Luxury in Transition: Embracing Digital Innovation with Professor Sonja Prokopec S4 I Ep5

In this insightful episode of the Career Transitions Podcast, we welcome Sonja Prokopec, Associate Dean of Faculty at ESSEC Business School Asia-Pacific and an internationally recognized expert in luxury marketing. With over 12 years of experience leading the LVMH Chair and as the current Academic Director of the Academy of Luxury at ESSEC, Sonja shares her expertise on the evolving dynamics of the luxury industry.

We explore how digital transformation and artificial intelligence are reshaping the luxury landscape. Sonja discusses the impact of these technologies on omni-channel experiences, customer personalization, and the future of luxury retail. She emphasizes the irreplaceable value of the human touch in delivering authentic luxury experiences, even in an increasingly tech-driven world.

Sonja also offers valuable insights into the skills needed for professionals in the luxury industry, highlighting the importance of integrating technical proficiency with creativity, communication, and cultural competence. Whether you're a professional in the luxury sector, an aspiring marketer, or someone curious about the future of luxury, this episode offers a wealth of knowledge and practical advice.

Key Takeaways:

• The role of AI and technology as supportive tools in enhancing, not replacing, the luxury customer experience.
• How the luxury industry is adapting to digital transformation and the rise of omni-channel strategies.
• The importance of soft skills, such as creativity and emotional intelligence, alongside technical expertise for future professionals in luxury marketing.
• Emerging trends in luxury marketing, including the growing importance of sustainability and community engagement, especially for younger consumers.

Connect with Sonja Prokopec:

• LinkedIn: Sonja Prokopec
• ESSEC Business School: ESSEC Asia-Pacific

Connect with us on LinkedIn:

· Vanessa Iloste (Host)

· Vanessa Teo (Host)

· Aaron Wu (Producer)

Transcript

[00:00:00] Vanessa I: Welcome to our new episode in the Career Transition Podcast. On this episode, we speak with Sonia Prokopec, Associate Dean of Faculty at ESSEC Business School Asia Pacific. She is a professor, a thought leader, and a marketing expert in the luxury industry. 

[00:00:21] Vanessa T: On this episode, Sonia speaks about the future of the luxury industry from the evolution of digital transformation, the omni channel customer experience and the need to preserve the personal touch and the quality of the luxury experience.

[00:00:35] Vanessa I: She shares a thought about what it takes to be a successful professional of the future. One who can integrate both hard and soft skills to deliver an outstanding customer experience. Don't miss this episode.

[00:00:56] Vanessa T: Welcome everyone to the next episode of the Career Transitions Podcast, the podcast where we explore what it takes to successfully navigate through career transitions, no matter which stage of life or career you're at. 

[00:01:09] Vanessa I: Today we are thrilled and honored to welcome Professor Sonia Prokopec to our show.

[00:01:14] Sonia is the Associate Dean of Faculty at ESSEC Business School, Asia Pacific. She's also a globally recognized expert in luxury marketing, having been the professor in charge for the LVMH chair for over 12 years. Currently, Sonia is the academic director of the Academy of Luxury in Asia within ESSEC.

[00:01:36] With a deep understanding of consumer behavior and the evolving dynamics of the luxury industry, she brings a wealth of knowledge and insight into how the future of work is shaping this exclusive sector. Welcome to the show, Sonia. 

[00:01:50] Sonja P: Thank you so much for your kind introduction and for having me. I'm really happy to be here and to talk about this super exciting topic with you.

[00:01:57] Vanessa T: Let's dive right in. So, Sonia, the luxury industry has traditionally been one that's very reliant on personal in store experiences. Well, how do you see the future of work transforming this aspect of the industry, particularly with the industry embracing artificial intelligence? 

[00:02:15] Sonja P: That's a great question, Vanessa.

[00:02:17] I'm still a firm believer in the fact that AI and technologies in general will really just be complimentary to the luxury industry. Of course, AI can play a very supportive role. There are many things that it can help with. I think fundamentally luxury is still really an industry where the human touch is extremely important.

