The Chalhoub Group is a family-owned business that was founded in 1955 in Lebanon by Michel Chalhoub. Today, it is one of the leading luxury goods distributors and retailers in the Middle East, with operations in 14 countries. The company’s portfolio includes more than 300 brands, ranging from fashion and accessories to beauty and hospitality. Some of the most prominent brands it represents include Chanel, Louis Vuitton, Dior, Fendi, and L’Oreal.
An Unavoidable Presence
The Chalhoub Group operates a network of over 650 stores across the Middle East, including department stores, boutiques, and mono-brand stores. In addition to retail, the company also has a strong presence in the beauty and fragrance sector, with exclusive distribution agreements for several major brands. One of the Chalhoub Group’s most significant achievements is its role in developing the luxury retail industry in the Middle East. The company has been instrumental in introducing many international brands to the region and helping them establish a foothold in the market.
A Step Ahead In Social Responsibility
The company believes that it has a responsibility to positively impact the communities in which it operates, and has therefore implemented various corporate social responsibility (CSR) initiatives to achieve this goal.
One of the main areas of focus for the Chalhoub Group’s CSR initiatives is education. The company has launched several initiatives aimed at promoting education, particularly for underprivileged children. For example, the “Sustainability is Our Responsibility” program supports education and environmental sustainability by partnering with local schools and universities to educate students on sustainability and how they can contribute to creating a better world.
Another key focus area for the Chalhoub Group’s CSR initiatives is empowering women. The company recognizes the vital role that women play in society and has launched various initiatives to support and empower them. For example, the company’s “Women in Leadership” program promotes the advancement of women in the workplace, while its “Women in Retail” program provides training and development opportunities to women in the retail industry.
In addition to educating and empowering women, the Chalhoub Group is also committed to supporting local communities. The company has launched several initiatives aimed at promoting social welfare and improving the lives of those in the communities in which it operates. For example, the “Together for Good” program provides support to local charities and organizations that are working to address social and environmental issues.
The Chalhoub Group has also implemented several environmental initiatives aimed at reducing its carbon footprint and promoting sustainable practices. For example, the company is committed to reducing its greenhouse gas emissions and has implemented measures to reduce its energy consumption. The company also works closely with its suppliers to promote sustainable practices and ensure that they comply with environmental regulations.
Challenges That Lead To A Digital Revolution
The year 2015 brought several fresh hurdles for the organization to overcome. The volatile geopolitical situation in Europe and the economic downturn resulting from plummeting oil prices were exerting pressure on its operations. Furthermore, the confluence of digital disruption and evolving customer preferences had resulted in a complex situation of political, economic, and technological challenges, causing growth to stall at a mere 2 percent.
Recognizing the end of the “age of abundance” and the emergence of e-commerce driven by evolving demographics, CEO Patrick Chalhoub introduced a “digital fix” strategy at the beginning of 2016. The company’s numerous brands were previously decentralized, with individual websites and digital footprints. However, this approach proved ineffective, prompting Chalhoub to establish a digital competence center in the United Arab Emirates to spearhead the development of novel web-based initiatives.
From An Underwhelming Start To The Top Of The Ladder
By July 2016, it was evident that Chalhoub’s digital solution was not delivering positive results due to bottlenecks in the digital center. The company’s top management recognized the necessity for change but had miscalculated the extent of this transformation. In response, CEO Patrick Chalhoub declared a comprehensive transformation encompassing culture, behavior, and processes, centered around a customer-centric approach.
In 2017, the Chalhoub Group refined its customer focus strategy, learning from past digital experiences, and developed a new business plan to transform its traditional model into a “customer-centric, hybrid retailer.”
To achieve this vision, the company utilized agile philosophy, principles, and techniques, organizing its transformation process into a series of 10 90-day sprints. The primary objective of this new approach was to place convenience at the customers’ fingertips and make the organization more agile and adaptable.
Leveraging A Customer-Centric Approach
Between 2017 and 2019, the Chalhoub Group launched several initiatives to become more customer-centric. To engage with customers more effectively, the company adopted an omnichannel approach and revamped its brick-and-mortar spaces to blend top-notch customer service with e-commerce-like efficiency. The traditional retail experience became more experiential with the integration of augmented reality tools, allowing customers to virtually try out products before purchase. The beauty chain-Faces also provided in-store testing of products to further enhance the customer experience.
As the Chalhoub Group shifted towards a customer-centric approach, significant organizational and cultural changes followed. The company established an internal innovation lab called Ibtikar to encourage intrapreneurship across the organization. Additionally, the company created the external retail tech accelerator Greenhouse, which allied with startups that had the potential to become competitors, leveraging entrepreneurship to drive innovation in the retail industry.
Sliding Into E-Commerce
Leveraging its core competency in relationship-building, the Chalhoub Group announced a partnership with the international online retail marketplace Farfetch in May 2018. The joint agreement aimed to merge Chalhoub’s distribution and marketing services with Farfetch’s e-commerce platform and translate content into Arabic. In return, the Farfetch platform hosted Chalhoub’s brands, creating new growth opportunities in the Middle East.
This is how the Chalhoub Group revamped its way of functioning and incorporated e-commerce marketing to attain better growth. It also took advantage of Social Impact Marketing to establish itself as a conscious luxury brand. Just like them, there are hundreds and thousands of brands in the world that use creative marketing tools to turn around their fates. For more stories of inspiration and knowledge like this one, join World Brand Affairs.