When it comes to the future of luxury spending there is no denying that e-commerce players have been one of the biggest game-changers over the past few years.
Mytheresa CEO Michael Kliger
The debate between physical and virtual shopping continues to divide the industry, but ultimately, in the current situation and moving forward, there seems to be plenty of space for both. Yes, the physical shopping experience offers glamour and service that many luxury customers are looking for, but more so than ever we are looking for convenience and fast results, as well as access to more brands and products than ever, and that’s where luxury e-commerce has found its space. While there are many players in the market today, each of the powerhouse brands is surely carving out its niche and the opportunities are endless. One of those leading the way is German-born luxury retailer Mytheresa.
Mytheresa began life as a physical store in Munich where it was a refined destination for the well-informed luxury shopper to discover a carefully curated offering of ready-to-wear and accessories. This soon developed into an online shopping destination which in 2006 took the same concept and transferred the experience to an online one. Over the past two decades, Mytheresa has seen global expansion but has stayed loyal to its knowledgeable customer base, by remaining refined and curated. The brand’s unique selling point is its ability to offer exclusive collections and experiences for its shoppers to establish a close relationship that’s built to last.
As the world of e-commerce continues to grow, technology is aiding the way for greater opportunities and ways to diversify the business. Leading this drive at Mytheresa is CEO Michael Kliger who is tasked with ensuring the growth of the business in a way that remains loyal to the DNA of the company. Here we find out more about the vision of Mytheresa and how the brand continues to succeed in a market that has fierce competition and an ever-demanding customer base.
Pre-Fall 22 Campaign WW
Congratulations on the success of Mytheresa tell us about what you have been working on this year so far?
At the beginning of the year, we had an amazing opportunity to meet our clients and bring brands together. Highlights included an event in Miami in partnership with Christian Louboutin, and one in Monte Carlo with Aquazurra – both turned out to be longer events than we anticipated and lasted two days instead of one. Everyone wanted to be out and that was clear as we moved into the next part of the year when clients were preparing for vacation. We saw our customers planning for longer and more exciting vacations and we provided them with exclusives from brands such as Zimmermann and Valentino. It was truly exciting to see customers wanting to experience things again. So, this has been a great highlight.
From last year, we saw a great demand for eveningwear, and many customers had the desire to go out again and dress up. We saw a great demand for dresses and heels and gowns, and this became a very strong sector for us. Then, later this year we saw an explosion in the demand for summer pieces and this was the case across the world except for some small pockets in Asia where travel was still not possible for everyone. Our customers are driven by occasions and now after returning from vacation, they are going back to dressing up because there is still a social calendar to make up for.
The second highlight in the last year was the launch of our home and lifestyle category. We wanted to further upgrade the offering for our high-end customers, and this was a great way for us to do it and also a chance for us to have a category that appeals to all genders. This has also allowed us to expand into the luggage sector which is an important element as a lot of our customers are constantly travelling. We were proud to be the global partner for Rimowa for three months, exclusively offering their new colourway. Lifestyle also includes pets and with that, we were able to exclusively launch the Gucci Pets collection. It’s great to have this separate category and we believe there will be more opportunities there.
The final highlight is that we have started construction on an additional central warehouse in Germany. We just opened the first building and then we have a second major part opening earlier next year. That will be a major exciting initiative because it will make our services even better in terms of delivery.
Can you tell us more about that?
The unique thing about this warehouse is that it will be located directly at Leipzig Airport which is the location of the International DHL air hub. This enables us to continue taking orders on our site until 10pm and catch the late flights to hubs across the world. Some of these flights can leave Germany late at night and get into the United States hub of DHL at midnight for example, which allows them still to catch the planes to regional hubs in the US in time for the morning deliveries. This will greatly improve our delivery business and we will be faster than a US player that ships on land in trucks. It’s very exciting and will make us faster and more convenient internationally.
How in your opinion, do you think the digital world is changing the luxury industry?
First of all, I think it is the consumer that’s changing, and this is a consumer who has a lifestyle where he or she doesn’t have the time to go to stores, they want to shop in a high-end way but they also want convenience and I think that’s probably the biggest benefit of e-commerce. What we see and what we are focusing on as a business is that it must be luxury, but it must be convenient. Customers do not want a shopping journey of hours of discovery and therefore it needs to be perfect in terms of image and touch, but also efficient and quick. I think this is very clear. The quality of service also needs to be high because any reason for you to call or email customer care means we are doing something that’s not efficient. We don’t want it to be a hassle for our customers. I often have discussions that there is a fault line between bricks and mortar and online and I think that’s the wrong way to describe it. The fault line is experience or no experience. The outstanding physical stores will continue to thrive because if you go to a store as a customer, you have an amazing experience, and there are online shops out there that just don’t focus on the customer and therefore will fail. So, it’s not that online or physical stores will automatically fail because of the type of store they are, but more about the customer experience and a great customer experience is not translated into fussiness. It is about getting things done in a pleasant way.
How do you build a relationship with your customers when you’re not physically meeting them in person?
On one hand, it is a lot about the user experience and the design of the page. I think everyone knows from their own experience that mobile phones are now so intuitive. No one reads the manual because they don’t need to, and that is the best compliment you can get about your site. But then, as customers spend more or are heavily engaging with us, we offer them personal shoppers – some customers don’t want one but many are delighted – and then, of course, it’s about creating an individual relationship that is defined by the customer and their needs. Some people want more of a concierge service, some want more of a personal shopper. It is important to have this personal interaction and to become a go-to person for the customer. Services can break down, but then if you have that person on What’s App to contact and have a conversation with who can help, it will give you peace of mind. Or you can get in touch with them to share your criteria for an event you have coming up, for example, there are many ways they can use our personal shoppers and build a level of trust with this person who becomes your go-to. And then on top of this, we offer real highlights in the form of physical events to our customers. This gives them something truly special in the form of money-can’t-buy experiences. It is also a chance for them to meet their personal shopper in person and that is how we build on this relationship, and our customers can really benefit from having someone they can depend on.
