Good morning, everyone. I'm very happy to welcome you here at this caring Investors Day devoted to digital. For the first time, we have decided to dedicate an Investors Day to not to a single house or activity, but to an activity that is across the brands and all our houses are involved. And we, at group level, we just coordinate and animate the whole thing. We you will see that our the decision actually reflects the key role that digital has gained into our industry.
And if you remember, for those of you who would follow us a long time ago, I can see some of them. Before Kering was Kering, we were chiefly in distribution. And if you consider how this sector was disrupted by digital, this really taught us a lesson that we do not want to forget. So this meeting today is for us a great opportunity to discuss the many initiatives that we've been undertaken and to share them with you. Indeed, digital has been a key pillar of our transformation.
Digital illustrates in very tangible terms the concept of growth platform, which is key to our group. Digital is key to our profitable growth strategy and very central to our ambition of being the world's most influential luxury group. Before we dive into explaining about this transformation, please allow me to take a step back and reflect on Kering's overall transformation over the past few years. Luxury has gone through a revolution. And from its early stages, at Kering, we focused on turning this revolution into opportunities.
First, we went through a dramatic change of scale. Between 2,008 2018, the personal luxury goods market grew by around 5% each year. This is an average for a loosely defined set of players. And obviously there are huge discrepancies among them. Growth will continue at an estimated rate of 4% to 6% per annum, and we commit to overcome this space.
With scale has come a continued shift in the mix of luxury clients. In its latest report, Ben Altagama estimates that the share of Chinese spending in our personal luxury sector will jump from 32% in 2017 up to 46% in 2025. Over the same period, the share of generations Y and Z will climb to 55% of the market compared to just a quarter in 2013. They will also account for 130% of its growth. Finally, more than 4,000,000,000 people will have access to the Internet, and the share of e commerce carried out on mobile devices should reach 55%.
Against this background, carrying us Beetroon has been through a massive transformation, becoming a luxury pure player, while luxury activities accounted for less than 20% of our revenue in 2018 28 sorry, 2,008. We have enjoyed a sustained pace of growth with luxury CAGR of nearly 15%, predominantly organic and significantly higher than our peers in the industry. This over performance validates our multi brand model and our vision of a modern luxury group based on creativity. We have been transforming Kering to take maximum advantage of this emerging environment. Our clients all expect product availability and a form of infantenarity that is a feature of the digital age.
This is why we are putting in place an agile demand driven supply chain. In an omnichannel world with clients at home across the globe, our brands must offer a seamless experience consistent regardless of distribution channel or geography. There are plenty of touch points, so we adapt tools and processes to maintain consistency in marketing, but also to inject personalization and emotions into each contact point physical or digital. All these factors led us to rethink our entire infrastructure and to build a powerful growth platform to support the operations of our houses and improve their efficiency to optimize cost, reduce lead time, improve accuracy of planning and forecasts or inventory productivity. This transformation has enabled us to sustain sharp growth to become more agile, more personalized and more efficient.
All of this will translate into additional revenues, higher profitability and lower working capital. The growth platform we are developing embodies our transformation into an integrated luxury group. We provide this platform to caring houses so that they can reach their full potential. Our platform builds upon 3 closely linked dimensions: a complete makeover of our IT infrastructure harmonized across the group, a fundamental restructuring of our logistical and supply chain organization to accommodate the change of scale and nature of our operations and finally, digital empowerment, which would not be possible without the other 2 prerequisites and encompasses internalization of e commerce, personalization of client experience and the development of new expertise I outlined in February. The first component is an IT enabler, our information systems.
We are implementing an ERP that offers us real time access to a single source of data. We are adopting a state of the art and integrated new set of IT solutions. These solutions are more flexible, less costly and reduce obsolescence. We roll out new agile methodologies and enrich our internal expertise with new skills. We are reinforcing our cybersecurity systems and procedures.
We are already underway, as you can see, with important milestones ahead of us, notably the gradual worldwide deployment of our ERP system scheduled to be completed in 2022. The second component is a logistics and supply chain set of capabilities. In recent years, we have accommodated rapid increases in volumes incrementally, building new warehouses as needs emerged. Now we're going for a complete rethink, building from scratch with investments in Italy, in the U. S.
And in Asia. We streamline our global logistic footprint. We're establishing a state of the art automated global distribution hub in Northern Italy to replace the 20 ish warehouses we are operating in Switzerland. In the U. S, our central warehouse is moving this fall to a new, more modern, more efficient location in Wayne, New Jersey.
In Asia Pacific and the Middle East, we should open new hubs by 2022. As you know, earlier this year, Kering Ioware's fully automated logistic global hub, also located in Northern Italy came on stream. And thanks to the group's new logistic footprint and to the dissemination across the group of best practices, we are gradually implementing new operating models, taking advantage of shared inventory. Thanks to these efforts, we will deliver faster across all distribution channels and ensure better product availability, offer a wide range of omni channel services, benefit from large and scalable storage capacity, improved working conditions, lower cost per unit and optimized inventory levels. This is, of course, not an overnight journey, but hard work for the next few years.
By 2022, we expect to operate the most advanced logistics infrastructure in the industry. Not going to spend much time on the 3rd component of our platform, digital empowerment, because it is our topic today. Gregory will tell you more about it. As you know, he joined us a year and a half ago after an extensive experience in the tech sector, notably at eBay. Thanks to Gregory, we drastically accelerated our digital transformation, galvanizing pre existing initiatives in e commerce and client service and building strong capabilities in CRM
and data
science. So before I give the floor to Gregory, let me thank you again for being here with us today. We hope you will have a great day and a better appreciation of our strategy. Thank you.
