CEOInterviews.AIFrédéric Arnault (TAG Heuer) : LVMH Google Cloud annoncent un partenariat stratégique

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Interviewer0:04

Good morning business. It's 8:17. We invite Frédéric Arnault, CEO of TAG Heuer. Let's start with the LVMH-Google partnership. Why this deal with a tech giant in cloud, AI, and data? It's your specialty since you worked at Google and Facebook. How will you use data and hosting for business?

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Frédéric Arnault1:00

Data hosting is a key topic. The strategic partnership with Google covers three parts: hosting data and products on Google Cloud; a partnership on algorithms—we have data engineers and architects at TAG Heuer and LVMH, working closely with Google's lab in Mountain View for purchase predictions and supply chain forecasting; and training for group executives on using data in business.

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Interviewer2:58

So we always talk about data in business. The goal is to better know customers and offer tailored experiences. But isn't there a sovereignty fear? We saw how Amazon was accused of using merchant data for its own profit. Aren't you worried Google will do the same?

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Frédéric Arnault3:00

We ensured the data is completely isolated from other servers, in full compliance with GDPR. Our teams studied this thoroughly; it's a critical subject. Given their size, they have security systems unmatched by others. Ultimately, it's safer to be with large players than smaller ones.

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Interviewer3:30

This digital transformation of luxury brands—you do it concretely at TAG Heuer, where you've been president for just over a year, especially with the connected watch. Is it culturally difficult for these excellence and craftsmanship brands to go digital? A few years ago, it was taboo. Now digital seems obvious in luxury. How do you see it?

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Frédéric Arnault4:11

Now it's seen as obvious that the world will be increasingly digital, even in luxury. Experiences will be designed digitally, accelerated by the crisis. At TAG Heuer, we invested heavily in a fully digital product: the connected watch. Initially it was defensive, because of the Apple Watch threat. But now we see that the desirability of traditional watches is extremely strong, and demand continues to grow. It's additive, not cannibalizing luxury watches. TAG Heuer is legitimate on this segment due to our DNA in innovation, avant-garde, and sports. We internalized technical teams in Paris for software and hardware, with significant R&D investments.

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Interviewer5:51

But even as LVMH, a global giant, can you compete with Apple—the world's largest market cap—which invests heavily in health features? Do you have the means to be competitive against such a giant?

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Frédéric Arnault6:16

That's a very legitimate question. There is room for competition. Apple doesn't have 50% of the market; many competitors are developing. The key is differentiation: why buy a TAG Heuer? We are better in sports like golf and running. We invest in design, using watchmaking codes and materials like titanium and steel. We are partners with Google on Wear OS, which invests in health. We invest in sports experiences and recently updated for swimming and running. Our customers are very attached to our products.

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Interviewer7:29

Let's talk about the luxury world generally. The industry showed incredible resilience during the crisis. LVMH became the number one European market cap. What lessons do you draw from the crisis? Do you feel stronger than before?

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Frédéric Arnault8:00

When the crisis started, there was a strong demand shock and a supply shock because production stopped for a few months in watchmaking. In the end, supply was the limit. From June/July, demand came back extremely strong, but completely different: much more digital and local, because tourism was halted. We had to completely rethink sales and the purchase journey, focusing on local solutions. The desirability of brands remained intact. The attraction for our products is still very strong.

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Interviewer9:05

One of the big macroeconomic questions now is whether French, European, and American consumers will spend the savings accumulated during the crisis. Are you seeing a surge in demand? You have experienced the recovery in different regions. Do you note a strong demand at the end of the crisis?

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Frédéric Arnault9:33

Today, tourism hasn't really resumed, so many expenses that were made two years ago are no longer happening, which favors luxury product purchases. We'll see in the next six months as restaurants reopen globally and experiential luxury takes more importance, how that balances with physical product purchases. There are differences across the US, China, and also varying policies by governments impacting consumption.

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Interviewer10:15

You are a young CEO—26 years old—at the head of TAG Heuer for 15 months, during a crisis. How did you manage this crisis, communicating with your clients and teams?

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Frédéric Arnault10:39

The most important subject at the beginning was safety and being extremely close to the teams. There was a strong need for communication and transparency. We implemented widespread home office. Now we are questioning the long-term impact: will remote work remain? For our industry, most employees are in production in Switzerland, in boutiques, or in manufacturing. Those roles need presence. Support functions like marketing, digital, R&D can have some flexibility, but we need to create a unique corporate culture. So we can allow some home office but not too much.

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Interviewer12:00

Thank you very much, Frédéric Arnault, CEO of TAG Heuer from the LVMH group, for being on the set.