Mona Johanna Thelemaque 1 Online Marketing Paper
NET-A-PORTER DESCRIPTION & HISTORY Net-a-porter Group Limited is a privately held London-based online luxury retailer that offers more than 300 designer brands, from the world’s most renowned designers, such as Christian Louboutin, Yves Saint Laurent, Oscar de la Renta and Roberto Cavalli, to new young designers. It is said to be the largest, most coveted and most successful online shop for women’s designer fashion. Net-a-porter was founded in June 2000 by Natalie Massenet. She was born 1965 in Los Angeles as daughter of the model Barbara Jones and the journalist Robert Rooney, and grew up in Madrid, Paris and Los Angeles. She studied English literature, worked as a model and as a fashion journalist for “Women’s Wear Daily”, “W”, and “Tatler” in the 90’s. Merging her talent in writing and her hobby to shop, she founded a shopping website that looks like a magazine. Natalie Massenet was one of the first to recognize the increasing importance of selling high-end consumer goods online. The US market research institute Forrester attests her pioneering role. The online business became profitable in 2004 and has experienced a steady growth ever since. When the Swiss luxury goods maker Compagnie Financière Richemont SA acquired Net-a-porter in April 2010, its value was estimated at approximately $533 million. Natalie Massenet is still the executive Chairman today. The company currently employs about 600 people in London and New York. According to the company’s own
Mona Johanna Thelemaque 2 Online Marketing Paper records, the website has about 4 million visitors worldwide every month and delivers 170 countries with its products. Besides Net-a-porter, Massenet also launched “The Outnet”, the outlet-portal for discounted designers’ second-season-wear, in March 2009 and “Mr. Porter”, the shopping adventure for the fashion-conscious men, in February 2011. The name net-a-porter is inspired by the French term prêt-à-porter, which means readyto-wear in English. The first segment of the term is altered to create a link to the company’s digital character. This is also achieved with the other online store named The Outnet, which derives from the word “outlet”.
NICHE Net-a-porter Group Limited operates in the luxury goods market as online retailer. It offers the looks of the biggest fashion labels even before they are available in stores, selling runway-fresh fashion to its customers. When Massenet introduced her idea to the market, the concept was revolutionary. Never before had styles from the runways or fashion magazines been readily available to the public, partially due to lack of supply and geographical restraints. Therefore, demand created by new publications largely remained unsatisfied. When the dotcom bubble evolved in 2000, Massenet decided the internet was the perfect platform for her business to offer immediate delivery of high-end products in demand, worldwide and right to the customers’ door. Massenet proved that shopping
Mona Johanna Thelemaque 3 Online Marketing Paper online was indulgent and easy: She made same-day deliveries available to customers in London and New York. Also, the website informs the customer about the exact measurements for each garment. With her focus on customer-service and exquisite packaging, she managed to distinguish herself from then-competitors such as boo.com. Today, many designers sell their collections online and almost every department store has its own e-commerce site with news feet and other features. In order to compensate for the offline shopping adventure, Massenet created a digital hybrid between a store and a magazine, the secret of its competitiveness: Content is updated weekly and new products are available every Monday, Wednesday and Friday. The editorial element serves as a shopping guide and a source to find out about whatâ€™s in style and helps to keep the customers engaged. To summarize, net-a-porter achieved to capitalize the four major trends in the fashion industry: The collaboration of big brands and designers, online shopping, fast fashion, and pop up stores. Today, designers like Stella McCartney create fashion exclusively for net-a-porter. It also sells the label â€œKarlâ€? from Karl Lagerfeld exclusively since January 2012. Three years ago, net-a-porter noticed the market niche for the online sale of discounted luxury goods and launched its sister site, the Outnet.com. Again, Massenet proved her instinct for the industry and set an example for others, such as EBay Inc. and Gilt Groupe Inc., which are now following her lead.
