As the world leader in online global luxury fashion, the YOOX NET-A-PORTER GROUP has become the go-to platform for luxury shoppers around the world. Sitting with A&E, Chairman and CEO Federico Marchetti gives an insight into the future of the business and the plans to continue leading the market.
What started as one man’s vision 20 years ago has become a global online retail giant with a client base of over three and half million high spending customer from over 180 countries. Today the Group’s multi-brand online stores include NET-A-PORTER, MR PORTER, YOOX AND THE OUTNET.
Federico Marchetti, Chairman and Chief Executive Officer of YOOX NET-A-PORTER GROUP founded YOOX in 1999. At that time most industry insiders and customers were still learning what the internet could offer when it came to fashion and luxury. Marchetti was ahead of the curve, managing to anticipate new customer trends and predict how markets would change and develop as the world of e-commerce grew.
After successfully developing YOOX not only in its own right but also operating the e-commerce sites of some of the leading global fashion brands, Marchetti successfully struck a merger with NET- A-PORTER founding YOOX NET-A-PORTER-GROUP in 2015.
Four years on and the group is the world’s leading online luxury fashion retailer and is going from strength to strength. With over 5,000 employees around the world, it is one of the fastest growing online companies in the world and in 2018 when YOOX NET-A-PORTER became part of Richemont, it was valued at six billion dollars.
Originally from Italy, Federico Marchetti now splits his time between Milan and London, overseeing the group. Marchetti graduated from Bocconi University in Milan with a degree in economics and after a short career in finance made the decision to pursue his entrepreneurial dream.
Discovering the accessibility of the internet was the starting point of Marchetti’s idea to launch his own company YOOX which officially began in 2000. Almost two decades on and with a hugely successful business and more advancements in technologies than anyone ever thought possible, Marchetti is looking to new technology and artificial intelligence to help ensure YOOX NET-A-PORTER continues to be the leader in the market.
Here we discuss the future of the company as it is today and what it is doing to incorporate the demands from global markets.
What is the main goal YOOX NET-A-PORTER is looking to achieve in the coming year?
Today, we are the world leader in online luxury and fashion, with well over $2 billion in revenues. I want to ensure that YOOX NET- A-PORTER GROUP is truly unbeatable for years to come. We’re doing this by offering the very best customer experience and by continuing to build a complete luxury ecosystem that is unique in the world.
At YOOX NET-A-PORTER we create luxury stores that sit in the palm of your hand. We use a mix of technology and human touch to give the world’s most discerning customers a truly luxury shopping experience, from start to finish. Our customers live on their smartphones, so we are obsessive about creating luxury experiences that make the most of mobility.
Our family of multi-brand online shops offer a perfectly curated selection from the world’s leading luxury brands, whether the customer is shopping for the latest luxury creations straight off the runway, the most on-trend fashions from the previous season or even a piece of art to decorate their home. And we also power many of the online flagship stores of leading brands such as Valentino and Moncler. Behind the scenes, are our sophisticated technology and logistics platforms.
What would you say is a challenge you face today and what are your plans to help you overcome that challenge?
When we wanted to strengthen our offering in the Middle East, we knew we had to find the best possible partner in the region. That’s why we were eager to forge an alliance with Mohamed Alabbar’s Symphony Investments group. Now we are working to deepen our presence in China. Just as we did in the Middle East, we turned to the number one player. That’s why, together with Richemont, we established a joint venture with Alibaba to become truly unbeatable in China.
In a market that is changing so quickly, how does YOOX NET- A-PORTER keep up with the latest technology?
We’ve always been pioneers at the intersection of technology and luxury. My concern isn’t how to keep up with the latest technology as much as choosing what’s right for our customers. Back in 1999, I imagined YOOX as the shop of my dreams; I saw myself as the customer. That focus has always guided the business. That’s why so much of our innovation is focused on the mobile experience.
We know that luxury customers live on their smartphones – all the more so in the Gulf region and in China, where sales via smartphones are significantly above the global average.
Is artificial intelligence something YOOX NET-A-PORTER is working with and how do you think the business can benefit from this?
Luxury brands have always aspired to give their customers an experience that is unique to them. AI opens up fabulous opportunities to take personalisation to a new level. Consider the online shopping homepage. No more will you see one page for our over three million customers. Instead, you’ll see three million pages crafted instantaneously for each customer, with a curated selection of luxury fashion, jewellery and watches, and editorial content that is suitable for their upcoming engagements.
Data such as weather, location, purchase history and more could, at a customer’s request, be used to create the ultimate luxury shopping experience, all powered by AI. That said, it’s important to remember that in luxury the human touch will always be vital.
Social media has become such a big part of consumers’ lives, how does YOOX NET-A-PORTER use this to move the business forward?
