The Madgician S01E09 | “Agility and Innovation: Key Lessons for Small Brands in Luxury Fashion”, with Diana Balogh, CEO & Founder of @Ludysco

“Innovation in luxury fashion is crucial, but it’s a bit of a paradox. Luxury is rooted in exclusivity, heritage, and tradition, yet modern customers, especially younger generations, expect a more personalized, sustainable experience. The challenge is to introduce innovation without compromising a brand's core values. - Diana Balogh 

In today’s episode of The MADgician, we had the pleasure of speaking with @Diana Balogh, innovation for sustainable luxury advisor and founder of @Ludysco. We talked about building resilience, innovation in luxury fashion, and balancing heritage with agility in entrepreneurship. 

Tune in on Spotify for the full episode: 

About Diana Balogh

Diana Balogh brings over 15 years of luxury industry expertise, with an impressive focus on operations across logistics, customer service, e-commerce, and innovation, particularly in the watches and jewelry sectors. Spending more than a decade at Cartier, Diana led significant initiatives, from implementing SAP and launching multi-brand e-commerce to pioneering Cartier’s diamond traceability efforts. Her projects have spanned cutting-edge technologies, including blockchain and AI applications within luxury.

In 2016, she launched her first entrepreneurial venture, Varadi, a high-heeled shoe company for women. Following this, Diana joined Prada in 2021 to lead the supply chain strategy for their inaugural fine jewelry collection, emphasizing traceability, sustainable sourcing, and boutique customer experience.

Driven by her passion for innovation and social impact, Diana embraced entrepreneurship once more in 2022. She now runs Ludisco, offering activities for children with developmental disorders, and DBC Consulting, which advises luxury brands, jewelry workshops, and tech companies on sustainability, business refinement, and leveraging AI and blockchain to drive growth and innovation.

What you’ll learn by listening

• Balancing heritage with agility: Lessons from luxury brands to entrepreneurship
• Innovation in luxury: How quickly are big brands updating technology?
• How disruptive technologies shape luxury: Insights for small brands
• Comfort-style dilemma: Can high heels deliver both?
• Shoe brands vs. jewelry brands: Which one holds greater potential for success
• Building resilience: Lessons learned from the world of business
• Breaking through the noise: Marketing tips for small brands

Podcast transcription

Georgiana: My name's Georgiana. I've been an entrepreneur in digital marketing since 2014. And recently, I started creating custom high heels. This podcast is with women entrepreneurs who work their magic day after day at home and at work. I'll be interviewing them in order to find out useful tips and tricks that can help you start or scale your business. Stay tuned!

This is Georgiana with the new episode of the Magician Podcast. As I'm a woman entrepreneur, I recently started my shoe brand a year ago. And in this podcast, I speak to a lot of people. Fellow women entrepreneurs, either in tech or in fashion. And the reason why I do this is because I've learned a lot of lessons along the way, and I know for sure that they have learned a lot of lessons along the way as well.

And I think it's very useful. For those of you who are starting out to hear them, to listen to them and to maybe avoid them in the future. And of course I've got an amazing guest for today as well. Just as I do every week, every time her name is Diana Balogh. And she has a very solid background in fashion. She basically bridges the world of entrepreneurship and fashion fashion consulting. She worked for a lot of high end luxury brands. Hi, Diana. Thank you so much for agreeing to talk to us today. 

Diana Balogh: Hi, Georgiana. Thank you so much for your invitation. It's a pleasure to discuss these topics with you today.

Georgiana: Diana, as I was saying, you are in the middle of all these worlds that I've been only recently starting to experiment. So please tell us a little bit more about how you started, what it was like to work for a luxury brand, what it was like to start your own brand, and what led you to consulting where you are today.

Diana Balogh: Yeah, sure. About my background, I've spent over 15 years working in the luxury industry with a particular focus on operations, so logistics, customer service, e commerce supply chain, manufacturing and innovation, primarily in the watches and jewelry sectors. With over a decade at Cartier, where I worked on several initiatives such as the implementation of SAP, launching e-commerce for multiple brands and overseeing Cartier's diamond traceability efforts, but also projects centered around innovation and new technologies, including blockchain and AI initiatives.