Good morning, everyone. Since I haven't met most of you, I thought I would start with a little bit more details on myself. I started my career at Procter and Gamble a few years back. I joined an early stage startup, which was acquired by eBay and then I spent most of my career at eBay in a variety of roles, both in Europe and since 2010 in the Silicon Valley where I moved to San Francisco. Left eBay in 2013 and joined a couple of startups, 1 in the ride sharing space, which we ultimately sold to General Motors and another one in the online learning space, which is a very successful company in the U.
S. Moved back to France in 2017 and joined Kering about a year and a half ago to be the Chief Client and Digital Officer. So during those 20 plus years in the tech industry, I got a chance to see the impact that technology has on our eyes, but also on our ways of working, right, enables to develop a deep understanding of our customers and create incredibly personalized information. And I think this is particularly relevant for the luxury industry. If you think about it, what we do in luxury is create beautiful products.
We tell amazing stories and create emotions around those products. And we develop unique and luxurious experience around our customers. And I fundamentally believe coming out of the tech industry in the past 20 years that technology can technology and data can actually help us augment the impact we have on our clients and augment the impact of the stories we tell and the experience we're creating. And so this Investor Day today is all about telling you how we at Kering are using technology, data and digital tools to augment the experience of our clients and drive our business more effectively. So in the next 45 to 50 minutes, what I'm going to try to do is give you a little bit of sense of our roadmap and also show you how the combination of the expertise and the platforms we're building at the group level combined with the know how, the understanding of the customers, of the brands is going to create a sustainable competitive advantage in the future.
And the way I'm going to do this is basically in 2 big sections. I'm going to try to go really fast on the first one because there's a lot of things you already know in there and plus you have your booklets. I want to talk a little bit about what how we're thinking about digital disruptions, both in general and in the context of the luxury industry specifically. And then second, I'll lay out what the key pillars of our digital strategy is, introducing what you're going to see in greater details during the workshops today. And after that, I'll give a little bit of a perspective on the agenda.
So let's talk a little bit about digital disruption. There's been a lot of talk in a lot of industries around what a digital disruption means. From my perspective, it's very much three things. First thing is a consumer facing revolution, right? Customer behaviors are changing dramatically.
Second one is more related to the way we do business. Artificial intelligence is now becoming readily accessible to company like ours and changing the way companies are going to be working and the way they're going to deliver new experiences to their customers. And last but not least, there are a bunch of companies, digital native as we call them, that are emerging who have understood those two trends and leveraging them very aggressively to scale businesses in ways that has never been seen before, hence disrupting entire industries in the process. So I'm going to share a bunch of data that go really fast because they're in your booklet. Let's talk a little bit about the first one.
We all know this. In 2020, it's going to be a pretty important year where we and our consumers are going to spend more time on the Internet than actually spend on TV for the first time ever. And this time, they spent mostly on social media. You know all those numbers, but these are pretty impressive numbers, right? A third of the population is connecting every month to Facebook.
If you imagine that Facebook is not even available in China, these are gigantic numbers. And this is where our customers are spending most of their time and it's creating 2 sets of new behaviors and expectations. 1, the way they look for information and the way our consumers discover products is very different from what it was in the past. They're looking for the information that we give as brands, but also looking at sort of what you know all those numbers, but these are pretty impressive numbers, right? A third of the population is connecting every month to Facebook.
If you imagine that Facebook is not even available in China, these are gigantic numbers. And this is where our customers are spending most of their time and it's creating 2 sets of new behaviors and expectations. 1, the way they look for information and the way our consumers discover products is very different from what it was in the past. They're looking for the information that we give as brands, but also looking at sort of what their friends think about the brands and what the people they trust and respect things about those brands. So it's changing the dynamic of how we need to communicate to our customers.
The second change is that they expect to engage directly with brands, right, which is something that appears with the development of those social media platforms. 2nd is the way they shop, pretty straightforward. We're seeing this in every single industry and in every single region, right? And it varies from one region to the other. Take music, 85% of the revenue is made online and it's also happening in every region, right?
If you look at China, more than 35% of retail is actually happening online. So big transformation in the way people behave, both in terms of discovering information and engaging with brands, but also in the way they shop. And luxury is no exception, right? The Bain research shows that by 2025, pretty much every single purchase is going to be influenced by an activity happening online prior to the purchase. And we look at the purchase and sales in the same timeframe, around 50% is of the purchases are going to be influenced by a digital tool, be it e commerce, be it mobile payments.
So a big transformation happening in the luxury space. And same thing for e commerce. Although it started relatively slowly, the industry is currently still based on this Bain Research around 9% to 10% of total revenue. We're seeing an acceleration in the next few years where it's probably going to reach around 20% to 25% of our business by 2025. So luxury is also seeing that trend.
The second big trend, very important for us, less consumer facing and more sort of how we think about our business, is the way we run our business is about to change fundamentally as a result of the emergence of artificial intelligence. Research done by PwC shows that the impact is going to be around $15,000,000,000,000 and this impact is going to come to onethree on sort of gains of productivity, so operational excellence, and twothree are going to come from consumer facing experiences that are going to be built, which are going to increase conversion. And again, luxury is no exception here. There's an opportunity even if it's early days, there's an opportunity to use AI at pretty much every single step of our value chain and either create efficiencies or improve the experience of our clients. And last but not least, these are the usual suspects, but there are companies that appeared over the last 20 years that didn't have exist back then that have built incredible leadership position, disrupting entire industries and creating tremendous amount of value in the process, leveraging those two trends, understanding those customer behaviors, being where the customers are, and leveraging artificial intelligence to build amazing businesses.