Mona Johanna Thelemaque 4 Online Marketing Paper INNOVATIVE FEATURES Social Media Sites & Apps: Net-a-porter has its own Facebook site which is used to inform visitors but also to advertise products and campaigns. Net-a-porter, for example, celebrated its 500.000th fan of the website through a viral campaign and hosted several Secret Sale Events for fans only, with discounts of 50% on Facebook. Fans can follow Net-a-porter on Twitter and exchange information and opinions on the latest fashion-related matters. The website also supports its own Video Blog on You Tube to keep the fashionconscious up to date. Net-a-porter offers an iPhone and android app that allows the user to take advantage of all the essential features of the website on the go: Shopping, creating and managing wish lists, reading fashion news and watching videos. The weekly magazine app for the iPad serves as an interactive shopping guide as well.
Net-a-porter Live: The live feed feature in form of a digital world map allows net-a-porter staff and customers to follow real-time purchases, including information on which items are purchased and in what part of the world. It also indicates how many users are online at the moment. Trends in customer behavior and buying patterns can be derived from this
Mona Johanna Thelemaque 5 Online Marketing Paper information. For the customer it is a great opportunity to get inspired by fashions other customers are purchasing, adding to their wish lists or sharing with friends and to interact globally. Thus, the tool indirectly provides great advertising because the attention of the users is drawn to items they may have never seen before or they would have never been interested in, which potentially creates interest in new items. Net-aporter Live is secure, all users’ information remain anonymous and private. The world map changes constantly. When the “Add to your Shopping Bag” button is pressed, the world map turns into one’s direction.
Net-a-Porter TV Users can shop their favorite designer items as they browse exclusive video content. They can watch four different channels: “Runway”, “Who is Who”, “Trends 101” and “Flashbacks”. Viewers can filter the content by people or series. They are able to share, like, add and comment on the videos. Multiple platforms stream net-a-porter TV, including mobile devices such as iPad and GoolgeTV.
Virtual magazine A new edition of the online magazine is publicized weekly with the latest looks and the hottest news of the fashion industry.
Mona Johanna Thelemaque 6 Online Marketing Paper Pop-Up Store Campaigns Net-a-porter created a pop-up store in the course of an augmented reality campaign in January 2012 to celebrate Fashion’s Night Out. The company pasted up an entire shop window with pictures of its products under the title “The Window Shop” and offered exclusive designer collection pieces. Thanks to the corresponding net-a-porter smartphone, iPhone or iPad App, interested parties could bring the products to life and also buy it on the spot. Herewith, the brand achieved to attract attention and push its sales. To present Karl-Lagerfeld's new collection, Net-a-porter applied a similar marketing strategy. It created 5 pop-up stores simultaneously in Berlin, London, New York, Paris and Sydney. With the above mentioned Smartphone, iPhone or iPad App, attendees took pictures of their favorite outfits from the posters. The app recognized the outfits and the users were directed to net-a-porter.com. The system randomly chose winners of Karl Lagerfeld’s outfits among all users. Complementary goodie bags and coffee were distributed.
BUSINESS MODEL / REVENUE STREAMS Net-a-porter applies a B2C method of retail within the luxury market and its way of doing business is best described by the Merchant Model, which is “the establishment of an electronic storefront on the World Wide Web, an information-technology infrastructure capable of receiving and processing orders, appropriate security measures to assure the safety, and authenticity of transaction information, and means for procuring
Mona Johanna Thelemaque 7 Online Marketing Paper payments—and completing orders via shipping and delivery.“ Wikidot. “Net A Porters Business Model”. Web. 25 February 2012. Net-a-porter’s ultimate goal is to increase profits by converting visitors of the website into regular customers. Its revenues stream from selling their products online, targeting a customer that demonstrates a high sensitivity to seasonal changes in fashion and inelastic price sensitivity. Over the last ten year, net-a-porter has shown growth with revenues well above $100 million a year. The business concept is based on the following factors: The customer is provided with the information on what to buy and the possibility to access these goods with no risk involved. “The average order value on Net-a- porter is £500... However £500 is dust for the VIP customers, the women who account for 1% of Net-a-porter's business but 20% of sales. Of Net-a-porter's top spenders, 19% are women running their own businesses.” Wiseman, 2010. “One-click wonder: the rise of Net-a-porter”. Web. 23 February 2012.
