FASHION CONNECT: Luxury Brands can’t resist E-commerce
posted by Marie Dalton - Head of European Marketing • 25 Feb 2013 • 0 comments
Zoo Resident Rebecca Glassnap sheds some insight into how Luxury brands are finally engaging in E-commerce.
When François-Henri Pinault, chairman and CEO of PPR announced their joint venture with Yoox last Summer, he had some very interesting things to say about the luxury industry and e-commerce. The new PPR/Yoox joint venture will be dedicated to managing mono-brand online stores for luxury designers like Saint Laurent and Alexander McQueen and, in an interview with TechCrunch, he shed light on the deal's timing: "While the whole industry has been resisting e-commerce for the last 15 years it's now realising it's inescapable."
Last week I was sitting in a designer's studio talking about exactly this point: why have luxury designers taken so long to embrace e-commerce? Six years ago – when Net-A-Porter was six years old and already proving that selling luxury fashion online was viable, to the tune of annual revenues in excess of £20m, designer e-commerce was very thin on the ground, with only a few pioneers offering the official store experience on the web. For the multi-brands this has been a fantastic result. They have had time to consolidate their positions as the go-to retail experience online while luxury brands dickered as to whether the Internet would damage their brand. Now, coming later to the party, they find themselves bidding against the multi-brands on their own brand terms, and in many cases losing.
I recently read an interview with one of Net-A-Porter's first employees and she said persuading brands that they would act as brand custodians and not cannibalising the brands' own sales were two of the key issues starting out. The first issue almost seems laughable now – so successfully has Net-A-Porter established itself as a luxury brand in its own right, it is now able to confer that status upon the brands it stocks. In terms of cannibalising the brands' own sales however, this becomes an interesting issue now the brands themselves have their own online storefronts.
In the case of Net-A-Porter, and the e-shops of offline industry stalwarts like Harrods, Browns & Matches, the support they offer the wholesale side of designers' businesses far outweighs the potential cannibalisation of the retail side. However this is obviously not the case for all multi-brand e-stores, especially new entrants with weaker buying power. We believe mono-brand or official stores will play a huge part in the future of the internet and have set up our business model to reflect this. Fortunately Pinault thinks so too.
Writtern By Rebecca Glasnapp
Rebecca is Co-Founder of luxury e-commerce site www.lux-fix.com