INFUSIONL u x u r y e - c o m m e r c e

A n o x y m o r o n

Maria Costas Art Director

!linkedin.com/in/mariacostas

Friday, 3rd October 2014

C r e a t i n g D i g i t a l E x p e r i e n c e s

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F e d e r i c o M a r c h e t t i , f o u n d e r & C E O Y O O X g r o u p

“Luxury exists because it is exclusive.

!

The Internet exists because it is accessible to everyone.”

The global picture

PART I

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E-commerce sales should leap 61% by 2018, according to eMarketer, reaching $491.5 billion. !

Brick-and-mortar sales are expected to grow a 12.8% to about $5 trillion over the same period.

to

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The bigger e-commerce gets, the more it is disrupting the industry as we know it.

!There is a change in how people are shopping and retailers must change

to reach future customers. !!!

Ex: Even when customers do choose to purchase items in a store, they frequently do research online first and then go straight

for the item without stopping to browse.

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The online luxury market grew approximately from !

$1 billion in 2003 to $13.5 billion in 2013. !

The growth is almost entirely in the U.S., with American brands accounting for more than half of all sales.

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Angela Ahrendts, vice president of retail at Apple and former CEO of Burberry portrays the luxury customer as having two defining characteristics:

!!

“they use mobile devices to shop and they travel widely.”

&

Luxury brands have been particularly behind in e-commerce. !!

A big part of the allure of the luxury lifestyle lies in the special

customer service and the careful attention to detail that luxury brands exhibit and cannot yet be replicated by a machine.

!!

The challenge is to stay relevant on the Internet without losing what makes their brands valuable in the first place.

!!

What are the main problems that the brands face when trying to give their clients a “white glove” online experience?

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DESIGN !Without impeccable design, you instantly lose almost any consumer who is accustomed to shopping in locations where aesthetics play a role. !Is important that the interface is clean and the fashion is well photographed and displayed. Similar to how a consumer can pick up an object in-store to view it more carefully. !Key points: images, video, attention to detail, copy and font.

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USER EXPERIENCE !Be simple to navigate. The online experience of a luxury brand should mirror the thoughtfulness and elegant feel of in-store experience. Too many luxury brands put creativity and visual appeal first and forget

usability. !Bad example: you can’t see the e-shop or is difficult to find what you want. !Avoid barriers to entering sites An online luxury experience in particular should never force users through the completion of form fields and CAPTCHA requests.

!http://www.balenciaga.com/

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Extra content The brand must encourage consumers to visit regularly not only to shop, but to also engage with the brand. !Leading luxury fashion brands usually have a rich visual heritage, archival assets and stories and celebrity devotees that can be used to create interesting digital contents. !http://eu.boucheron.com/en_eu/the-maison/history.html !

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CUSTOMER SERVICE !Perhaps the most important consideration because is how digital brands drive loyalty and brand affinity. !It is essential for online portals to be as consumer-friendly as possible. !Brands must convey to consumers that they can easily contact someone if they have a question about a product or need to discuss an issue. !

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IN STORE EXPERIENCE !Integrating digital (multi-touch surfaces, near-field recognition, digital browsing and virtual try-ons) into the in-store experience is a way to provide a seamless transition between the two. !The future is this kind of consumer experience, in the intersection of technology, culture and commerce.

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SITE SEARCH. !An L2 study last year found that 30% of luxury brands' e-commerce sites don't incorporate site search. !SEO isn't always considered when designing luxury sites. !Using text as images, and lack of attention to copywriting for SEO can mean that sites don't even rank for their own products.

The Players

PART II

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Pioneer 1

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N a t a l i e M a s s e n e t , N e t - a - P o r t e r f o u n d e r

“Touching clothes is just shopping foreplay,

but it’s changing. !

After all, you don’t need to try a Mercedes to know

that you’d like one.”

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THE IDEA Online magazine that sells the spreads.

!Content, Community, Customisation, Commerce and Customer Service with three unique selling

points: the authoritative fashion editorial; a website that is both highly aesthetic and

groundbreaking; and exclusive access to the world's international labels.

!“We’re trying to own a category.

And unlike Amazon, which is a fantastic place to get everything, we want to be the destination

for fashion.” !!

www.net-a-porter.com

!!

NET-A-PORTER

Founded 2000 by Natalie Massenet

It started as a monthly magazine with a limited number of brands but soon realized that the customers wanted even more. The magazine went weekly. http://www.net-a-porter.com/magazine/264/archive

!!

