Is LVMH getting into the mystery box game?

Heathis an English start-up that has made a lot of talk about itself in recent times for its original way of revolutionizing luxury retail: users pay a fixed price based on the size of the box to buy a mystery box that contains various items of luxury brands. A very simple yet brilliant idea, also thanks to a very attentive presentation and selection of brands, which attracted a number of high-level investors during the most recent round of funding: LVMH and the partner of its investment fund L Catterton, Michael Mitterlehner; Stefano Rosso of the OTB group and the Hermès family, as well as the Antler company. The new capital will serve to improve Heat's e-commerce experiences such as gamification, AI-driven personalization and interactive drops. In general, however, the participation of these large luxury groups in the financing of the start-up, which currently has offices in the UK and Milan, suggests Heat's intention to expand further into Europe and the US – especially since the range of brands it collaborates with has expanded to include brands such as Balenciaga, Loewe, Saint Laurent, Celine, Haider Ackermann, Casablanca, Jacquemus, JW Anderson e Off-White™.

The appeal of the retail format proposed by Heat is well understood: first, the format of the mystery box at a fixed price, with items from past seasons (but which are also including those of current seasons) represents an extremely elegant way for brands to eliminate unsold stock obtaining a profit without resorting to outlets; secondly, the mystery box represents a union of retail, circularity and entertainment, as the spread of the app has been accompanied by the spread of unboxing videos on social networks that record very high views and interactions; thirdly, mystery boxes also feed the resell, as those who receive items that they decide not to wear, can always resell them recovering in many cases all the value of the box with a single sale. A kind of win-win situation for brands, retailers, social media creators and customers that is having great success moving across all levels of the system. 

LVMH is obviously interested in the format, which has already been used by brands such as Haider Ackermann and Represent for the launch of new products, as well as the other groups and brands dependent on them, and their participation in the financing of the start-up may suggest that the mystery box format will be enriched with special editions dedicated to this or that brand,  or at least start to become a new element of luxury marketing – perfect for dialoguing with Gen Z, to acquire new customers, to launch new products but also increasingly refined thanks to the aforementioned investments in the field of AI to customize and automate the selection of products based on the individual customer.