How Hammitt’s Early Cloud Bet Unleashed Luxury Growth
The luxury goods market is expanding at a lively pace. Products once aspirational and out-of-reach for most are now topping wishlists, particularly among younger demographics.
In fact, it’s mostly Gen Z and Gen Alpha consumers fueling growth, with researchers predicting future shoppers will purchase their first luxury item at an average age of just 15 years old. It’s also an industry that’s proven mostly recession-proof, with global sales of personal luxury goods leaping by 22% in 2022, according to Bain & Company.
As a growing brand within the prestige goods space, handbag and accessories company Hammitt needed a tech stack to support swift expansion while improving associates' ability to work seamlessly and intuitively — even if they didn’t have a particular tech responsibility within the company.
CGT caught up with Hammitt founder and CEO Tony Drockton to discuss how luxury and technology go hand-in-hand, and how the brand's early ERP investment enabled it to develop a holistic, integrated business system across finance, product development, customer relationship management, and fulfillment.
‘Kernel of Truth’
Drockton is a longtime proponent of Cloud technology. Shortly after setting up shop in 2008, the Hammitt team sought a system eschewing analog, on-paper systems in favor of organizing data into a space where it could be “manipulated as needed in order to grow.”
Cloud was a fairly new technology at the time, and Hammitt partnered with NetSuite. “The first thing I said was we must find a way to organize our back end. … I knew the Cloud was the future, so I jumped right in with the Cloud as our ERP,” Drockton says. “That was the first piece of software I put in place before our website.”
Over the years, the CEO has hired strategically to find people who can work with the technology rather than making it work for them, noting that it’s more effective for companies to stage their processes around what the tech is already doing.
“For somebody that’s never worked in an ERP, they don’t understand what you need to do first, second, and third [to] really power performance,” he says. “But once people buy into it, you can really go fast.”
Over time, Hammitt has also pruned away ancillary plug-ins and now uses the ERP to fuel specific areas of growth. In product development, for example, the CRM gathers consumer data at different points of the lifecycle and uses them to influence designs for future collections.
They’ve also successfully leveraged it to bust down their data silos — synchronizing the data under a single umbrella that can be manipulated within departments’ business intelligence platforms.
Currently, Hammitt bags and accessories are sold in over 850 stores across the U.S., including retailers Dillard’s and Von Maur, as well as their Southern California flagships. Digital sales are also up, along with DTC, which now makes up around half of the brand’s overall sales.
Investing in the ERP has served as the brand’s “kernel of truth” to provide total visibility into the business, increasing productivity, efficiency, and decision-making.
This visibility was particularly beneficial during the pandemic when specialty and department stores closed up and Hammitt was forced to make rapid adjustments. In real-time, Drockton says, Hammitt employees were able to live stream to wholesaling partners and to consumers to discuss inventory and processing in order.
It’s also filling in the gaps in the consumer journey. “Our technology is integrated all the way to our third-party logistics, to our in-house repair center, so at any point on [the consumer] journey from the moment they ask for help with the concierge desk, all the way to when it ends up on their doorstep, we know the status,” Drockton says. “You can’t provide that level of service if you don’t have everything connected and the ability for anyone, including myself, to tap into that in real-time.”
The Future of Technology and Luxury Goods
Looking ahead, Drockton is excited about how luxury goods and technology can interweave to deliver on customer experience by putting more power into the hands of the associates. “There’s additional tech that we’ve been looking at that allows associates to do full clienteling — almost like contact management — which includes the one-on-one Zoom calls, the live streams," he shares.
As an industry that prides itself on prestige and service, Drockton touts the importance of having “invisible” technology for the luxury goods shopper.
“We don’t focus on a lot of bells and whistles,” he explains, but he is excited by the prospect of RFID technology that would allow customers to track a product’s heritage, authentication, and repair history. “That will seamlessly play right into the tech stack we’ve already built.”