And in parallel, I have created in 2016, my first company, which is called Varadi, a high-heeled shoe company for women. So this was really my my first entrepreneurship adventure. And then in 2021, I joined Prada to launch their first fine jewelry collection where I managed the supply chain strategy, material sourcing with a strong focus on traceability and sustainability production planning, while also taking care of some retail aspects, such as boutique assortment, client experiences, self training. And toward the end of 2022, and mainly for personal reasons, I decided to embrace entrepreneurship again.

With two companies one which is called Ludisco, which provides activities designed by health professional to develop the skills of children with these disorders and ADHD. And DBC a consultant consulting agency mainly for luxury brands, jewelry workshops, diamond suppliers, and tech companies to help them navigate sustainability challenges.

Refine business models and leverage innovation in particular through AI and blockchain technologies. 

Georgiana: That's very, that's a very rich background. And I'm really impressed and happy to see that some of these luxury brands, I hope nowadays, all of them are looking into newer technologies, for example, a blockchain, or you mentioned you implemented this AP, this is rather new for me when it comes to fashion brands.

And I'm, I'm also curious about innovation, but we'll get we'll get to that a little earlier later. Sorry. Before that, I'm wondering what was for you the biggest difference between being an entrepreneur and working with a brand like Prada or Cartier, for example. 

Diana Balogh: So in both cases the luxury brands and entrepreneurship demand an intense focus on quality, craftsmanship, creativity, but the scale and the mindset are quite different.

So working in a luxury, especially at a brand like Cartier or Prada, you're dealing with tradition, heritage and timelessness. You need to maintain the brand status while slowly introducing innovation in a way that. That's not disrupt the brand's identity, but when you run your own business particularly a startup, you're moving much faster and it's normal.

So you have to be agile, make quick decisions, take bigger risks because you're building everything from scratch. And in large luxury companies you have many internal resources specialist teams to help you. There's always an expert in marketing, supply chain. Quality legal matters that can help you. In entrepreneurship, you don't have that. So you need to be multitasking all the time, wear many hats. And you also have to seek outside help for areas that are not your core competencies. You don't know. You don't know. So you need to seek help for that. Another major difference I would say is the budget.

Because in large companies, you often have the financial freedom to explore different ideas, invest in top solutions. As an entrepreneur, you're working with a much smaller budget, so you have to be far more strategic about where the money goes. This forces you to be more innovative, of course, in finding solutions, whether it's choosing the right technology or marketing strategy, for example.

But you need to be more careful. 

Georgiana: I'm on, as you are telling me all this, I'm remembering a discussion that I had with somebody around, I don't know, maybe it was 2012 or 2014 when I entered tech for the first time in my life and they were supposed to put in place a very complex system for the bank ING in the Netherlands.

And I remember them telling me, you would think that a huge brand. That has a lot of resources is very easy to work with, but on the contrary, every single thing that they needed an answer to took ages, every single question that required an answer took ages, people were going on holiday. And then at the end, I remember him telling me implementing this has been the hardest and most annoying project of my life, and I'm thinking in a way, probably it's the same when it comes to big brands in fashion.

You might have the budget, but then everything moves really slowly. And I think this can be super annoying. 

Diana Balogh: Yeah, it's true that the bureaucracy can be a bit of a hurdle because there could be silos in big companies. So to make a decision, you need to make sure that every department is aligned and agrees on the decision.

Which is also good because you need the opinion of the several departments, but it's true that when you are an entrepreneur you need to make decisions faster and you make more mistakes that's for sure. But at the same time, you can test quicker and implement the decisions that you took faster.

Georgiana: Yeah. Yeah. And I'm sure things have changed. Thank you. Since 2012, 2014, I'm sure it's not as slow as it used to be before, but still, in my opinion, fashion remains a laggard when it comes to technology. And so I'm wondering, you're also an innovation expert, how much. Are these big brands, these big luxury brands, how much are they keen on updating their technology or their processes in the end?

Diana Balogh: So I firmly believe that innovation in luxury fashion is crucial, although it can be a bit of a paradox if I can say, because on the one hand, as I said, luxury is based on exclusivity, heritage, tradition. On the other hand, and especially for younger generations, customers expect a modern experience, whether it's personalized recommendations, sustainability initiatives.

