Crm

LVMH PERFUMES

& COSMETICS

COGNOS EMPOWERS LVMH PERFUMES & COSMETICS WITH ACCURATE AND TIMELY INSIGHTS

INTO CUSTOMERS TO IMPROVE LOYALTY AND SALES

LVMH MoÐ"«t HennessyвЂ"Louis Vuitton (LVMH) was

established in 1987 and enjoys exceptional reputation as a

world leader in luxury goods. The company possesses a

unique portfolio of some 50 prestigious brands worldwide

and is present in 12 countries in Asia (excluding Japan).

Their long-term success is rooted in a combination of

artistic creativity and technological innovation. Its strong

brand identity has facilitated the company’s international

expansion, which today encompasses over 1,700 stores

worldwide. The company is active in five sectors - wines and

spirits, fashion and leather goods, perfumes and cosmetics,

watches and jewellery, and selective retailing.

LVMH’s Perfumes and Cosmetics Group contributed 16%

or €2285m to worldwide revenues in in FY2005. Some of

the leading brands in the Perfumes and Cosmetics Group in

Asia (excluding Japan) include; Parfumes Christian Dior,

Guerlain, BeneFit Cosmetics, Kenzo and Givenchy

CHALLENGES

Loyalty programs are key to the success of any luxury

brand. A well planned and executed loyalty plan aims to

help attract customers and retain existing customers. Very

often, the sales and profitability of a luxury brand is directly

proportional to the success of the loyalty plan. As the

competition for consumer dollar heats up, the loyalty

programs for luxury brands have become extremely

sophisticated.

LVMH Perfumes & Cosmetics Group realised that in order

to remain competitive and tap on the growing consumer

market in Asia Pacific, they needed to understand the

drivers behind its customers’ buying behaviour and their

preferences. And to successfully achieve this objective, the

Group required an effective reporting and analysis solution.

The existing CRM system could not adequately meet

brands’ need for fast, simple yet comprehensive reports and

analyses. It proved inflexible, tedious and time consuming.

As every new query generated a new report, there have been

over 100 reports developed yet requests for new reports

come into discussion almost monthly. The procedure

complicated the reporting process and slowed down

analyses and decision-making on promotions as well as

sales and marketing campaigns.

The group also used Cognos PowerPlay to support its

reporting and analyses requirements. But due to the unique

basket analysis (�Linked Sales Analysis’) requirements and

also the need to turn analysis into marketing actions,

LVMH needed expanded functionalities beyond those

offered by the CRM system and Cognos PowerPlay.

THE SOLUTION

“Our business is driven by customers and our ability to

understand what drives them adds value to our business,”

said Denise Li, IS Project Manager, LVMH Perfumes &

Cosmetics Group, Asia Pacific. “A simple yet comprehensive Business

Intelligence solution would not only

streamline our sales and marketing performance, but also it

would enable us to drill down details and gain valuable

insights into the purchasing patterns of our customers and

allow us to offer better service to them .”

As Cognos already had a footprint within the LVMH

Perfumes & Cosmetics Group, it was a natural choice for

the new project. As a first step, Cognos assessed the group’s

data systems and integration needs. Upon close consultation

with the CRM users, it became apparent that the group

needed a data mart built to extract and consolidate data. In

addition, due to the complexity of the requirement,

modifications and redesigning the existing data cube were

necessary.

Cognos Services team successfully delivered on a proof of

concept in a 10-day pilot test for the group’s CRM users in

Korea, completed in late 2005. Users were able to

experience Cognos ReportNet’s full suite of reporting,

analysis and query