[00:02:39] I think that's the part that really drives that emotion. And maybe AI can just improve the process, increase the efficiencies, but not really replace the process in its entirety. 

[00:02:51] Vanessa I: I also believe that the human touch is difficult to replace. We see that every day. So it's another question we had prepared for you, which is complementary to the previous one.

[00:03:01] With the rise of digital transformation, how is the luxury sector adapting to these changes? And what impact does this have on the skills required for future roles in the industry? 

[00:03:12] Sonja P: The digital transformation has been very slow comparison to maybe some other industries. Maybe over reliance on human touch historically, but of course, all of that changed with COVID where the luxury industry really just catapulted in terms of the transformation and a lot of aspects have now become not just a nice to have, I would say, but a must have.

[00:03:37] Of course, we have significantly more development in e commerce. An omni channel, this word omni channel, I would say is still relatively loose in the lecture industry because we know that most of the companies really still function on a multi channel rather than an omni channel approach. But for example, let's say e commerce expansion is an important one.

[00:04:00] We talked about experiences. I think personalization and customer engagement that can be through the use of technologies, through the use of big data, of AI, of VR, AR, all of these different things that are happening more actively in the luxury industry, of course, you have things around sustainability, transparency around the communication of where the products are coming from, sourcing, all of that.

[00:04:27] So I would say in terms of skills. Of course, I would say you have the technical skills and, uh, digital proficiency, which I think it's a really nice set of skills that are sought after in many roles. But you know, as we already said, there is something to be said for things that are not only around the technology, right?

[00:04:46] So for example, creativity in marketing, creativity is extremely important, but it can also be important in the retail. In client engagement, in client telling, anything client facing could be a very valuable skill. And communication, global perspective, being able to communicate across different teams, being able to connect with a customer who might be, you know, a global customer.

[00:05:11] As important as these hard skills that we see are emerging more, but not necessarily at the expense of the soft skills, right? I think that's an important one that I always tell my students, just because you're digitally savvy doesn't mean that you will actually be able to be successful once you're in the role, because what will get you to the next role is going to be more your soft skills, you know, and your ability to communicate, ability to work across teams and across cultures.

[00:05:39] To be client centric, for example. That's how it's saying in terms of skills and also kind of my approach to what we try to tackle in the classroom. 

[00:05:48] Vanessa T: Sonia, I like what you talked about, this integration of soft and hard skills, which is quite a common theme that we're hearing across industries. That even if technology was going to take over some parts of our jobs, there will still be a really important aspect, as you've pointed out, even in the luxury industry, where technology will not be able to replace. So that brings me to my next question around marketing strategies and how it's also evolving with technology. What do you see as some of those key trends in luxury marketing? And what do you anticipate as some of the big things that the future of work for marketeers will see coming? 

[00:06:24] Sonja P: Yes, the trends is something we speak about very often in the classroom.

[00:06:29] I try to really incorporate that into all my sessions. For example, one of my students works at BCG, exactly in the luxury team, and she's responsible for the luxury report that they publish. So this year through the use of technology, luckily. I had her through Zoom presenting 10 trends that every CEO should know about in the luxury industry.

[00:06:49] And we spoke about many different things that are happening, very similar to what we are seeing where technology is helping is that also consumers are expecting more personalized content, especially we see this with younger consumers. They're expecting to have custom products, custom experiences. We're seeing this with high net worth and ultra high net worth consumers.

[00:07:12] And I think that's a group that's growing more and more in importance. And so similarly, we'll see this kind of divide between what the young consumers desire and a way to engage with them, which is not necessarily exactly the same as the way to engage with the high net worth and ultra high net worth.

[00:07:31] And that agility actually to be able to handle these different markets is also quite a challenge for brands that cater to both sides of the spectrum when we speak about the luxury market. Omnichannel is not there yet. The report really confirms this, that about 50 percent only of luxury consumers are satisfied with what the experience they're getting.

[00:07:55] There are a couple of things there. I think, you know, one of them is definitely not being able to recreate the dream or that beautiful experience you talked about, Vanessa, you know, in the beginning, because you don't have those emotional ways to, you know, transmit the emotions in e commerce, let's say experience, but it's also sometimes just pure functional processes that might not work to create that sense of flow that at this stage a customer expects.