Here are some reasons why net-a-porter’s business model works:
At net-a-porter it is all about customer service: The company delivers within the same day in London and New York, anywhere else within 48 hours. There are no shipping costs within the US and if a customer is not happy with the purchase, the items will be picked up the next day. It is possible to return the item within 14 days free of charge.
Privileges, such as pre-sale collection pieces and exclusive runway shows, used to be reserved for people with celebrity status, now they are available to net-a-porter customers. Customers enjoy this feeling of empowerment, which adds to the website’s
Mona Johanna Thelemaque 8 Online Marketing Paper attractiveness. In 2009, for example, Net-a-porter collaborated with Alexander McQueen to “offer pre-registered customers an exclusive opportunity to view a private runway show and purchase eight looks from the Pre-Spring 2009 (i.e. resort) collection a full two months before the items are available anywhere else.” The private runway show was streamed on the website with “behind-the-scenes footage from the show and exclusive commentary on the collection.” The Luxe Chronicles, 2008. “Net-A-Porter ReDefines What It Means To Be Fashion-Forward. Web. 23 February 2012.The event was advertised via an elaborate multi-media campaign with e-mail alerts, teasers, interviews, etc. In the beginning, net-a-porter profited from Massenet’s connections in the industry and her excellent reputation and managed to quickly build up creditability as well as to create advantageous network effects. Today, net-a-porter benefits from current market developments, such as the increasing readiness of customers to purchase expensive goods online, a growing international customer base and a global increase in online sales of luxury goods. According to Bain & Company, the online sales of high-price merchandise is expected to rise by 20% yearly, reaching a total of around $15 trillion by 2015. Moreover online shopping takes down the walls of intimidation one might feel to enter a high-end fashion store. It fits into any busy schedule and safes time. This is important, because the luxury consumer is time poor but demands immediate access to “the new” out there. Those needs can be satisfied through an online store, because it is much more flexible in its assortment, allowing changes more frequently. Additionally, spending much online feels less real and therefore reduces the feeling of guilt.
Mona Johanna Thelemaque 9 Online Marketing Paper As mentioned before, net-a-porter’s hybrid character is its comparative advantage, putting e-commerce at the center and “using editorial content to reinforce consumer’s engagement and make the website more “sticky”… The editorial drives sales and provides them with a creative voice.” Wikidot. “Net A Porters Business Model”. Web. 25 February 2012.
In order to remain profitable and sustainable, the net-a-porter group as a whole pursuits a growth and diversification strategy: The group also derives revenues from net-aporter’s independent sister company “The Outnet”. This launch provided the net-aporter group with the access to a new market with a different target customer, who demonstrates a lower sensitivity to seasonal changes in fashion and higher price elasticity. Diversification was achieved through assuming the role of an active market player in the largely ignored sector of online luxury goods for men, which provides a less cyclic revenue stream.
PROMOTIONAL OPPORTUNITIES FOR MARKETERS Net-a-porter has an excellent reputation in the industry. The website has been awarded several times, for example by the 2006 In Style Awards as Best Online Shop, and is known to have a first-class portfolio of designer labels and excellent content. Being a part of this exclusive community is almost like an affirmation of belonging to the crème de la crème of the world’s fashion designers or marketers.
Mona Johanna Thelemaque 10 Online Marketing Paper Net-a-porter’s fashion-forward, international community of about 4 million users every month, of which 97% are female, provides marketers with an incomparable visibility. Through the affiliates program with other websites, which ideally drives viewers of other websites to net-a-porter.com, visibility is even further extended. Due to its high traffic volume, the overall display impact is enormous. Through the collaboration with net-aporter, marketers can have access to its large, international customer base. All the innovative features described above provide marketers with great tools for promotional purposes. Net-a-porter cultivates its aforesaid interactive dialogue with its customers and hundreds of thousands of fans through its social media sites, apps and its social hub, the Fashion Fix. Again, marketers can take advantage of the editorial character of the website, featuring so called advertorials. The content of the online magazine is composed weekly by the in-house creative team. It demonstrates impressive click-through results and attracts a vast number of viewers. Sponsorship, pre-rolls (10-seconds) and MPU (300x250) are advertising opportunities offered on neta-porter TV.