So what's tricky is introducing innovation in a way that does not compromise the core values of your brand. So yes, luxury fashion can appear slow in adopting new technologies, but I really think that there is a shift Because first of all, sustainability is a big driver of innovation.

Brands exploring materials for leather, for example or processes that reduce their environmental footprint. European directives coming into application on these aspects. And another powerful driver for innovation is the crisis. As we've seen during the COVID 19 pandemic, because the fashion industry, like other industries as well was forced to adapt rapidly and writing digital transformation.

We had much more visual meetings internally. But they would also incorporate a virtual showrooms boosting e commerce efforts, which were previously seen as experimental maybe slower to implement. 

Georgiana: And I'm I'm wondering in your role as innovation development manager at Cartier, you worked with. Disruptive technologies where you brought them forward, for example, blockchain or AI or augmented reality. And now they are more and more part of the luxury sector. We see it everywhere. I'm wondering what were the challenges for you in that role and in bringing those technologies to life?

That would be one question. And then how can we, the smaller brands make use of the same technologies? 

Diana Balogh: So the first rule is that technology in luxury is not about adopting the latest trends for the sake of it. Yeah. But it needs to solve real business pain points. The key to successful innovation is to make sure that technology serves the business, whether it enhances the customer experience, addresses operational challenges rather than simply being Tech for tech sake. And, uh, so this is first thing. And then one of the challenges when integrating innovations in luxury is that you often work with startups. And while startups can offer really good solutions, it's essential to do your due diligence to ensure that they're reliable, stable, scalable, will be around for the long term.

Because working with a partner that may not last can be risky for the operations and eventually for the brand's reputation. So this is very important. And another big challenge that I encounter is that once you have a successful proof of concept, the next step is scaling it up. And the proof of concept stage is often exciting because it involves innovation teams and only requires minimal input from operational teams.

moving from POC or proof of value to full scale implementation is a different story. I've seen it many times because industrialization requires significant involvement from operations, and this is where it can become tricky. Often the core business priorities focus on existing operations, and integrating innovation or new technologies may not be seen as an immediate priority, and they may not even have the budget to do it.

So it become another challenge and can take four years. And of course, another challenge was ensuring that these technologies did not dilute the personal touch and human interaction that luxury customers expect. So the goal was always to use technology to elevate, never replace the customer experience.

So this is very important as well. And for your other question, I think that there are many solutions and that, that are using this AI and blockchain technology that can be affordable for for smaller brands. Yeah. Open source solutions that you can play with for smaller business.

And I think that we will see more and more solutions that can be accessible by all kinds of size of companies in the future. 

Georgiana: And actually that can maybe educate. Smaller brands because I also have a very small brand, a brand that's just beginning, but I have a background in tech. So although I may be lack of the budget, I know many things.

That I learned in tech when it comes to order processing, to automation for businesses. But then I look around me and I see that so many brands who make amazing jewelry or who make amazing handbags, they lack the most basic skills for taking their business one step further. So I think yeah we talk about AI, we talk about blockchain because we're obviously at a different level, but I'm afraid.

In some areas and for some businesses, not even the basic layer of technology is present, unfortunately, or this is what I see with the businesses that I interact. But, 

Diana Balogh: Again I think that's we've facing a shift in that. Because they are with all the directives and and the expectation for the, from the customers will need to move further.

For example I'm thinking about the DPP, so the digital product passports that that we see. More and more often from the brands which are using blockchain technologies and and and this will become a mandatory in some years anyway. So the brands will have to comply with it.

Diana Balogh: be able to communicate on the sustainable sourcing, the authenticity of the, of your product to, to bring some storytelling around that. So for sure, we will see more and more examples like this in the future. 

Georgiana: Yeah, I look forward to that. And maybe, I don't know, it's also our job to educate these brands in this direction, but stepping aside from from innovation, which is of course a very important aspect and coming to to what really hurts me.

If I can say so shoes for which you also have extensive experience. I know you started your shoe brand to bridge the gap when it comes to the lack of comfort. Okay. Women want shoes that are comfortable at the same time as beautiful, that look nice, right? They want to wear high heels that don't destroy their feet.

