Rising Focus on French Start-ups
Kering, Galeries Lafayette and Carrefour are among large companies broadening their embrace of start-up culture.
PARIS — As the retail landscape changes at an ever-quickening pace, a wide range of French groups are increasingly turning to start-up culture for their own development, from highly profitable luxury groups looking to reduce their environmental impact to retailers rethinking their models in order to stay relevant.
Further encouragement comes from the government, led by French President Emmanuel Macron, who was elected on a platform that famously included a pledge to transform France into a “start-up nation.” Macron, whose popularity is flagging, visited Station F, the start-up campus in Paris, on Tuesday, where he spoke to 2,000 entrepreneurs about attracting talent France.
For Kering, which has positioned itself as a forerunner on the sustainability front in fashion and retail, innovation is key for the luxury goods behemoth to reach its goals in the field. The group has topped a number of rankings on the subject, including three times at the head of the Dow Jones Sustainability Index for its category.
A founding member of the Plug and Play, Fashion for Good start-up accelerator in Amsterdam, Kering added its support to the ChangeNow summit held recently at Station F. The gathering brings together people to discuss solutions for pressing global issues including plastic pollution, education, refugees and clean energy.
Kering has pledged to reduce its environmental footprint, which it measures through an environmental profit and loss account, by 40 percent by 2025.
“Today, if we manage to develop at a group level all of our pilot projects that we have started in raw materials, like cashmere, cotton, wool, or in terms of processes, like tanning without heavy metals, we will manage to reduce our environmental impact by 20 percent,” said Kering chief sustainability officer MarieClaire Daveu.
“So if we want to reach this objective of 40 percent, we have to have disruptive innovation,” she told WWD.
“Innovation is truly central for us — in terms of sustainable development — it’s at the center of our strategy and so we try to be present and take concrete action in different areas,” she added.
Even if the company set up its own materials innovation lab in Italy in 2013, a hub that counts 3,000 sustainable fabrics, it is still important to be tapped into developments elsewhere, or in other sectors, that could be applied to the textile sector or luxury, she noted.
Speaking at the ChangeNow summit, Daveu highlighted a challenge specific to Kering’s high- end industry: the need for the highest quality standards. While there’s a number of promising projects, “the most important difficulty we have is to apply this kind of new thing in the luxury world,” she added.
For Galeries Lafayette, faced with the challenge of reinventing the department store model to secure future business, that entails embracing digital technology, and its Plug and Play accelerator in Paris serves as a way to tap into new ideas.
“We can’t do everything on our own, but at the same time we can’t say we want to go more slowly, because we are not the ones setting the pace,” said Matthieu Caloni, strategy and transformation director for the group. “We need to surround ourselves with good partners to get there,” he added.
Caloni and Galeries Lafayette group chief executive officer Nicolas Houzé last week welcomed France’s secretary of state for digital affairs Mounir Mahjoubi to the sprawling space that welcomes startups taking part in the program in Paris.
Discussing the new projects with people working at the startups, Mahjoubi said he was working to make it easier for them to recruit talent from abroad with a speeded-up process for handling work permits, as well as broadening fast-track permits from specific programming positions only to also include web marketing positions.
Also on site for the minister’s visit was Matthieu Benkerant, head of innovation, ecosystems incubation and acceleration at Carrefour, a sponsoring member of Galeries Lafayette’s Plug and Play program.
The world’s second largest retailer after Walmart, Carrefour is undergoing a broad overhaul and has turned to new technologies as the backbone of its strategy to shore up defenses against the dominance of online giants Amazon and Alibaba.
“Above all, the topics correspond to our short- and medium-term business needs, and also this remains the first and only accelerator focused on e-commerce retail,” Benkerant said. “We were attracted to the accelerator mind-set of a big group, and accelerator expertise brought to address the needs of a big group.”
Like Galeries Lafayette, Carrefour is faced with the need to adapt physical stores to an online era.
“The start-ups correspond to our needs, with real projects we want to put in place,” said Benkerant, citing blockchain technology as a recent development spurred by start-up help. The grocer started using the tracing technology with chicken earlier this year, adding tomatoes, salmon and eggs, with plans to expand it to more products and add geolocation technology.
Experienced Capital Partners, a private equity firm specializing in affordable luxury that played a key role in the development of SMCP group, recently held a roundtable discussion on changes in retail, bringing together heads of start-ups in the food and retail sectors, including the underwear label Le Slip Français as well as Galeries Lafayette’s Houzé and French government spokesman Benjamin Griveaux.
Driving home the point that Macron’s priority is to reduce the cost of work and lower government expenses, Griveaux further stressed the need for large groups to adapt to the background of change.
“Large groups in the clothing sector facing difficulties need to be able to find inspiration from new forms of consumption….Some were perhaps a bit too stuck in their way of doing things without calling themselves into question,” he said.
“Instead they should reconsider their commercial practices, price positioning, ways of doing things, ways of telling stories and generating content, going on social networks, question themselves about digital developments — in short, reinvent their business. That’s not up to the government to do,” the spokesman said.