Social media has changed luxury forever; now, everyone has a voice. You see this in our private label, 8 by YOOX. These collections are generated by data – gathered from social networks, the web and customer behaviour – to guide our product development team.
Social media has also changed the way we interact with customers. We have over five million Instagram followers who can now shop with us without having to leave the Instagram app. At the same time, social media can be a very personal channel for our most valuable customers. Our personal shoppers regularly use WhatsApp, Facebook Messenger and WeChat to advise our clients.
As a global company, how do you focus on specific markets while keeping your overall goal and mission?
A fully localised experience has always been important for our customers around the world. We want to provide an experience that feels close to our customers and is aligned with their culture and traditions.
In the Middle East, NET-A-PORTER has produced exclusive Ramadan women’s collections since 2016, as well as featuring a modest dress section for customers in the region. We also offer a choice between our signature branded packaging or discreet boxes. A localised version of THE OUTNET site in the Middle East was our group’s first-ever dual- language site. Later this year, we will unveil other enhancements to the customer experience in the Middle Eastern market.
E-commerce has become such a big part of our lives, what do you foresee happening in the next five years?
The future of online is all about the smartphone. Thinking forward you have to imagine how the luxury shopper of the future will engage on their personal device. Augmented Reality will bring the catwalk into each customer’s home, voice recognition will make online shopping incredibly natural, visual search will make it easy to see a piece on the street and instantly purchase it on your device.
But I don’t believe in the death of the store. In fact, I see online and offline coming together to create a seamless luxury retail experience. We are developing this advanced omnichannel concept together with Valentino as one of our Online Flagship Stores.
Customer service is such an important part of the customer experience – how do you ensure you excel in this when much of your company is digital?
You need to strike the right balance between the human touch and the gains of technology. Our customers are very discerning but time-poor. They look to us as a trusted source of style advice, inspiration and product selection.
One of the ways we do this is through our Personal Shoppers, who work closely with customers. To assist them, we are harnessing artificial intelligence to build a giant database of taste that learns from 20 years of experience and recommendations of our stylists. With these insights at hand, our Personal Shoppers can offer an unmatched shopping experience to our top customers.
As online and offline shopping merge together, there will be many more opportunities to balance human and machine.
How do you think luxury products like high jewellery and watches can successfully translate to selling digitally?
There are no limits. We’ve had customers spend over $220,000 (AED800,000) for a watch on MR PORTER and $180,000 (AED660,000) for a piece of jewellery on NET-A-PORTER. Hard luxury is now one of our fastest-growing categories, and our customers in the Middle East are particularly interested in jewellery, often purchasing items alongside luxury fashion.
NET-A-PORTER recently launched EIP Privé, our first invitation-only destination that brings the experience of the private jewellery salon to the digital realm for our top customers. Along with watch exclusives and private viewings of the newest and rarest jewels, EIP Privé will provide personalised services including customisation, bespoke requests and sourcing of one-of-a-kind pieces.
How important is sustainability to you as a company and what are you doing to be sustainable?
I have always put a great emphasis on sustainability. In 2009, YOOX debuted YOOXYGEN, one of the first online destinations for sustainable fashion. More recently, NET-A-PORTER launched Net Sustain to help customers identify sustainable brands more easily.
As a group, 99 per cent of our plastics in operations are recycled and all our shipping boxes are plastic-free. Within the production of our own label 8 by YOOX, we are experimenting with bio fabricated leather and biodegradable nylons.
What changes would you like to see happen in the fashion industry to support sustainable living?
The pace of change needs to accelerate. There’s been a lot of progress in the past 10 years; the misconception that design, style and luxury could not co-exist with a positive social and environmental impact is a thing of the past. Still, I’d like to see a much broader offering of sustainable fashion.
What are your thoughts on the growth and trends in the Middle East?
The Middle East is definitely one of the most exciting markets for luxury. Our customers in the region are young, adventurous, mobile-driven and often purchase a broad range of luxury items every season. They really value exclusivity – we see this in the success in the region of our THE VANGUARD programme that leverages our expertise in scouting and cultivating emerging fashion designers.
Across our platforms last year, we introduced 400 new brands and 135 exclusive capsule collections including partnerships with The Row, Tiffany & Co and Saint Laurent, as well as the debut of Carine Roitfeld’s fragrance collection.
As an entrepreneur what advice would you give to others that are hesitant about following their dreams?
If you believe in your project, you need to act with conviction. I launched YOOX just months before the dotcom bubble burst. If I had waited, it never would have taken off. Instead, I ploughed ahead and conveyed my dream to some of the biggest names in fashion, long before anyone believed that luxury and technology belonged together.
What is the professional motto you live by?
Be courageous. There are many traits that make a strong entrepreneur or leader. But you can’t succeed without courage.
See more at net-a-porter.com.