And this is very hard to achieve. So I'm wondering is it possible to obtain a balance between style and comfort in high heels without compromising one for the other. And I'm really curious how you approached this challenge because I'm still struggling with it at the moment. 

Diana Balogh: Yeah, this is a big challenge. And absolutely, it has been at the heart of various mission, as I used to wear high heels a lot when I was younger. But it's it was also very painful each time. To address this we worked closely with a prototypist for years to create a shoe that did not sacrifice either style or comfort. And for this we conducted a series of tests on the arch of each stiletto to make sure it offers maximum support without compromising on the look.

And we decided to engineer the shoe from the inside out. For example, there are famous stilettos which are gorgeous and I will not name the brand. But it's very painful to wear them. The space between the heel and the tiptoe is is very small. So that's why we included a subtle platform on the front of the shoe to reduce pain.

This distance and also padding with a foam on the inside sole to absorb the impact when you walk. And to maximize the comfort of the shoes and if you were walking with slippers. We used very soft leather by hand picking with a leather quality specialist each leather skin in Milano and Paris.

as well as all the components of the shoe selected from suppliers in France and Italy like the heel as well the everything. And we really wanted this level of craftsmanship to ensure not only luxury and elegance, but also quality and durability. 

Georgiana: This is, I'm hearing this more and more from some of my customers and from friends of mine who are trying my shoes this key element regarding the platform that is placed in the front And this is definitely something that I could look into and I think that would make a big difference in the end. So yeah, obviously now a rather fun question if I can call it this way If you were to choose between luxury jewelry or luxury shoes.

And you had the budget to start a venture in either one of these two. Which one would you go for? Cause I'm interested in both at the moment. 

Diana Balogh: Yes, this is a good question. And if you ask me the question today, which we not be the same answer, maybe as in a few years or for sure, not the same. If you would have asked me the question some years ago today I would choose luxury jewelry.

Without hesitation or for several reasons because first of all my explain my experience in the jewelry sector gives me a deeper understanding of the industry and I feel much more armed to succeed in that area. And jewelry is also more timeless and durable and like shoes, which can be easily damaged and are often influenced by seasonal trends, the rules of fashion.

Fine jewelry, on the contrary, maintains its value and significance over time. With shoes, even when I had customers trying on the shoes then you could have some scratches or So it's it's more easily damaged. And additionally, shoes have a lot of variables when it comes to sizing and shapes.

And the range is smaller for jewelry because you would have less sizes and it makes it easier to create universal pieces. And I have a funny stories about it because usually for shoes, you try to focus on the average range. I would say in the middle being maybe 37 to 39 for women. And when I started my business, I decided to go from 35 as the smallest to 42. And my two first clients were 35 and 42.

And another thing is that the footwear industry, especially with trends shifting towards sneakers and more casual styles, that's not aligned with my current inspiration in terms of creativity. So I'm less driven to design for that space now, at least, as needs and tastes have changed. And we've seen it during, the COVID 19 which was a tough period for me.

Because women at home would rather wear slippers than stilettos. 

Georgiana: Yeah, trend exists, unfortunately, and we struggle with the same issue. And the discussions I'm having at the moment revolve around very low heels. Like five to seven, we have a seven-centimeter model that is out now and flat shoes are more and more often heard, and then I'm asking, okay, why is everybody wearing only flat shoes?

Are you no longer wearing heels? Yeah, maybe the very, very low heels like five or even lower can work, but rarely, but mostly it's all about sneakers and flats. 

Diana Balogh: Yeah, absolutely. And I'm the perfect example because I used to wear high heel shoes when I was younger. And now with kids, you need to run all the time. I have these issues, so I'm wearing myself more and more sneakers all the time. 

Georgiana: I know. I hope, and I want to believe that if you attend the Christmas party, or I don't know, New Year's Eve, or you go to a wedding, you're still gonna try to wear some heels, some heel sandals or some stilettos, at least in the first part of the evening.

But what I've seen more and more is that many women just simply choose to go for flats in the very beginning. And so they opt for very elegant flats that have that are distinct, that don't look like most of the flats. And I think this is also an interesting trend to observe and one that was for sure, not very present before COVID.