When we look at luxury specifically, interestingly, we don't see the emergence of digital native brands as much as we've potentially seen it in other industries. Where we see when you look at sort of the ranking of the top luxury brands, these are the same brands. The positions might have definitely changed over the last few decades, but these are pretty much the same names that you would have seen a few years So less disruption on the brand side. However, we're seeing on the distribution side, digital native players emerging and creating marketplaces and wholesale businesses to deliver a multi brand experience to the clients. So net net, the luxury industry is subject to that digital revolution as well, probably not as massively as some other industries and probably driven by the fact that we are creating unique products that are impossible to replace and also we're controlling our distribution.
So that's probably protected us a little bit versus other industries from that digital disruption. However, those trends that we're seeing here around customer behaviors shifting, artificial intelligence becoming more and more accessible and more and more of a lever for businesses like us to deliver great experiences to customers And the emergence of digital native players, they will not stop. They will accelerate in the next few years. And we at Kering see this actually as a big opportunity for us. And there's a couple of reasons for this.
The first one is we are approaching this digital revolution that's happening from a position of strength. If you think about it, the shift in customer behavior is the emergence of social media platform enables brands and companies to build a direct relationship with customers. And I'd argue our brands are world class at communicating and telling stories to customers. So that's a huge opportunity for us. 2nd big change is e commerce.
And what is e commerce? It's the opportunity for companies to sell directly to customers, right? What do we do in retail? This is what companies like us do, right? So we know how to do this.
And I'd argue we know how to do this better than a lot of industries, right? So again, it's an opportunity for us. And last, as I mentioned earlier, technology enables to create amazing experiences that were not possible before. And luxury is about creating unique luxurious experiences. So technology represents a unique opportunity for us to do our business better and to serve our clients better.
And that's why we're making big investments at the caring level, at the group at the brands level to capture that opportunity and take the lead in leveraging the digital opportunity in our business. And the way we do this, and hopefully you'll see that during this section and also during the workshop, is we're investing in creating expertise and platforms at the group level and then working very closely with brands to leverage those platforms and this expertise to solve actual business problems and improve the experience in their in the brands businesses. So let's talk a little bit about how we're going to do this and what are the key pillars of our strategy. There's basically 3 big pillars and I'm going to provide a little bit more details on sort of where we stand on each of those. First one, as I said, we're seeing the digital space and social media specifically as a huge opportunity for us to tell our stories and get in direct relationship with customers.
So we want to leverage that opportunity to create the aspirations around our products and tell the stories about our brands. 2nd, we want to expand online retail. We see this as a huge opportunity for us. You've seen the numbers, it's going to grow to 25% in 2025. We want to be a leader in driving that part of our business.
And 3rd, as I said, the way we do business is about to change fundamentally. And here again, we have started investing in this area to leverage the opportunity of data and artificial intelligence to create more personalized experiences for our customers and also drive operational efficiencies in the way we do our business. And I'll give you some examples of that, and you'll see even more during the workshops. So let's start with digital communication and creating the aspirations around our products and around our brands in the digital space. This is not something we're starting now.
It's been a shift that we've been operating for several years now. And there's basically 2 ways you create this aspiration online. The first one is through advertising. And the second one is through building your presence in social media. So in terms of advertising, we've made that shift already.
Like we're now spending roughly at the group level, 50% of our media spend is actually spent online. And for those who were at Gucci's Investor Day a year ago, you know that Gucci is actually ahead of that, spending 55% of its media spend online. So that shift has happened and we're building on that to reach out to our customers and tell our stories. The second way to build to create the aspirations around our brands is to build social presence in our social media. And here again, our brands have been at the forefront of this effort, building strong presence, developing dedicated content to be able to communicate and create communities in different social platforms across different regions.
And you see that we have built presence and Gucci has been a pioneer in that space in pretty much every single platform and in every single region. And the good news is this is working. Since we started this relatively early, we're now reaping the benefits of those efforts and doubling down on them. So I'm going to spend a little bit of time explaining the 3 next slides, which are critical metrics that we're looking at. So when we look at social media, there's really 2 types of impact that we're looking at.
The first one is what we call owned. So that's the activity our brands do on their social accounts to reach out to their communities and tell their stories. That's what we call the owned activity. The second one, which is pretty much the outcome of this, is the earned. So things we don't control, these are not the post we make or the stories we tell.
It's how followers and people in social media talk about our brands. And we want to make sure that people talk about our brands, share with their friends, because we know it's a fantastic way to drive awareness and drive conversion in our business. So what we're looking at here, when I told you we build presence and started early doing this, we looked at 1st owned. Is it actually working on the things we control? And this number here is we're looking at the number of new followers that brands that our brands acquired in Q1 this year versus the end of last year, versus December last year.
Okay? And we're looking at who has acquired the most followers across the different social platform. And what you see here is that Gucci is actually number 1, reflecting the enormous investments they've made in terms of building presence early, creating amazing contents, which are dedicated to every single platform. And what you see is that our other brands have also been able to build disproportionate presence relative to the size of their business in terms of driving acquisition of new followers to which they're going to be able to reach out and tell their stories. So that's the own piece.
The own piece is working really well, reflecting the investment we're making. Then there's the impact on earned. And earned, again, is not the post that we do or the communication we do, it's how people talk about us. And ultimately, this is what we want to achieve, right? A lot of people talking and sharing stories about our products and about our brands.