LIFE Seasonal Campaign
How do you stand out from competitors when there is so much constant development in the industry?
There are many aspects I could focus on here, but I think the heart of it is that we truly focus on the luxury segment and therefore on the luxury consumer. This is not the aspirational luxury consumer; this is the wardrobe-building-multibrand consumer and we focus only on them. We have a small assortment in terms of our number of brands, but we have the best-curated ones. So, if you look for Saint Laurent for example, we believe we have the best offering of Saint Laurent for you, but we don’t have 1,000 products by Saint Laurent or even 1,000 brands on our site. That is not the concept of our business. And as we focus so much on it, there are a lot of characteristics that follow that. We have great loyalty from our customers. These are people that don’t just buy once or twice, they buy constantly year on year. I always remind people not to look at us as e-commerce but as luxury and luxury tells a story. From that, we have high loyalty and high Average Order Value (AOV), and we are therefore more profitable, meaning we can afford to invest in excellent packaging and excellent service and so it becomes a cycle. Because we have this special, interesting customer, brands are interested to talk to and collaborate with us, and that’s why we have these incredible events and why we manage to keep our customers returning.
Partnerships and exclusive collections are very important to Mytheresa, how do these come about and what are the criteria when you are working on these collaborations?
We have been in business now for many years and so it has become a continuous dialogue. Our buyers and marketing teams are constantly in discussions with the brands, so the collaborations and exclusive drops are often a natural evolution of a relationship that is already there, and the ideas are developed jointly with the brands. We did an exclusive event with Pucci in Capri for example, which was at the moment that the brand reinvented itself, and for these moments, brands are looking for partners to tell their stories. So, we start with the story and from there we develop ideas and the ones that we feel are exciting for our customers are the ones we want to share through a unique experience.
Tell us about some of the new technologies that you might be using or testing to help the business move forward.
Technology is a fundamental existence for our business, but it’s a means, not an end. No customer makes a deliberate choice about the technology they want when they are looking to buy an item. Different elements go on behind the scenes of course, but on a front-facing side what we are looking into now is the metaverse, because we feel it adds a new experiential layer. It’s not that we believe that virtual fashion is something that defines the future, but the technology is such that you can provide immersive experiences if you are embracing this world in the right way, and I think there will be even more opportunities to come. Our customers might not want to buy something virtually, but if they can escape to this world for ten minutes and be on a beach in Tahiti for example, wearing some stylish luxury clothes – why not? It has been scientifically proven that these experiences are today of such quality that they do change your blood pressure and your mood. There is an escapism element, and this is what we also know the physical version of fashion to be as well. We buy something because we want to bring joy to our lives, and I think this is the aspect we want to explore with the Metaverse. We are looking into this because it is another level of experience that we can provide our customers and we want to be the platform through which they can access these experiences, be it physical or virtual. I believe the physical world will always remain super-important but the virtual one allows us to add another layer, and this is a great option that I think our customers from benefit from.
What is your vision for the growth of the company and the future for the company?
The vision is clearly to be the best destination for the digital luxury shopper. That’s what is driving our global growth and our expansion into new categories beyond just womenswear which for many years was our main focus. This will clearly also drive our view on services. The vision is that we want to be the one destination that comes to mind when you think about luxury – luxury inspiration, luxury shopping and luxury experience.
What can you tell us about sustainability at Mytheresa?
Again we are working on it because it’s important to our customers and also to our employees and investors. At the beginning of this year, we published our Mytheresa Commitments, clearly laying out our objectives and targets in this sector, and we have just completed our first fiscal year on which we will soon be releasing a report. It’s important for us in the sense that our customers don’t want to buy something exciting that they might have a negative feeling about. We don’t see sustainability as the main driver of buying a luxury item, but it could be a massive detractor. More and more people don’t feel good spending a large amount of money on something if they have concerns about the manufacturing of it, the materials, the conditions it’s manufactured in etc. We have made good progress, we will never be finished, but we want to limit the negative impact of our growth. We have become carbon neutral, we are committed to being plastic and waste-free in the sense that the waste we produce is recycled or prevented, to begin with, and there are also targets around diversity and inclusion which has been a major initiative inside our company. So, it is a multi-faceted project that reflects the interests of our customers and our shareholders and we are very excited about this journey but we are also very aware that it is a journey, it’s not something that will happen overnight. As with any business, there is always going to be a negative footprint but what we can do is to try to mitigate and limit this and at minimum be very transparent about it as that is what our customers want.
Kids FW22 Campaign
What can you tell us about Mytheresa in the Middle East and can we expect to see you back here any time soon?
We have the intention to come back in the coming months which is very exciting. The region is important to us for multiple reasons. One is the amazing customers that we have there in terms of their taste, and their spending – it is a wealthy region and a region that has high knowledge of luxury. The countries in the Middle East are advancing so fast and that gives us very exciting opportunities. If you look at the development in countries such as Qatar, Saudi Arabia and Kuwait, some amazing things are happening and that gives us exciting opportunities as a company. We have started doing events in Saudi and Qatar and the level of education that people have in these countries is fascinating. Yes, we must respect the cultures in the region, but our teams and our personal shoppers are so impressed by the knowledge our customers have there.