[00:08:22] So these are, for example, some of the things, you know, that we are seeing in terms of trends, where luxury companies are putting in a lot of efforts to improve. I think it also depends on whether we're talking about which market we're talking about, because some markets are more advanced than others, in terms of omni channel strategies and the expectation of the consumers, but these are more global trends that we are seeing.

[00:08:46] Of course, then, you know, the expectation, especially of the younger consumers. around sustainability, ethical marketing, and really this kind of values driven perspective, which we don't necessarily see resonate the same way with the older consumer, more experienced consumer, and you know, the consumers who are, let's say, high net worth and ultra high net worth categories.

[00:09:10] Vanessa I: That's a very good point you're making. Sonia, we can see it very strongly in the world of beauty, the importance of looking at sustainability, looking at purpose, looking at CSR. What would you say the, the branch should do to adjust their marketing strategy in order to stay relevant and engage effectively with this new customer?

[00:09:29] You already mentioned ideas, are there some other ideas you would like to explore with us today? 

[00:09:35] Sonja P: Yeah, I think you really mentioned this word community. I think that's a word or you know, a concept that really resonates very strongly with the younger consumers. My students who are in their early twenties to mid twenties in the classroom and how they engage with the luxury brand.

[00:09:53] It's really very much around the community that they can connect or create this sense of values or purpose or from coming from another perspective, but really being able to speak and engage with them. Of course, these guys are complete digital natives. So you're absolutely being in that space and in a highly relevant way.

[00:10:14] They are very big on experiences. If the brand is not able to deliver an experience in a way that, again, is very relevant to the generation, that doesn't create trust and doesn't build that sense of belonging and community. So. Of course another way to create this through the social media, but I think you can also think about creating it through events which are, for example, infused with digital tools, but not overtaking the experience.

[00:10:43] Even if they're extremely digitally native, some connection with them is highly relevant. 

[00:10:48] Vanessa I: I've seen that recently when we did the launch for Fenty in China, that was a very, very high quality pop up in the middle of Shanghai. I've seen actually the customers enjoying so much, you know, the quality of that pop up, having really a lot of fun and spending around 20, 25 minutes in that space.

[00:11:05] And I think it was providing them with a lot of joy, a lot of happiness. A lot of smiles, I believe in what you were saying in terms of, you know, making this experience very, very tailor made to their generation and thinking very deeply about what you are trying to achieve. I really, uh, can resonate with what you were saying today.

[00:11:23] Sonja P: I think your example of beauty industry is the most relevant one when we talk about catering to the next generation, because this is a sector that is the most accessible to them, the one they can connect the most with, right? And so I think that the brands in the beauty sector are the best example in terms of how to be relevant to the younger generation, how to really engage with them and also how to build communities, how to bridge the new technologies with the high touch experiences.

[00:11:55] The beauty, I think is really the best in class to talk about this kind of, you know, trends and younger consumers. 

[00:12:02] Vanessa T: These trends are moving at such a fast pace. And this brings us to our next question. As we think about the future of the industry, what skills do you think are going to be most crucial for professionals in the luxury industry to develop?

[00:12:14] Sonja P: It goes back to maybe what I was mentioning before. So I would say definitely in terms of hard skills, I would say we're talking about, of course, being incredibly strong and understanding of digital marketing. Data analytics, I'm very happy to see more used by the luxury companies in terms of being able to have access to data, knowing what to do with that data, hiring data scientists to gather insights and put it back into the marketing efforts, which was maybe not the case historically.

[00:12:49] Now you see more and more companies adopting this and hiring along these lines. As I said before, e commerce training or understanding on how to manage online platforms, how to create a good customer journey, how to really make sure those functional levers are there and then trying to elevate that emotional experience.

[00:13:12] That's also a really important aspect. A lot of times these are outsourced, not necessarily managed in house, and I think probably the trend will be that they will need to be managed in house because like in digital marketing, initially everything was outsourced and now, you know, it's all in house because that's the only way you can really preserve your brand desire and increase it and be really connected, right? 