And the way we look at this is looking at all the posts on all the social platforms that are made by people and by people basically. And we look in the universe of around 15 top luxury brands and we look at our share. And obviously, we want to increase that share and sort of make sure that we are present in the post that our communities of clients are actually doing. And what you see here, looking at Q1 shares and we've put flags instead of brand names, But what you see is that Gucci is actually very well positioned, just like other brands among this universe of top luxury brands having at the group level a 30% share of all the buzz or noise that's happening around the different luxury brands in the universe, in this universe of 15 brands. And the second piece we're looking at is engagement.
It's one thing to have a lot of posts about ourselves. It's another one to have people see it and react on it, right? So what we look at when we look at engagement, we look at number of retweets, number of likes, number of comments, number of shares to see how people are actually reacting to the post they're actually exposed to. And the higher the engagement, the higher the appeal of the brand and the excitement around the brand. And what you see here is, yet again, Gucci is number 1, taking the number 1 share of all the retweets, all the likes, all the comments that are happening around in this universe of top luxury brands.
And again, as you see, we're taking as a group a disproportionate share of this engagement with around 32% of that share in Q1. So these are a few of the key metrics that we're tracking on a regular basis to make sure that, active and present and telling amazing stories in social media and B, it's translating into actual buzz and appeal across the different social platforms. That's for creating the aspiration, and we're going to have a workshop dedicated to this, And you'll see what the group is doing to help and augment the performance of the brands. And we'll have Gucci share some of their examples as they are one of the leaders in that space. The second big pillar of our digital strategy and we're very active on this is expanding online retail.
And before I get into details of what we do, I want to share with you a little bit how we're looking at online sales. And the short story here is, it's not very different from offline retail. We have a retail business and we have a wholesale business. And this is true in the offline world and the online world, right? You're very familiar with the offline world.
The way it works in the online world is like we have our directly operated store. That's our brand.com site. We have concessions that we are doing with multi brand players, just like we're doing in the offline world. And we have wholesale, where we're selling our products to people who sell it on our behalf to the end customer. The only difference is that we see, just like in other parts of retail, we see the emergence of what we call marketplaces like Farfetch, like Toplife back in the days, or like Luxury Pavilion, who are aggregating brands to give them access to big pools of customers.
But that's pretty much the only difference. What we see in online retail really mimics what's happening in offline retail to which we have a very clear in which we have a very clear strategy and we're very familiar with. So let's take a look now of how is our business split across those different elements. So I'm going to spend a little bit of time explaining this number. So take a look on the left hand side at the group level.
So first, when we take all those components, brand.com, virtual concessions, you see VC in some areas that's virtual concessions and wholesale. And wholesale, we take the retail price, not the price at which we sell to wholesalers, very important. When you do that, at the group level, the total online sales, the sum of those 3 represent just shy of 10% of our total revenue, which is in line to slightly above market standards, depending on the benchmarks we look at. Now if you look at what we call online retail, which is the sum of our brand.comrevenue, so gucci.com, buy and sega.com, ysale.com, and the virtual concessions we have with some of our multi brand players, that represents around just shy of 5% of our revenue, 4.7% to be precise. And what you see is like a pretty some variation across brands with Gucci being slightly above 5.4 and Balenciaga being sort of the highest at 8.6.
And we'll have Cedric Charby, CEO of Balenciaga, come in this afternoon to tell you a little bit more about the growth story of Balenciaga and specifically drive his business. So that's how the activity is split currently. Now looking forward and looking ahead, our strategy will be to grow primarily and focus a lot of our efforts on driving the online retail piece of our business, which means brand.com plus virtual concessions. And the key reason for this is that we want to offer the best experience possible to our clients. And we feel that brand.com is obviously where we have the most control and virtual concessions is where we have also a lot of control on the assortment.
Have the control on the broader experience, on the communication and how we tell the stories around our brand. So this is the area, just like in offline retail, as a brand scales, we are increasing the power of retail. We feel we are at the right time now with our developments in the online space to take control of that activity and focus our efforts on driving the online retail piece of our business. So the control on the experience and the quality of the experience we want to offer to our clients is the number one driver of this decision. There's other reasons.
The second one is top line growth. We have experience in moving businesses from wholesale to concessions. And consistently, each time we've done this, because we have better control on the assortments and on the experience, we accelerate growth of those businesses that we transfer to concessions or to directly operated stores. So that's another so we want to replicate that in the online space. The second one the second sort of or third reason is data.
When we have especially when we grow our brand.com properties, we have greater access to data. And I'll talk about it in our 3rd pillar of our strategy. The more data we collect about our customers, the smarter we are about what they need and the more able we are to deliver sort of very personalized experiences that drive higher conversion. So in brand.com, we have greater access to information, not only on the transaction level, but also on the navigation level, which is very precious information to understand what our customers like and don't like, what they're interested in, so that we can offer them more relevant and more personalized experiences. And the last piece, obviously, is economics.
What we're seeing is that in comparing virtual concessions with wholesale first, we're seeing lower higher value capture in virtual concessions, but lower margins because we occur a lot of the costs in virtual concessions because we have a greater control on the experience. In wholesale, the margins are higher, but the value capture is much lower, as you can imagine, because we're selling at a lower price to the wholesalers who then sell to the end customer. And when we look at brand.com specifically, we'll talk more about this in the workshop dedicated to e commerce. We're moving from a business that was sort of revenue share based in the joint venture that we have, currently with YOOX NET A PORTER, to a business that will have that are building more fixed costs, but which will have way more operational leverage as we scale the business. So we are expecting the margins to be accretive starting in 2022 when we'll start to reach the scale at which we'll drive those operational leverage.