N e t - a - P o r t e r

In 2009 an online fashion outlet is launched, THE OUTNET. !!

N e t - a - P o r t e r

In 2010 the luxury consortium Richemont bought the two thirds of Net-a-Porter it didn’t already own in a deal that valued the company at £350m. !!!

N e t - a - P o r t e r

In 2011 launches MR PORTER, a luxury-goods site for men. !!!

N e t - a - P o r t e r

In 2013 adds BEAUTY to the range of products. !!

N e t - a - P o r t e r

In 2013 launches the NETBOOK: “It’s a metaphor for the physical diaries that we carry with us, to meetings and in our lives,” !!!

N e t - a - P o r t e r

N e t - a - P o r t e r

In 2014 launches the printed magazine PORTER. !!!

N e t - a - P o r t e r

In 2014 launches Net-a-Sporter, the sportswear section !!!

N e t - a - P o r t e r

BONUS, in 2013 for her presentation at the Vogue Festival, Natalie Massenet launched an Instagram account to help tell her life story. !!!

http://instagram.com/nataporter_mystorysofar !!

N e t - a - P o r t e r

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The market star

Pioneer 11

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THE IDEA Purchase out-of-season inventory

and sells it on to customers via the web. !

“High-end fashion brands and the luxury goods groups were notoriously slow to see the potential

of the internet, both as a means to build brand loyalty and as a place to sell their wares.

I saw that a luxury brand could be as exclusive as it is on the Internet, sometimes even more,

as it is on the street,” Marchetti says. !

Their goal is to be “the global internet retailing partner for leading fashion and design brands”

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www.yoox.com

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YOOXFounded 2000

by Federico Marchetti

!!

Yoox Group is a master of the logistics: the management of online stores, the handling and shipping of products, digital production, payments and customer care. Parts of the fashion industry that are crucial to the way that luxury brands are perceived.

!!

Yo o x

Yo o x

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60 photographers.

55 studios.

200 photos an hour.

15,000 items photographed every day. !

Yoox has also developed its own software, Turn-Oh, which can stitch together 30 shots

to create 360-degree animations

!"You cannot be further than us from the customer, but we are very close to them because we know exactly what they are doing."

!!!!

Yo o x

Marchetti’s new big idea, though, is what he calls “cross-channel”, the integration of online and bricks-and-mortar retailing. “In five years’ time the mono brand site and the flagship store will be completely integrated.”

Yo o x

!Since 2006, YOOX Group designs and manages the online stores of some of the most important fashion brands.

!!!

Yo o x

In 2006 a design section went live !!

Yo o x

In 2008 launches thecorner.com, dedicated to smaller and emerging brands and selling current season. Marchetti sees the site as a place were brands can try out online retail before opening their own e-commerce.

!!

Yo o x

In 2009 launched an iPhone app, one of the first shopping apps. It launched an iPad shopping app on the day the iPad debuted in the US.

In 2014 partners with we chat. Mobile channels now account for 40 percent of total traffic and is expected to be 50 per cent by the end of the year

Yo o x

In 2009 it launched Yooxygen, a platform for eco-conscious initiatives with various brands and celebrities. !!!

Yo o x

Yo o x

In 2012 YOOX starts selling art on-line creating a lot of controversy. Marchetti replies “The ritual of going to galleries or shopping will always remain despite the growth of the internet. The internet is just one window into the world.”

Yo o x

In 2012 launches shoescribe.com shoe-only web to set a new standard for the industry in terms of personal service each pair will arrive with a label for printing an image depicting your new shoes, so you can slap it on the box for ease-of-dressing.

!!

!Since 2012, YOOX Group is partnering with Kering in a joint venture dedicated to managing the mono-brand online stores of several luxury brands.

!!!

Yo o x

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The other players

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THE IDEA To buy designer dresses wholesale and

rent them, over the Web, for a night or two for a fraction of the price.

!Millennials are leading a migration away from ownership to subscribing and sharing: Spotify

invades our speakers, Uber our curbs, Airbnb our entire homes.

Rent the Runway wants to stream your wardrobe.

!https://www.renttherunway.com

RENT THE RUNAWAYFounded 2008

by Jennifer Fleiss & Jennifer Hyman

R e n t t h e R u n a w a y

Each day Rent the Runway and its software algorithms juggle more than 65,000 dresses and 25,000 earrings, bracelets and necklaces. !!

“We’re giving our customer access to things she wouldn’t have otherwise purchased, either because it wasn’t smart to buy it or she couldn’t afford it”.