[00:13:34] AI understanding of, you know, what AI can do, how you can embed it into different, different processes. So these are more around the hard skills, but I think fundamentally, we also need to really focus on soft skills and especially younger students who are entering this need to understand this industry that a whole person is very important.

[00:13:57] How you do your job is not just about the technical efficiencies or having the technical know how. It is being able to communicate with others, be collaborative, have this emotional intelligence, adapt to different situations and different cultures, adapt to different changes. Be flexible and grow as a person.

[00:14:17] And I think that's something I really advocate, you know, is having this growth mindset, a really fundamental way that you'll be able to be successful. Another thing that I think in the luxury industry is very important and I would do myself a disservice by not mentioning it, is to understand how do luxury brands How are they managed?

[00:14:37] You know, because I think to manage a luxury brand and what works in a luxury industry and what doesn't work is very important. You could be the best marketer in, for example, P&G and have a really strong fundamentals. But actually a lot of those things might not work if you are working at Dior or at Vacheron Constantin.

[00:14:56] There are certain principles that are applied to managing a luxury brand. They just do not work. There are just completely opposite, polar opposite in some cases or totally not taught in a classical marketing job. So I think that's also something that you really need to have in order to exist and exist successfully in the luxury industry.

[00:15:17] When I talk about soft skills, maybe one more thing that I could add there and it's really this cultural competence also, like, you know, being able to work with different people and later lead these people as you like evolve in your career and being able to make sure you motivate them, you understand where they're coming from.

[00:15:36] You relate to them, regardless of the culture they come from. I see this as a really important trait. 

[00:15:42] Vanessa I: I was very lucky, Sonia, to be invited as the guest speaker in your classroom. I found your approach very touching, actually. The moment you enter the room, your students are very attached to you. They feel very comfortable in your presence.

[00:15:56] I wanted to ask you, what is the philosophy you have that is maybe unique compared to other professors?

[00:16:02] Sonja P: I wanted to talk a little bit about that. It means really a lot to hear you say that. I've been at ESSEC for 17 years and I have to say that that's actually a philosophy that exists at ESSEC that I adopted and then maybe enhanced slightly to this notion that I want my students to really know everything about the industry before they enter the industry.

[00:16:27] I live and breathe this approach. Our idea behind this approach is that we show, we don't just tell, and we show in many different ways. And we want our students, when they get into their first jobs, to be ready to hit the ground running. I would say that's our philosophy and a lot of my colleagues share this philosophy.

[00:16:48] And so now I think that in many of my students love these experiences. Again, it goes back to my notion on how do you help with developing and instilling a growth mindset? We do this through guest speakers. Another thing that I do is industry projects. Every year, every class, I will bring in a company that will sponsor a project, and also we do this at an ESSEC level, but I also do it within my course.

[00:17:16] So I've done projects, this year, for example, we did with Longchamp. Last year, I did three projects with Macallan, with Vogue, and with Tiffany's. The year before, I did it with Asian Civilization Museum, and we did it with Benefits. I really try to bring in a relevant consulting project and somebody who is sponsoring this project for them to work on this.

[00:17:40] Then, for example, I'll bring somebody who will speak about trends. So either, you know, this year we had the BCG speaker. I sometimes have agility research managing director, Amrita Bantal, who comes and shares. I am always open to mentoring. I met anybody who seeks out mentoring. I will at least spend one good meeting with them.

[00:18:01] And if they seek out more, I will be there for whenever they need. I love this part. It's just part of how I function. And, you know, maybe why I chose this profession in the first place. And maybe the last thing is even around how I give feedback. I try to share this with them in terms of, for example, leadership or, you know, managing people, give feedback freely, but give it at the right time and give it in the right way.

[00:18:27] So instead of, for example, waiting for them to complete their project at the end. When they can't do anything with my feedback, they just get it and it sits there passively. I will give a lot of feedback throughout the project. So they'll have at least one or two check ins with me where I will give them feedback and things that they can improve on.