So going forward, I mean, we're very excited about our e commerce activities. And going forward, we will focus our efforts primarily on driving what we call the online retail piece of our business, which is a mix of brand.com and virtual concessions. So how did we do this? This is not something we're starting today. We've been hard at work for several years now.
And we've taken basically 2 different approaches. 1 was with Gucci very early on and I'd argue Gucci is probably one of the luxury brands that has launched in e commerce like the earliest back in 2,001 on their own platform. And for the other fashion brands, we've taken a slightly different approach in 2012, creating a joint venture with YOOX NET ALCORTHY. And at that time, we had very limited sort of experience in e commerce and we wanted to the help of a big player in the space to help us scale our e commerce business. And it's proven very successful.
We're very excited about the decisions we made back then. It enabled us to build a really healthy business for our brand.com activities, right? And we delivered around €600,000,000 in 2012, growing at an average rate of 41% across those multiple years. So huge success in terms of reaching out to customers, selling more products online, but also building a greater understanding of how e commerce works and what the key levers are. And it's just the beginning, right?
We've probably seen in the graph in the previous slide that growth has been accelerating in the last couple of years we're excited about the potential going forward. Just looking at the split by region, what you see is that we have really strong adoption in Europe and in the U. S. And we're pretty under penetrated right now in APAC, including obviously China. So there's a huge opportunity there to especially as those customers are incredibly digital savvy and connected, there's a huge opportunity for us to build online retail channels to reach out to those clients and tell our stories and sell our products.
And we have a very strong strategy around this. Again, 2 different approaches. The first one is Gucci. For those who were at the Investor Day last year, you've seen that there is a very ambitious plan around building their brand.com and Gucci.com in that case, activities, where they're basically rolling it out to the rest of the world, including China, extremely successfully. And second one, continuously taking the feedback from clients in terms of improving the experience on that platform.
And it's showing a lot of success. The second one for the other brands, you've seen that at the end of last year, we've announced that we were going to end the JV with YOOX NET A PORTER. We are extremely excited about the impact that this joint venture had both on our business and also our understanding of e commerce. And we feel that with the growth that we're seeing in the last couple of years, the projected growth in the future where e commerce is going to represent around online sales is going to represent around 25 percent of our revenue, now is the time to bring this activity in house and to achieve a bunch of objectives. First one is, we want to offer the best experience possible.
So that means we want to control the roadmap of those platforms to be able to take the feedback from clients in terms of what they need to have a better experience on our platform and increase the conversion. And then we don't want to be dependent on the 3rd party to develop that road map. We want to own it so that we can serve our clients better. 2nd one, we want to improve financials. I talked about it earlier.
There's currently a revenue share in the JV with Unsafe A Porter. As we bring it in house, obviously, we occur more we generate more costs, but we will get rid of that revenue share. And we think that this the margin can be accretive starting in 2022. 3rd, always with the client in mind, we want to scale our omnichannel services. It's a critical expectation from our customers to be able to have a seamless experience between the different channels.
And we have already, thanks to the partnership with YOOX NET A PORTER, we had some of the best omnichannel services that we're offering with our customers. But admittedly, they're very manual. So the platform we're building, and you're going to be exposed to this in the e commerce workshop, is built in the way to sort of make those omnichannel services more scalable and more impactful in the experience of our clients. And last but not least, the 4th reason why we made this decision to internalize and bring our e commerce activities in house is to enrich our client understanding. As we build our own e commerce platform, we'll have access to real time to much more data, which we're going to be able to use to feed our understanding of our clients and develop programs that are even more personalized for them.
Again, you'll get way more details during the e commerce workshop we'll have later today. So that's the online retail. Very focused on the brand.com and concessions and trying to grow that business, which is going to be a big growth driver for our brands in the future. And last but not least, I mentioned that artificial intelligence is about to change forever the way we do business. And I want to spend a little bit of time staying at a reasonably high level to explain why now is the moment this is happening and why it's relevant to Kering.
So why is it happening now? Why is artificial intelligence? We've been talking about it for decades. There's been a lot of research with frankly limited business applications, But this is changing. There's been and there are three reasons for this.
The first one is a technological breakthrough that happened with machine learning, which is now enabling companies to deal with massive amount of data and make sense of that. So this is a big breakthrough that makes it relevant today. 2nd is the volume of data, which is unprecedented due to the digital tools that we are all using in our daily lives, the amount of data that algorithms can use to better understand clients and deliver better experiences is has grown exponentially and is now making it possible for companies like ours to improve experiences, but also drive efficiencies in our business. And the third reason why artificial intelligence is ready now for us to leverage is computing power. In order to compute all this data, you need tremendous computing power, which was not available to non tech companies in the past, but all the tech giants have developed sort of services in the cloud that anyone, small and big companies can use to process big amounts of data.
So the combination of those three things makes artificial intelligence accessible for companies like ours to create new opportunities in our business. And frankly, I think a company like Kering is uniquely positioned to leverage this, right, because of our size. We have multiple brands. We have 46,000,000 customers in our database. We have huge amount of data about our customers, which gives us a unique opportunity to leverage the tools that are readily accessible to drive a greater understanding of our clients and an understanding that's so great that we can actually personalize experiences to the individual level and drive efficiencies in our business in a massive way.
So I'm going to try to show you a little bit how we're thinking about this and what we're trying to do. So last piece of background on artificial intelligence, the key pillars of a successful artificial intelligence, as I you probably alluded to from my introduction is 1, need to capture a lot of data. 2nd, you need to structure it within a database. And then you need to have tools to make sense of this data and automate the impact on customers. And our goal here is to create this flywheel where we have data, we already have a ton of data at Kering level.
