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K2 Privacy & Compliance

Efficiently marketing luxury brands through retailers

Responsible for marketing and distributing premium brands of perfume and cosmetics throughout Italy, LVMH Italia must meet the needs of its 1,500 retailers while adhering to global policies defined by LVMH corporate.

Using Nintex K2 Cloud, the organization has transformed its trade marketing processes, leading to a significant improvement in retailer satisfaction and cash flow. A second K2 Cloud process has improved the transparency of its retailer approval process.

80

employees building workflows with K2 Software

1,500

new vendor purchase requests approved annually

$250K

more cash flow per month

Company
LVMH Italia
Website
Industry
Retail
Country
Capabilities Used
K2 Software

Who they are

LVMH Italia is a regional entity of LVMH, a global provider of 75 high-quality brands in the luxury market.

What they needed

LVMH Italia needed to fix slow invoicing and approvals processes for retail vendors.

How they did it

Using K2 Cloud for invoicing and approvals, the organization has created more opportunities by co-marketing with retail vendors.

Efficient invoicing for trade marketing

Challenge: Invoices lagging for retail vendors

Throughout Italy, LVMH Italia distributes and markets luxury fragrance, skincare and other cosmetic products from designer brands including Christian Dior, Fendi, Givenchy, and Kenzo. To promote these high-end products to potential customers, the company pays selected retailers to display in-store promotions and host marketing events, such as make-up demonstrations.

In the past, when retailers invoiced LVMH Italia for these trade marketing activities, their invoices often had incorrect or missing reference numbers, which meant that LVMH Italia couldn’t process the invoices promptly. The delays with LVMH Italia’s payments then resulted in deferred payments from retailers for LVMH Italia’s perfume and make-up products. This unfortunate situation led to cash flow delays, wasted employee time, and threatened to undermine the positive relationships between LVMH Italia and its retail partners.

Solution: Faster payments and improved cash flow

Now, LVMH Italia enters all information about planned trade marketing activities into K2 Cloud. Information for each activity to the relevant department for authorization. Then, during the promotion period, instructs an employee to visit the relevant store to verify that the marketing activity has indeed taken place. At the end of a verified activity, the automated process generates a proforma invoice for the retailer with all the correct references and financial details. When retailers then submit these pre-approved invoices, LVMH Italia can pay them without delay.

This streamlined process saves time for LVMH Italia’s employees while enabling the company to improve retailer satisfaction. Critically, the K2 Software has also improved the company’s cash flow, as retailers no longer have any reason to withhold their own payments to LVMH Italia. “Thanks to K2 Cloud, the overall situation for trade marketing payments has improved significantly,” says Mario Trovato, IT Manager at LVMH Italia. “We improved our DSO (Days Sales Outstanding) by one day on average every month, which translates to about €250,000 to €300,000 less in credit, which has a positive financial impact.”

We improved our DSO (Days Sales Outstanding) by one day on average every month, which translates to about €250,000 to €300,000 less in credit, which has a positive financial impact.
Mario Trovato, IT Manager, LVMH Italia Divisione Profumi e Cosmetici
Effective compliance with group policy

Challenge: Complex retailer approval process

LVMH Italia is part of the global perfume and cosmetics division of the wider LVMH group. As a result, it needs to adhere to policies that have been set at the group level and be able to provide evidence that it has followed the correct procedures to ensure compliance with international brand guidelines.

For example, LVMH Italia is required to follow a complex process for approving new retailers, to ensure that selected stores are of the right caliber for retailing the world’s most luxurious brands. In addition, LVMH Italia needs to check and re-approve its 1,500 existing retail outlets every two years, to verify that they are maintaining the high-quality retail experience that is appropriate for high-end cosmetics and perfumes.

Solution: An efficient and transparent workflow

LVMH Italia has completely transformed its retailer approval process using K2 Cloud. The organization has created a fully automated workflow that ensures all the required steps are taken to approve (or re-approve) retailers, in the right order, in accordance with group policy. “K2 Cloud manages the whole process from the start to the final approval,” Trovato says.

Signed contracts and other key documents can be attached to the workflow, putting all information relating to retailer approvals in one place, for the first time. This makes it easy for employees to look up retailers, find the relevant documentation and verify that the correct approval procedure has been followed, at any point in the future.

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