AI and automation, market volatility, tariffs and traceability. These are just a few of the shifting dynamics that supply chain managers are having to navigate in the luxury industry today. At an exclusive leaders lunch, held during the Vogue Business Global Summit in Chantilly, GXO SVP of Global Sector Development Max Alexander co-hosted a roundtable discussion with Vogue Business Head of Custom Insights Anusha Couttigane. Amid the splendour of Maison de Sylvie, a stunning restaurant hidden away in the forest of Château de Chantilly, guests from brands including Longchamp, Sandro and Sephora, enjoyed a private lunch while discussing their biggest operational challenges.

As the discussion started, ongoing tariff negotiations quickly emerged as a huge challenge for luxury brands and businesses. Guests from Brazil immediately cited the complexity of importing luxury goods from abroad and the lack of local infrastructure required to offset these costs. Meanwhile, more established businesses based in Europe spoke of rising fuel costs across their fleets as a direct consequence of ongoing conflict in the Middle East. For others, the rising cost of returns management continues to plague bottom lines, with luxury shoppers reluctant to pay for deliveries and returns. This myriad of challenges is already hindering well-established business, while smaller, fast-growing fashion brands are struggling to scale without large overhead investment.

Alexander talked about the benefits of outsourcing as a way to manage staffing costs, one of the biggest lines in a brand’s P&L: “As logistics specialists, we take on the operational complexity that can often constrain growth, freeing brands to focus on creativity and customer engagement. We have truly deep expertise, advanced technology and scalable operations and actually it means we are able to anticipate demand patterns and position inventory strategically, often with greater precision than brands can achieve independently.”

Beyond conventional processes like shipping and deliveries, Couttigane alluded to the white glove services that GXO specialises in, which are especially important for luxury brands: “In the past, many luxury consumers were willing to wait a little bit longer to get more personalized goods, or custom packaging, or even the products themselves if they were coming from far away. However, with the onset of automation and increased digitalization, shoppers now expect much shorter lead times. They might be willing to wait a few more days, but certainly not weeks for something to arrive. And when it comes to personalization, the onus often falls on the brand itself or the retail stockist to deliver those elevated services, which puts pressure on staff who are already stretched.” She shared a case study from a beauty brand that offered engraved cosmetics cases and ribbons on fragrance bottles, highlighted how, by implementing these processes in delivery warehouses, GXO was able to take the labour away from staff on both the brand supplier side and the retail stockist side, whilst maintaining both the standards of presentation and reducing wait times for delivery at the customer end.

Alexander additionally explained that there are any services that can be executed within a warehousing facility that can help to eliminate profit risks for brands whilst optimizing sustainability processes: "Many brands underestimate the extent to which products can be restored within the supply chain. Whether it’s cleaning or rapid repairs, we can return garments to a retail-ready condition at scale - recovering significantly more value than if they were discounted or written off. Crucially, this approach is also far more sustainable, helping to significantly reduce the volume of unsold goods that would otherwise end up in landfill.”

Later, whilst participating in a panel focusing on how AI will change fashion during the Vogue Business Global Summit, Alexander said developing AI tools to enhance their operations has been a no-brainer. “As operations have grown in scale and complexity, the need for intelligent orchestration has become critical. This led to the development of GXO IQ—an AI-native platform designed to coordinate activity across the warehouse environment. It enables more efficient task execution, aligns operations with customer goals, and ultimately enhances performance at site level.” Alexander added that automation is the biggest shift, but also the biggest enabler, he has seen in logistics in his career. "Over nearly four decades in supply chain and logistics, the most profound shift I’ve seen has been the acceleration of automation and technology within facilities. These advancements are now fundamental to delivering both commercial performance and sustainability outcomes, and are reshaping how operations are designed and executed.”