Thanks to this data and the algorithms we build, we build better experiences that attracts more customers and retains more customers, which generate more revenue, which enables us to invest in more tools and then which will create more data and create that flywheel. And we think because of our size and our scale, have a unique opportunity in this industry to be the pioneers and deliver big impact on our customers and big impact on our business. So how are we doing this? Pretty much structured around those 3 topics. Every single project we launch now at the Digital Project is an opportunity to capture more data.
We talked about the e commerce platform. That's an opportunity to capture transaction data, navigation data about our customers and be smarter about what they like. We'll talk later today about client service. We have since the inception of our Client Services platform, more than 3,000,000 contacts with customers. These are opportunities to not only offer great experience, but to gather information about our customers.
We have a ton of people coming to our stores. That's an opportunity to capture insights, information about our customers and to use that data to then offer better experiences because we understand them way better. So the first piece of our strategy is making sure that everything we do, we can collect the relevant data, obviously respecting privacy rules in every single country where we operate. And once we have this data, the very important thing is to structure it in a way that's going to be usable. And it's very important to understand that, again, Kering has been pretty much at the forefront here by when Francois Henri Pinault made the decision to merge all the databases from our brands, who are now on there's one single database where we're capturing all the information about our customers, very important.
The brands have access to only their own data, right? Even if it's in one single database, the brands work and every project we do is based on a brand by brand basis. We're not sharing data across the different brands. But what having a one single database has a lot of advantages, right? We can use we use consistent data.
We can use tools and platforms that will help all of the brands and we can build 2nd pillar of our AI strategy is making sure we structure the data in the most relevant way. And as we did this, we also realized that that data was not necessarily clean. And so we have and the team in one of the workshops is going to tell you that all the work we're doing in making that data the cleanest possible, removing all the duplicates and making sure that data is actually accessible. It's a lot of work, requires a lot of expertise and we're already investing big in this area. And the third piece is once we have the data, once we have the infrastructure, is to be able to use it.
And so we're building at the group level expertise, deep expertise. We're hiring world class experts in data science, in CRM, in innovation, in client services, in digital tools in general to make sense of this data and do basically 2 things, drive build a deep understanding of our customers to be able to offer them the most personalized experience possible. And second, understand and work with our brands to basically drive operational efficiencies in their business. And I'm going to give you a bunch of examples on that. Before I do so, a couple of data.
You have that in your booklet. So some of those slides are going to be really hard to show here, so I'm going to try to go quickly on those. But one of the biggest surprise I had coming from sort of a digital native companies to Kering and where 90% to 95% of the business is actually made offline, I was surprised by the amount of personal information we had about our customers because basically 88% of transactions, we have information about our customers, which is actually quite astonishing. And not only that, but we have at half of those clients, we have ways to get in touch with them and they gave us their approval to contact them for nearly half of this database with 2 different means of contact, which is usually email and phone. And for 2 thirds or close to 2 thirds of that, we have 1 single contact methods to get in touch with them, which is a huge, huge asset.
And the more we acquire customer, the more this asset in terms of deeper understanding of our customers is actually increasing. You have all this data in your book. The key thing is, is we have 46,000,000 clients in our database. And the more we generate transaction, the more this database is becoming an asset for us. Like just looking at 2018, we had 14,000,000 more transaction registered in our database and 7,300,000 new customers.
So now that we've built ways to capture data and infrastructure to store it, the more the time passes, the more we're building an asset with this. This is literally impossible to read on the slide, so it's on your booklet. But basically, it's to give you a sense of how we're using this data to firm up our understanding of our customers. And we're here, as an example, taking comparing sort of the profiles and the client ID of an online customer with an offline customer. And as you'll see, the difference is not that big.
There's a big difference the biggest difference is primarily around average price, where people online tend to buy at lower prices or sort of lower priced items than in a store. Now, how are we using this data? And there's basically 3 ways we're doing it. Let me go into the first one, which is personalizing experiences, which is probably so there's multiple ways do this. I'm going to share with you a few examples and you'll have more details during the workshop.
First one is emails and trying to use the deep understanding we are developing around our clients to offer them personalized experiences. So what we did last year, and we're in the process of industrializing now, is we looked at we compare the performance of the standard email we're sending to every single customer around the looks and the campaigns of one particular collection. And we compare that with emails where we actually take information around the purchase history of a customer. We are drawing correlations with other customers in our database to offer the full products or to display the full products that have the highest chance of converting that customer. And we compare the performance of that email between and we compare that versus a control group that didn't receive an email.
And what we see when you look at the performance of those two emails, A and B versus the Control Group, we see as the incremental repurchase lift versus control, it's 6 times, so not 6%, it's 6 times higher for the personalized recommendation than the regular email. It doesn't mean we should do only the product recommendation because again, our business is a mix of art and science. But the science piece of our business, this shows that we can really improve it in a meaningful way. Second example is an app we call Lutte. You'll have an amazing demo during one of the workshops.
In the beginning of 2018, we've equipped all our store, all our sales associate with an iPhone. And in that iPhone, an app that we developed in partnership with Apple to help augment their performance. What this app does is basically 3 things. A, it gives real time access to stock. So instead of having a sales associate talking to you when you're interested in product and leaving you for 15 minutes to check if the product is available in the store, They can scan the product and immediately know whether that product is available in store.
And if it's not, they can tell you, well, it's available in a store in London. Do you need to have it shipped to you? Good example of how we use digital tools, data to deliver amazing experiences to our clients. 2nd thing it does is doing product recommendation. So if you're interested in a particular jacket or a particular dress, it will recommend you based on primarily style right now, not so much algorithm, but this is going to come, products that would go well with the products you're interested in.