So I think these changes are I would like to hear some statistics from the big brands who used to sell a lot. Before COVID and that I'm sure are still selling, but maybe not as much as they used to at the moment. 

Diana Balogh: Yeah. Maybe not for the same occasions as you're saying then before, because before we used to wear high heels at work, for example but now it's I agree, 

Georgiana: it's shifted and, I have one one more example in this direction and then I'll go to my, my following question.

I'm originally from Romania and in Romania there's a lot of opportunity for big companies from Western Europe that come and do manufacturing here. We have a very extensive textile industry here. And I know of this brand who came to Romania, I think around the nineties, right after the fall of communism.

And this brand used to manufacture high end suits for men, but need suits for Hugo Boss, for Louis Vuitton, for like big brands of Europe would come and do the suits, make the suits. Here in, in Romania, in the Eastern part of Romania. And they were very successful. Like they, they did this for 30 years, and then COVID came.

And as soon as COVID came, people no longer went to the office. As much as they used to, you have, of course, consultants in the banks, you have some CEOs that maybe still go to the office, but the style is more relaxed now. And so they, for the first time in their existence, they are struggling, which wasn't the case.

Like I said, they were so successful and they worked for the entire continent, This is an interesting trend. I think 

Diana Balogh: that, but this is also what what is a strength for smaller companies or [00:24:00] entrepreneur like us, because you can pivots more easily than bigger brands. Which is also a strength.

Georgiana: Yeah, that is true. That is true. But for the big ones, and they are in this example, they are one of the big ones because they hired, I don't know, maybe 300 people in the factory. It's a problem problem and everybody needs to make change changes. And because this podcast is also about lesson learned lessons.

Learned in entrepreneurship and making mistakes and then reinventing yourself and taking a different path from example, for sure, from shoes to jewelry or vice versa. I'm wondering in these, in all these years that you've been an entrepreneur, what are the lessons that you've learned and what are things that have helped you move forward when it was difficult things that you would replicate today and things that you'd never repeat.

Diana Balogh: This is a difficult question to, to pick only three, as I have made all the possible mistakes in my first company. But if I had to pick only three, I would say one falling in love with your products. One of the biggest mistakes that I made early on. Was getting too attached to my product and when you start a business, it's natural to believe in your vision, of course.

And I had the support of my family and friends. So I was very lucky. It's why it was very amazing, but they were also biased and did not give me maybe the critical feedback that I needed. And I've since learned that it's essential to seek out more skeptical voices. people who will tell you exactly what's wrong with your product from the beginning.

You can improve your product from the very beginning rather than discovering flaws or issues too late. And now I make sure to get feedback [00:26:00] from a mix of perspectives, including those who are more critical. So I would call the most pessimistic person that I know and then refine based on input from more moderate people and pivot if necessary.

So this would be the first point. The second is thinking too big too soon. So another mistake I made. Was thinking like a big company from the start, and I invested heavily in stock, implemented sophisticated inventory management systems, focused on over delivering in terms of quality. And while these are great practices for established businesses that's true, have started small and rated.

And the lesson learned here is to test more, move fast and adapt quickly. To start locally, see what works, learn from it, and then scale only [00:27:00] once you have proof of concept. And, and the third, which is less funny, for sure but it was a big mistake that I made, is to is neglecting the legal aspects.

Because earlier on I overlooked the importance of having proper contracts in place with the suppliers and the partners. When issues came like delays or quality problems, I didn't have the legal grounds to address them properly. And the lesson here is to never neglect the legal side of your business.

To take the time to do due diligence, put contracts in place, be explicit about your business requirements and specifications from the beginning. And even if the trust is there, having clear agreements helps protect your business when you have challenges or issues. So this is a less funny one, but very one [00:28:00] that I 

Georgiana: think everybody neglects, but then you are confronted with all these delays and all these problems.

And of course you don't want to ruin the relationship, but yeah, time is money in 

Diana Balogh: the end. Yes. Exactly. But if you had time, I would have 10 other 10 other advices, but I would say that these are the three bigger mistakes that I made. 

Georgiana: And I think the first one you mentioned is absolutely golden.

