As the industry accelerates its tech transformation, tighter focus and stronger collaboration can unlock higher ROI.
At a glance
New research by Bespoke Business Development finds European luxury groups invest ~3.1% of revenue in technology (range: 1.9%–5.5%).
ROI improves when companies:
align tech bets to explicit business priorities,
simplify/standardize tech architecture, and
adopt a talent model that boosts engineering productivity.
As tech maturity rises, CEO–CIO partnership becomes a decisive advantage.
Luxury is embracing tech—without losing its essence
Luxury’s core values—craft, exclusivity, and brand mystique—are now reinforced by technology rather than threatened by it. Data, analytics, and digital tooling power immersive omnichannel experiences; modern manufacturing, logistics, planning, and inventory are increasingly tech-enabled.
Yet benchmarking tech spend across luxury has been difficult. To close this gap and help leaders compare, Bespoke Business Development assessed the sector’s technology foundations and investment strategies, combining quantitative analysis with executive surveys and interviews across leading European maisons and groups. A large majority of CEOs view technology as essential or critical to strategy, and most CEOs/CIOs report strong day-to-day collaboration and high employee openness to new tools. Still, only ~37% say they largely have the tech and data capabilities needed to fully deliver their strategies—evidence of meaningful progress, but also a sizable capability gap to close.
The cyclical slowdown in luxury and the rapid scaling of generative AI make now the moment to accelerate technology and data transformation. The goal: maintain disciplined cost management while building the tech backbone that will capture the next demand rebound and serve increasingly digital, discerning customers.
How luxury invests in technology today
Spend levels and variance
Average tech spend sits at ~3.1% of revenue, spanning 1.9%–5.5% depending on company size, portfolio mix, and operating model (centralized vs. decentralized), as well as M&A legacies and vendor footprints. Larger groups do not consistently spend a lower percentage—scale benefits are often offset by brand autonomy, legacy systems, and fragmented vendor ecosystems.
Most leaders expect absolute tech spending to rise over the next 2–3 years, especially in AI, cybersecurity, and core systems.
“Run” vs. “Change”
Luxury allocates, on average, ~63% of tech budgets to “run” (operate and maintain) and ~37% to “change” (modernize and transform). Many other sectors approach a ~50/50 balance. Within luxury, the “change” share ranges widely (~15%–55%), with leaders freeing up transformation capacity by simplifying foundations and de-risking legacy portfolios.
Where transformation dollars go
Luxury historically directs a higher share of “change” investment to customer-facing work (stores, ecommerce, marketing, cross-channel service) relative to consumer/retail peers. Conversely, it has invested comparatively less in enterprise tech, data, and AI. That pattern is shifting: CEOs and CIOs are now sharpening focus on data platforms, analytics, AI/ML, operations, and back-office modernization—all crucial to distinctive front-end experiences.
Three ways to make technology spending smarter
1) Tie every euro to business imperatives
CIOs deliver maximum value when business priorities are explicit, granular, and stable enough to drive portfolio choices and product roadmaps. Where CEOs are less hands-on with tech, CIOs consistently ask for a clear, objective-driven roadmap. The fix: structured CEO–CIO planning cadences that translate corporate strategy into a ranked set of initiatives, KPIs, and funding guardrails.
Measurement also needs an upgrade. While most CEOs report that ROI meets expectations, too many assessments still tally partial costs/benefits. Leaders should migrate to end-to-end ROI models that capture enterprise-wide effects (revenue lift, margin, inventory, CX, risk/cyber resilience), not just IT line items.
2) Streamline architecture to lower “run” and fund “change”
Redundant systems, overlapping vendors, and brand-by-brand solutions inflate “run” costs. Luxury groups can:
Consolidate platforms where differentiation is low (identity, integration, data pipelines, ERP, security).
Move to modular, product-oriented architectures that let maisons innovate at the edge while sharing robust cores.
Centralize procurement and unit-cost tracking; scale promising pilots across brands/regions.
Result: lower unit costs, faster delivery, fewer failure points—and more budget headroom for transformation.
3) Evolve the talent model to boost engineering throughput
Luxury outsources a larger share of “change” spend (~68%) than many peers. To regain agility and control, groups should reassess which capabilities to own vs. buy:
Insourcing targets: product/platform architecture, security, data/ML engineering, front-end and key customer-journey tech.
Fewer, deeper vendor partnerships with clear SLAs and transparent cost models.
AI-assisted development (coding copilots, test automation) to raise velocity and quality.
Recruiting is competitive, so elevate the internal stature of technology, define attractive career paths, and broaden sourcing beyond luxury/fashion to import fresh perspectives.
The CEO–CIO partnership: a growth multiplier
Tech absorbs 2%–5% of revenue but can feel opaque to non-technical leaders. Meanwhile, CIOs often lack the executive-committee presence common in other industries. Both dynamics are evolving—and should be accelerated.
Practical steps:
Give the CIO a seat at the top table and make technology a standing item in executive reviews.
Run quarterly joint planning on the tech roadmap, portfolio trade-offs, and spend optimization.
Increase tech literacy across the C-suite (short bootcamps; start-up demos; university treks; targeted conference exposure).
Organize work using cross-functional product teams (business + tech co-owners), expanding from customer domains into core operations and support functions.
Reflection prompts to get started
For CEOs
Do we have a regular, structured dialogue on the tech roadmap and value realization?
Are the top business priorities explicit, measurable, and translated into funded initiatives?
Where are we differentiating—and are tech dollars concentrated there?
Are we using end-to-end ROI and unit-cost metrics to guide investment?
What structural moves (architecture standards, procurement, operating model) will sustainably lower “run”?
For CIOs
Am I fully embedded in strategy and capital allocation forums—and empowered to challenge?
Do we have robust prioritization and a transparent portfolio (KPIs, owners, timelines, risks)?
Where can we simplify and standardize to release capacity for “change”?
What’s our target mix of internal vs. external talent, and how will we attract, develop, and retain it?
How are we deploying AI-assisted engineering and automation to raise throughput and quality?
Bottom line
Luxury has made real strides in technology adoption while safeguarding brand heritage. The next leap—higher ROI with less friction—will come from sharper strategic alignment, cleaner architectures, and a modern talent model under a strong CEO–CIO pact. With disciplined “run” costs and focused “change” bets in data, AI, and operations, luxury groups can compound advantage and meet the next demand upswing with speed and confidence.
Source: Bespoke Business Development 2025 Survey and analysis.
The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect those of Bespoke Business Development. They are intended to encourage discussion and reflection, rather than serve as legal, financial, accounting, tax, or professional advice.
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