And last, it has all the information about the customers, allowing sales associates to better prepare their appointments with their key clients. And when we look at, again, comparing looking at the performance and the incremental lift associated with this app, we compare transactions that are happening which involve the transaction with Lutte, which is the name of that app and transactions that don't. And what we're seeing is we see a 15% to 20% increase in the average ticket for a transaction that involved Luchay, which suggests that this is actually helping the sales associate, not replacing it, helping the sales associate to deliver a better experience to the client. And frankly, we've been extremely fast and agile in terms of testing this concept and rolling it out. Like in January of 2018, we had only 20 stores testing this feature or this product.
And now like a year and a half later, more or less, yes, a year and a half later, we have 90% of our network across the brands equipped with this iPhone and this app, hence being able to deliver better experiences for customers. Last but not least, as we look at ways to improve to use technology and data to improve the experiences of our clients at every single touch point, There's a big touch point, I mentioned it earlier, when clients reach out to us because they have questions about our products, questions about our stores, these are opportunities to deliver amazing experiences, right? So we created back at the end of 2017 a platform at the group level to help to support the brand better address that touch point. And so what we do here is equip digital agents with information about the customer so that when somebody calls with an information, we know who that customer is because we have his or her phone number. We have access to all his information.
And as a result, the agents answering those phones are able to answer all the questions, which is way better than the past experience where you would call a store, nobody would reply to that phone call because sales associates are busy selling. Now we normally pick up the phone, but when you have a question about an online order, somebody in the store can doesn't have this information if you ordered online. So now we have agents that have access to all the information, hence being able to answer your question, provide you a better experience and can even sell on the phone if you're interested in that use case. So we've tested this in Europe for a few brands back in 2017. We rolled it out.
It was so successful, we rolled it out in the U. S. In 2018, and we just launched a new hub in Singapore for Asia earlier this year. So lots of success and better experience for our customers. And to wrap up things on the personal experience, the way we are we know it works is we are we want to sort of assess the impact on the experience of our clients.
So we're just rolling out a new methodology, which is very popular in startups and in digital native companies, which is called Net Promoter Score. And we're testing it with a few brands where each time you do a transaction either online or in store, we'll send you a survey with this, which looks like this, which will capture a score, but also and more importantly, insights about what you liked about the experience, what you didn't like about the experience. And we're using this data to, A, enrich our understanding of the clients and B, take actions to make sure we are reaching out to people who didn't have a good experience to bring them back and turn them into promoters. So that's the personalized experience piece of how we're using the data. The second piece is omnichannel.
We're building, as I said, a big asset of digital tools and data about our customers. And when we think about omnichannel, we think about in 2 ways. 1 is the services that build bridges between the online and the offline stores. I talked about it earlier. It's basically reserve online, pickup in store, buy online, pickup in store, buy online, return in store.
We're building those bridges because we know our customers engage with the brand. They don't really care about the channel there. And one day they're going to buy online, another day they're going to buy in store. So we want that experience to be as seamless as possible. And so we have that currently with in the context of our current platform, we're going to build much more automated and scalable services as we move to the new platform.
And this works. Couple of snippets on this. For people who reserve online and go in store, what we see is the average ticket is 70% higher in that case versus when they buy only online. And second, the other way around when we have people like sales associate buying online for a customer that's in store, what we're seeing is that this already represents 5% of total online of total retail sales, whereas it's available only in 23% of the stores. So we're rolling this out and you can imagine the impact this will have on our business.
That's omnichannel services. The other thing we do with the data and when we think about omnichannel is thinking about using this amazing understanding we have our customers to activate them omnichannel. We don't really we're not focused only on emails or we're trying to figure out use this data to understand what is the best channel to reach out to customers, when is the best time to reach out to them to tell them the story about our products and our brands. And third, what is the most relevant message to do this with the idea to offer a better experience and higher conversion? And you'll get example of that during the workshop on client engagement.
Last but not least, is operational excellence. I said that we're building this asset around data and using it to personalize experience to drive omni channel activations and services. We can also have a huge, huge impact on operational excellence and out to customers. When is the best time to reach out to them to tell them the story about our products and our brands? And third, what is the most relevant message to do this with the idea to offer a better experience and higher conversion.
And you'll get example of that during the workshop on client engagement. Last but not least, is operational excellence. I said that we're building this asset around data and using it to personalize experience to drive omni channel activations and services, we can also have a huge, huge impact on operational excellence. And I'll share a couple of examples here. So first, we looked at sort of I already saw that slide, but we looked at sort of areas where data can have an impact.
And we've identified a couple of use cases in the supply chain, primarily around replenishments, which we've been very active at working with Gucci, where we're basically using store data, client data and product data and seasonality data to try to predict how products are going to sell at the SKU level and at the store level and providing this information to our planners so that they can replenish their stocks at the central, regional and store level more effectively than they're doing without this forecast, right? And what we've done is we compared the new forecast that we developed with the AI factory and this new algorithm that takes all this information with the current forecast that we're using. And we've seen, we've proven that we can deliver a 20% greater accuracy between the forecast and the actual sale that is going to happen. So if you can imagine on a business like Gucci, which is €8,500,000,000 if we can drive that kind of efficiency at every step of the supply chain, this could have an enormous impact. This is very early days.
It's been a lot of work to make that happen. And I'm excited that we're actually going to launch this in one category in Europe for Gucci in production. So it's actually going to impact the work that our planners are doing using AI to be more effective. It's a very exciting development. Again, as I said, our business is the goal here is not to replace everything we do with AI, it's very much to augment the performance of our staff and of our processes to drive greater efficiencies.