I should print it and frame it on the wall of my room and read it every day because I made the exact same mistake. Exactly the same. I started off with the shoe that was pink, fuchsia, because I loved pink. Cause you liked pink. I liked pink. And I started this business because I lacked some very comfortable and also beautiful fuchsia stilettos with a very unique accessory.

So that's what I started with. And I found women that shared this. Opinion, but I made, of course I made the mistake in in buying the prototype that [00:29:00] had two high heels. That was another thing. But then I discovered that women tend to be conservative. And if you want to reach those of them that aren't as conservative as the majority, you need to be on various sales channels.

And I wasn't there in the beginning. I'm only now starting to discuss bigger contracts and, bigger visibility in these networks that would maybe appreciate fuchsia heels as well. But everybody was asking me, okay, what about beige or what about brown? What about gray, black and lower hills?

And I said, yeah, 

Diana Balogh: sure. Maybe one day, but look at these fuchsia heels. They're so amazing. I perfectly understand what you're saying. And now I can tell you that with all my new businesses I try not only to ask to my family and friends but people who would be tomorrow, my new customers. And ask them what they think about it and include that from the very beginning to, to mitigate the risks and to increase the chances of success.

Georgiana: For sure. But you know what, I think these are mistakes that we must make in order to reinvent ourselves. I could have had so many people telling me don't do it. I still would have said no, I'm going to do it and see what comes out of it. Because this is the way I am. And I'm sure every. designer, every fashion person that at some point has decided to create something, fell in love with their product initially.

I don't think it's possible otherwise. I just don't.

Yeah, exactly. Exactly. Yeah. This is super nice. Very valuable. Yeah. And I have just one last question that pertains to marketing, which is very important. And this is a question that I ask all my guests in this podcast, because nowadays you can have the most beautiful product. It doesn't matter if you don't know how to market it and how to sell it.

Especially when it comes to small brands that don't have the millions of Cartier. I'm wondering what can we do to stand out? What is your advice for us? 

Diana Balogh: Yes, of course it's a big big topic marketing. And if I could add another mistake, I would add this as a fourth point because I focused more on operations, which was my background and underestimate the importance of marketing.

But what I learned is that it requires a clear point of differentiation to, to stand out and strong brand identity. And in today's world customers are not just buying products. They are buying experiences and stories. And I've seen it with my shoe brands because I thought that my product was perfect, beautiful, comfortable, but when the clients were buying were purchasing the product was because of the story that I was telling them because of why I created that.

[00:32:00] Because of me. Yes. And and so my advice would be to focus on what makes your brand unique, whether that's through innovation, sustainability, personalization and work on the storytelling, which I didn't like so much, but you, of course, you can leverage on digital platform, but if you manage to adopt direct to consumer strategies by connecting.

deeply with your audience, it's much more efficient and enables you to build a loyal customer base at the end. And this is what makes the difference, I think. 

Georgiana: Yes, for sure. There has to be there has to be a way in this very busy digital world where we are bombarded with products and small brands from absolutely everywhere.

I think one of the strategies that works in the end is persistence. Good storytelling obviously has to be there and the unique value proposition that you'd need to [00:33:00] bring to the market, but it has become much more complicated than it used to be. And although this is new for me, cause I'm only now going into product marketing, I used to work in the service industry in marketing for services for tech all my life.

It is becoming increasingly difficult. To reach your desired audience. You need a lot of money to put in your ads. You need differentiation and you need to do it persistently, I would say. 

Diana Balogh: And to be in the field as much as you can, I would say. 

Georgiana: Yeah, for sure. This is also something that we we tend to neglect talking to the customers and being among them as much as possible.

Diana Balogh: Yeah. Yes. Because you also need to think about the habits of your clients and how to be part of the routine of your customers. What I learned as well. 

Georgiana: Yeah, it's a very, it's easier said than [00:34:00] done, but very useful. I'm sorry, Diana. Thank you so much for talking to me today. This is super useful. It's useful for the audience, obviously, but I think most of all, it's very helpful to me personally.

And yeah, I wish you the best of luck in, in everything you do for your brand. 

Diana Balogh: Thank you. And I wish you the same. Thank you. Thank you, Georgiana.