Luxury brands devote an average of 3.1% of their revenue to tech
Tech is now an essential strategic lever for Europe’s leading luxury brands, according to the fourth edition of the Luxury and Technology report published today by Bain & Company and the Comité Colbert.
Among luxury companies, 85% of CEOs now consider technology to be essential to the implementation of their strategy. 8% even consider it to be essential, according to the results of the annual Bain & Comité Colbert study.
The luxury sector’s use of technological capabilities is growing, as revealed by the analysis published today: 37% of companies report that they have most of the technological capabilities needed to implement their strategy, while 63% say that these capabilities are partially in place. No company reported a lack of technological capabilities.
Significant technology spending is expected to increase further
The analysis by Bain & Company and the Comité Colbert, which measures luxury technology spending for the first time, shows that luxury brands spend an average of 3.1% of their revenue on technology. For some, this figure can exceed several hundred million euros. This average masks significant variations: spending ranges from 1.9% to 5.5% of revenue.
The trend is clearly upward: 60% of companies and groups plan to increase their technology budgets by more than 5% over the next two to three years. And 28% even anticipate an increase of more than 10%.
“Technology budgets are already substantial, but the key is not simply to reduce costs or increase spending to match industry benchmarks,” says Joëlle de Montgolfier, Executive VP Retail & Luxury, Bain & Company. Investments must be scaled and precisely aligned with each company’s strategic objectives, supporting both day-to-day operations and future innovations. “
Three levers for optimizing the effectiveness of technology investments
The analysis by Bain & Company and the Comité Colbert highlights three priorities for maximizing the impact of technology investments:
- Strategic alignment: Ensure that technology investments are fully aligned with each company’s operational priorities.
- Rationalization and modernization: Modernize infrastructure, simplify technology architecture, eliminate redundancies, and increase the use of shared platforms to generate synergies.
- Internal skills development: Develop internal expertise for greater agility. Currently, 68% of innovation spending relies on external providers, a higher share than in other sectors. Deploying innovative tools such as AI coding assistants can also help increase engineering productivity.
Strengthen collaboration between management and technology teams
As the sector matures, closer involvement of CEOs in technological transformation is essential to elevate technology to a strategic function. In companies where CEO engagement in tech remains limited (50% of cases), most CIOs are looking for clearer roadmaps. To foster effective collaboration between business and technology, training executives in technology is essential to developing their expertise. However, only 52% of companies and groups currently offer technology training for executives.
“CIOs are no longer mere executors: they now play a central role in the transformation of luxury companies,” says Bénédicte Épinay, CEO, Comité Colbert. Not only must CEOs and CIOs work hand in hand, but the entire organization must be increasingly attentive to the value and impact of technology. Attracting the best technological talent to the luxury sector will depend on this cultural change.”