And a good example of this is, as we think about our algorithms, the next step for us is obviously to feed it with more data, but it's also leveraging the amazing knowledge and expertise that our teams have to inform that algorithm and make it more effective. So the data science the AI factory we've built has actually built a little tool to capture the feedback on every single product from our buyers and from our planners in terms of what they think is going to work, which one they prefer to feed this into the algorithm to make it even more effective. So it's a mix of arts and science, data and sort of a human perspective that we're adding to the algorithm to increase its efficacy. So that's what we do around operational experience. And the other big thing that we're doing as far as the digital team is concerned is not only being very busy at driving impact, better experiences and better efficiencies short and mid term, we're also looking at the long term.
And we have an innovation team that's very much focused on trying to understand the big upcoming disruptive trends and try to figure out what it means for our business and take actions on that. We've decided to focus that team on a few topics and you'll have a workshop later today that's going to give you concrete examples of the type of topics they're working on. But at the highest level, we're very focused on sort of new business models and new materials as an area where we're spending a lot of time trying to understand how new materials and new business models are going to evolve and what we should do about it. We're working with a lot of biotech companies to try to improve that and also trying to figure out like how subscription, how secondhand businesses are going to impact our business and try to form an opinion about that and develop actionable plans. The second thing is looking at the big technologies and disruptive technologies that are coming like blockchain, like voice and again trying to work with brands to answer some of their key problem, key business opportunities with those technologies in the idea to test and then roll out if it's proven successful.
And last, as we do this, we want to make sure that we create the conditions to know all those technologies and also change the culture around innovation. I'm going to wrap up because I'm getting a bit late with 2 slides on the impact on organization. This is trying to describe how we're thinking about going after digital at Kering. And I think this is a really important thing because I told you earlier, we think technology is a huge opportunity for the luxury industry to deliver better experiences. I think this we're taking an approach that's very specific to us.
And this approach is trying to is captured here. The first one is we're hiring world class deep experts in every single digital field at the group level. And what these people do is they work with brands to co create platforms that are going to answer some address some of their business opportunities and they operate those platforms at the group level to give the brands leverage. And then they work with the brands to understand what their top business opportunities and priorities are to see how data, technology and digital tools can help them address those opportunities. This is what you're trying to capture we're trying to show here.
So we already have a bunch of platforms already in place that's helping augment the performance of our brands. We have Salesforce, we have OneSignal database, I talked about that. We have Salesforce Marketing Cloud, Salesforce Service Cloud. These are all platforms that are built at a group level to augment the performance of the brands. And the approach we're taking here is very much a test and learn approach, where we're taking a brand, a region, testing an idea, and then when it works, we basically roll it out to the rest of the brands and the rest of the regions.
And as we do this, I fundamentally believe we are actually changing transforming the companies and implementing new ways of working. And we're not doing this via because just declaring it or putting posters in the hallways. We're doing this because we're actually running projects with the tech team, with the brands and with the functions within the group. And each time we do those projects, we implement a bunch of methods that are influencing the rest of the organization. One is we are breaking down silos between the tech team, the digital team, the group and the brands and working effectively.
We have a good example with bringing in house our e commerce platform. We're bringing all those people in the same place working in an agile way. We've already trained 50 people in agile development. This is counting with other people going through those trainings. We're adding new expertise within the group around data science, around digital tools, around user experience.
And then we're taking this method, which I think is a little bit new and hopefully you got that from some of the pilots that we're running, is we have an idea and we will test this idea quickly in a small area of our business. And once we see it working, deploy it to other brands and other regions. That's the approach we're doing. And again, it's not something we're declaring, it's something we're doing in every single project, hence influencing the rest of the company. That's it for the overview of our strategy.
And we're now getting into the meat of the day, which is going to be the workshops. So we have 4 workshops that are going to happen now. And the purpose of this workshop was to try to give you more details into all the pillars that I just mentioned. And the way we did this is we're trying to have for each of them, where it was possible to have somebody from the group tell you and one of those experts that we've hired to tell you about the platform and the expertise we're building at a group level together with the brands and how we're partnering with the brands to understand how data technology can help them better serve their customers. So you'll have that in 4 workshops.
One is going to be dedicated to digital communication and you'll have somebody from the group and somebody from and Robert from Gucci coming and telling you a a little bit what we're doing specifically. We'll have another one on e commerce and client services, another one on client experience and then the last one on AI emulation. And you guys are going to split in groups and rotate across those different workshops. And hopefully, it will give you the perspective around how the experts we're hiring at the group level are building platforms that augment the performance of the brands. Then we'll have after those workshops, we'll come back to this place with to have a couple of sessions.
1, we'll have Cedric Charby, CEO of Balenciaga, coming and sharing with you the story of Barentsaga and a little bit of case study of how they're using digital tools to better serve their customers and drive the growth of their business. And we'll have a Q and A session at the end to answer all of the questions. And during the workshops, you have 10, 15 minutes to ask you questions on that specific workshop. And hopefully, that will be able to give you the full perspective on what we're doing. The last piece of logistics that I think I need to do, we rehearsed this 10 times and I always got it wrong.
So you should look at your badge. You have a color on your badge. And so just make sure you have that color. And so there'll be people outside when you get out that will tell you to orient you to the right workshop. And you will move are they moving?
No, they're not moving. You're staying in a well, you stay and the speakers are moving. So if you make it to your room, you're good for a couple of hours. Okay? Thank you very much.