[00:18:46] Many of them welcome it. They're very keen to get it. It results in much better final project. So these are the different ways that I try to engage with them. I love my job. It's really a pleasure for me to do it and, and I'm really happy to hear you say that you can see that because yeah, that's a highlight for me.

[00:19:06] Vanessa I: Yeah, you can feel it the moment you enter the classroom. So I think you're doing great jobs as a professor. And one of the things that inspires me as well is the idea of reinventing yourself. You know, you are always looking for something new. You were talking about this industry project, you are not choosing the same brands all over again.

[00:19:26] You are very wide, like even as Asian Civilization Museum, which is also a luxury experience, but maybe a little bit out of the box in terms of thinking. I think the future of work is also around that, is this idea of agility. This idea of also iteration, this idea of, you know, trying new things and seeing among all the projects you have done, which one is making more sense for these students versus other or for the companies that they are working or for others.

[00:19:51] Thank you so much for being a great professor for the community. We are all benefiting from it. So, uh, for the listeners who are considering a career in luxury marketing, what practical steps can they take to future proof their career?

[00:20:05] Sonja P: I would say two main ways. One is, in my opinion, I'm sure there are more than two, but you know, I would focus on two.

[00:20:11] So one, I think is all about really continuous learning. This can be done by really learning on and reading the industry reports, being really up to date. And I even say this to my students, you know, when you're preparing for jobs or interviews, make sure you're really up to date on what's happening, not just in the industry, but in that particular sector, right?

[00:20:34] Of course, we talked about technology. So, you know, if you can upscale yourself in certain technologies, by all means, you know, and they feel natural to you and something you want to do more of. Do that. Of course, if you are either new in the luxury industry and trying to get a better understanding of what it means to work in luxury, one of the key things is some mindset, a different mindset, and not necessarily only about the price, but the approach is totally different.

[00:21:03] If you are either in the luxury industry, but an early stage, or you are, for example, a Looking to switch careers and enter a luxury industry. We have created a certificate of five days, which is placed under our Academy of Luxury. I did this exactly with the needs of the market in mind, because I saw that there's really nothing for those who can get educated, who want to get educated and upskilled.

[00:21:29] Enter or get a better understanding of the luxury industry. It's a very immersive, very experiential program of five days where we focus on the industry. We look at all the sectors, but we also look at everything from understanding how branding works. So understanding who the consumers are, or understanding, you know, different experiences you could have in luxury and experiencing some of them.

[00:21:52] Because again, We don't want to just tell, we want to show you, right? Understanding what is luxury retail and how to create a brand experience. Understanding, you know, what is the lifestyle of the high net worth and the ultra high net worth, because you might have to think about that consumer. And a lot of times you might not necessarily know on their preferences or their way of life.

[00:22:14] So really try to kind of cover all key topics in these five days and allow you to enter this world for a very immersive educational journey. We do this twice a year. So I would say, you know, from an upskilling perspective, those are some of the ways. Then at the same time, it's also about trying to do anything practical that you can put on your CV.

[00:22:37] So of course, education is very important, but it could be even, let's say, a younger person. Are you open to having an internship instead of a job? There, you are much higher chances of entering the industry to an internship. Can you volunteer? Can you upskill yourselves through some other things? For example, if you are interested in jewelry sector, great idea to do a gemology course. Showing on your CV any practical way that you are passionate and interested into this industry and into the sector you're targeting.

[00:23:10] I think you talked about exactly the same to my students in the classroom. You don't have to show that you have a master degree in this. You need to show that you have passion around this and you have committed yourself to this industry and you are showing this to various practical ways or courses or short courses, certificates you've done to really indicate that this is something that you have a deep interest in and then HR will see that and they're more likely to open doors to someone like you.

[00:23:41] Vanessa T: We love what you've just talked about, that continuous learning, both in the classroom in a formal way, but also through practical skills and constantly upgrading yourself. Sonja, these are really themes that are so important as people look at making career transitions. And so with that, we wanted to thank you so much for coming on the Career Transitions Podcast and sharing your valuable insights with all of our listeners. Thank you so much. 

[00:24:08] Sonja P: Thank you so much for having me. It was such a fun conversation.