the tools to put customers first.
Salesforce’s platinum partner Changi helped build the foundations for new customer experiences. The team reviewed available customer, transactional and product data to create a single view of the customer and built it in Service Cloud.
“You can’t do the sexier parts of marketing and communication – loyalty programs, newsletter and emailer campaigns, social media, automations, journeys, triggers – without having the right foundations in place,” Kristof said.
This wasn’t a one-off technology implementation – it was part of a larger change management undertaking. Changi were also there to help Kristof’s team and the wider group make the most of their new cloud based tools.
“Changi helped us embed these into the Group’s business processes and create new services for our customers and brands,” Kristof said. “They continued to support us on our journey to become self-reliant. Changi has been with us at every step of our journey into digital maturity.”
Getting in the habit of moving faster
Getting Service Cloud up and running was key to supporting Chalhoub Group’s digital transformation initiatives, providing the right data to feed the group’s marketing and eCommerce efforts at scale.
“We used Service Cloud to create a golden record of the customer,” said Kristof. “That’s been core to our ability to use Marketing Cloud for our marketing automations, customer journeys, emails, SMS and other customer notifications.”
Salesforce and Changi also allowed Chalhoub Group to embrace the agile mindset Kristof hails as vital for digital transformation.
“We don’t have to wait six months to integrate solutions. Our CRM team in Beauty can take a brand live on Service Cloud and Marketing Cloud in a couple of weeks, with Changi’s support if needed. That was impossible before – credit to the joint effort, Changi’s flexibility and the passionate work of the talented ladies in our CRM team.
“We started with our beauty brands – once we got it right, we opened it up to our Fashion and Joint Ventures verticals. They’ve followed the example we established.”
Thanks to the Mulesoft implementation, Chalhoub Group can move quickly and scale up efficiencies. They don’t have to bear the costs and time required to repeatedly rebuild integrations for every brand separately.
“Service Cloud has become the default solution for our brands that have retail operations – which means Marketing Cloud has also become the default marketing solution,” added Kristof.
Predicting and meeting customer needs
Once the foundations were in place to engage with customers in new ways, through new channels, Kristof made sure the focus stayed on the original goal – delighting customers.
Through analytics, customer interviews and brand engagement, the team set up specific, segmented and automated customer journeys unique to their customers and products.
For instance, “In Beauty I championed thinking in terms of ‘magnet products’,” Kristof explained. “If you put a certain product in your basket, what other products can complement it?”
Understanding this data helps Chalhoub Group hone increasingly personalized journeys and accurate recommendations to customers.
“The intention isn’t to create value sets, but to ensure we improve every day to delight customers who are becoming more and more demanding,” Kristof explained.
“The ultimate goal in luxury is to anticipate the customer’s wants and needs – and respond in their favorite channel, at the time they want it, how they want it” said Kristof.
“We want to give customers delightful experiences, with our luxury products at their fingertips. So we have to listen and adjust. We need our customers to tell us what’s best for them. We need to actively listen”.
One of Kristof’s favourite examples is using WhatsApp as a business channel. The channel is hugely popular among local customers, especially in Saudi Arabia – including for customer care queries.
Working with Changi, the Beauty Vertical quickly created a WhatsApp service channel for some of its brands.
This helped prepare the Beauty Vertical to take on the spike in customer support requests during COVID-19 without a drop in service level. “Our customers appreciated that we could maintain the same quality of service at all times,” said Kristof.
Realising the value of knowing the customer
“The numbers are clear. Whenever we implement Commerce Cloud, we typically see a drop in bounce rate and site abandonment, with improved mobile load times. In a region that’s mobile heavy, that’s already a win. We can calculate the financial value of that,” Kristof said.
“The ROI is positive and the numbers are going up. So we’re in a good place, but I want us to do even more.”
Looking past COVID-19, Chalhoub Group knows more and more of its customers are buying online and engaging on multiple channels.
“Because of COVID-19, more brands are asking us to leverage Salesforce to help them create their own digital strategy,” Kristof said.
“The demand for digital transformation, the right tools to talk to customers and work with them, engage with them and do transactions through eCommerce has never been higher.
“Most companies are considering how to preserve cash, and investing cautiously. But money will keep going into digital – this region will keep moving in that direction at pace. It’s a very, very exciting time.”
“Salesforce has helped us do more and better things for our customers. Since 2018, we’ve executed hundreds of digital initiatives for our brands who appreciate the value of a trusted partner in the Digital space.”
Kristof Lukovich, Chalhoub Group’s Head of Digital, Beauty Vertical