In addition to everything mentioned previously, net-a-porter issues an in-house print magazine twice a year, “which brings the interactive editorial experience into print format”. Net-a-porter. “Media Information”. Web. 28 February 2012. It is distributed among its highest spending and most loyal customers, a total of about 40.000 customers. It is available for purchase as well. It provides marketers with an exceptional tool for luxury goods advertising, automatically addressing the right customers.
Mona Johanna Thelemaque 11 Online Marketing Paper Interested parties have the option to choose between single, double page and inside cover placements.
NAVIGATION AND FUNCTIONALITY WALK THROUGH Despite its vast selection, Net-a-Porter displays a clear lay out through sensible and stylish structuring. A toolbar navigation system at the top and the bottom of the interface makes browsing easy, convenient and fun. On the top left corner of the website, the user has the option to determine the country he/she is shopping in and on the top right corner, the user has the option to sign in, subscribe to Email updates and view his/her shopping list. However, latter requires an existing account with net-a-porter. The keyword search helps to navigate the user directly to a certain product or website feature. Visitors can select from the following widget options at the top of the website written in bold white letters on black background: “What’s new”, allowing new fashion discoveries to stand out, “Designers”, “Boutiques”, “Clothing”, “Lingerie”, “Bags”, “Shoes”, “Accessories”, “Magazine”, “Gifts” and “TV”. Each of those widgets features a dropdown list to direct the user exactly to his/her desired website destination. The designer’s drop down list, for example, offers visitors the choice to either see current styles from a particular designer, check out new season pieces or exclusive collections. In the section called “boutiques” users can shop according to occasion.
Mona Johanna Thelemaque 13 Online Marketing Paper and the net-a-porter’s culture and team, etc. “Advertising” provides helpful information for potential collaborating marketers. It includes a media kit describing the promotional opportunities available and the outreach of each media tool. The affiliates program addresses other first class fashion websites interested in collaborating with net-a-porter and presents the benefits of doing so. Users can also get connected to net-a-porter’s social media websites and they have the option to subscribe to receive the latest fashion news via email. On the right bottom corner, net-a-porter allows the user to access the Mr. Porter website. The use can also connect directly to its apps and fashion fix, net-a-porter’s social hub, which nourishes the user with information in the categories “Newsflash”, “Video”, “Magazine” and “Photo Diary”. The editorial staff writes articles about new fashion trends, designer portraits and produces video-interviews. This site is really all about customer engagement and shows the latest Google alert news about Net-a-porter. It also provides the viewer with news and links to all social media sites supported by net-a-porter. Every user may create a wish list at any time during their shopping experience which allows them to view details of the respective product page, share items or entire lists with friends on Facebook, view comments and make comments within the net-a-porter community. However, only registered users can save their list. Of course, it is also possible to shop the list by adding items to the shopping list.
Mona Johanna Thelemaque 14 Online Marketing Paper PERSONAL STATEMENT In my opinion, net-a-porter truly offers a unique shopping experience to its customers and a great fashion entertainment for every viewer of the website. Net-a-porter.com is clearly structured and has a lot of fun features and content to discover, so that it is easy to spend a lot of time on the website. It is a great source of inspiration for every fashionista. I believe net-a-porter will remain a strong market player in the years ahead with its anticipatory business strategies addressing growth and diversification. While many competitors still have a far way to catch up with the group, it has the time to include more engaging features and further improve the looks and navigation of the website. Its acquisition by Richemont also provided access to new capital which can be invested and used to make it even more competitive and sustainable. Net-a-porterâ€™s reputation, outreach and innovative features will continue to attract interested marketers which will in turn heighten the popularity of the website.
Mona Johanna Thelemaque 15 Online Marketing Paper BIBLIOGRAPHIES
Mona Johanna Thelemaque 16 Online Marketing Paper http://www.guardian.co.uk/lifeandstyle/2010/jul/11/natalie-massenet-net-a-porterinternet-fashion
Mona Johanna Thelemaque 17 Online Marketing Paper http://www.theluxechronicles.com/the_luxe_chronicles/2008/09/it-was-one-thin.html