!!

R e n t t h e R u n a w a y

The company just launched a new subscription service that lets customers borrow up to three accessoriesfor as long as they want for $75 a month.

!!

R e n t t h e R u n a w a y

September 2014 they opened their 3rd store "Our aim is to use retail to re-invent the service and technology experience of a traditional store so that customers leave with knowledge of everything they should be renting this season."

!

R e n t t h e R u n a w a y

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THE IDEA Couture before it hits retail.

!Moda Operandi allows customers to preorder

looks directly from designers, immediately after their runway show by placing a 50-percent

deposit. The site offers access to designer pieces that might not become available in traditional

luxury retail stores. !

This way, MO gives women the power to choose from the full collection.

!http://modaoperandi.com/

MODA OPERANDIFounded 2010

by Áslaug Magnúsdóttir & Lauren Santo Domingo

”Women today are really seeing the collections. They’re a lot savvier and more aware of the discrepancies between what they see on the runway and what they end up seeing in their local shops.”

!!

M o d a O p e r a n d i

M’O offers a personal stylist “just a click or call away” in addition to their private services “by invitation only”

M o d a O p e r a n d i

In December 2012, Moda Operandi launched Boutique, in-season shopping that is available to ship immediately.

M o d a O p e r a n d i

In September 2014, opened the second by-invitation-only boutique that will serve as a hub for their exclusive online trunk show.

M o d a O p e r a n d i

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TINKER TAILORFounded 2013

by Áslaug Magnúsdóttir & Matt Pavelle

THE IDEA Customize and Create Luxury Fashion.

!Tinker Tailor offers customers two options:

they can modify existing designer clothes or they can create a one-of-a-kind piece choosing from

a selection of fabrics and cuts. !

“Through conversations with women I felt like there was more and more of this desire to get something that was really special that others

wouldn’t be wearing, and if you could put a personal touch on it, even better” says founder

Áslaug Magnúsdóttir !

http://www.tinkertailor.com/

“It’s really about giving options that make the product relevant for, let’s say, a woman in the Middle East who needs to cover more, or a professional woman who may find a dress on the runway really beautiful but thinks it’s too short for her to wear in the office.”

T i n k e r Ta i l o r

http://www.tinkertailor.com/catalog/christian-siriano-22545/#/

T i n k e r Ta i l o r

gn

TINK TANK is a community that allows you to share the clothing you create on Tinker Tailor. Each week the most "liked" design is gifted to whoever created it. Every Tink Tank member earns cash or a shopping credit when anyone purchases its design.

http://www.tinkertailor.com/tink-tank-welcome/

http://www.forbes.com/sites/stevenbertoni/2014/08/20/how-mixing-data-and-fashion-can-make-rent-the-runway-techs-next-billion-dollar-star/ !

http://fortune.com/2014/09/03/where-have-all-the-shoppers-gone/!!

http://fortune.com/2014/06/02/yoox-fashion-luxury/!!

http://www.forbes.com/sites/stevenbertoni/2014/08/20/how-mixing-data-and-fashion-can-make-rent-the-runway-techs-next-billion-dollar-star/!!

http://fortune.com/2014/06/02/yoox-ceo-i-was-going-to-do-the-internet-in-a-beautiful-way/!!

http://www.wired.co.uk/magazine/archive/2014/09/features/yoox!!

https://econsultancy.com/blog/63414-net-a-porter-bets-on-social-commerce-with-new-netbook-ipad-app#i.19ad13m7n5e4cv!!

http://www.forbes.com/sites/onmarketing/2013/05/02/making-the-best-of-a-digital-situation-what-luxury-brands-can-do-to-catch-up-online/!!

https://econsultancy.com/blog/64767-where-are-luxury-brands-going-wrong-online#i.19ad13m7n5e4cv!!

http://fashion.telegraph.co.uk/news-features/TMG10932259/Net-a-porter-gets-physical-with-the-launch-of-Net-a-sporter.html!!

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9608247/YooxArt.com-Bag-a-Hirst-original-or-a-Balenciaga.html!!

http://www.vogue.com/869184/shoescribe-is-at-your-service-the-latest-shopping-site-from-the-creator-of-yoox-and-the-corner/

SOURCES

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thank you!

INFUSION is the weekly report released by Alquimia WRG.

Every Friday morning we have breakfast exploring insights on the edge of creativity, strategic thinking and technology.

If you'd like to get infused, feel free to contact us at infusion@alquimiawrg.com

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