Is The Best Solution Provided By Yoox?

According to the world clothing shoes and hats net, we constantly search and write about.

Over the years with the retail industry, we have found that the biggest and most likely change is the rise of online shopping.

But compared with other market segments, the Internet development of luxury goods is still relatively backward.

Historically, this fear is deep-rooted because of luxury.

Fear of Internet sales will damage the original image of exclusiveness; consumers have always been worried that online shopping can not touch the goods they will buy heavily, while giving up the experience value of visiting the luxury brand store of the holy land.

But the aforementioned two kinds of fear and fear are changing rapidly.

Consumers of luxury goods and luxury goods

The acceptance rate has increased rapidly. We believe that the online market penetration of the luxury goods industry will double in the next 5 years.

This is a huge business opportunity, which is also a huge challenge for Yoox Net-a-Porter group, the largest luxury Electronics Group in the world after merging in 2015.

The group's slogan may also cover all businesses: Net-a-Porter serves the seasonal full price market; Yoox aims at seasonal fashion.

But now the major luxury brands have learned the lesson and invested more and more resources and concerns in their online operations.

At the same time, in such an attractive market, there will be a newcomer with a new business model, which is what we see today.

In the online discount online shopping platform, the business mode of Yoox seems to be the best.

Yoox uses second pricing to bring new products to the market, and build a customer base based on quality products.

For fashion brands, such a mode can protect Pricing Integrity to a greater extent compared with many Yoox counterparts, especially when compared with the "flash buying" sales mode and those who offer the suggested retail price on the website headlines.

But luxury brands still have risks to decide to leave the more exposed online discount channels to manage their own discount businesses.

Net-a-Porter's full price aggregation model looks more sustainable.

The quarter sales are divided into two parts, one is the direct sales channel provided by the brand based e-commerce platform, the two is through multi-channel competitors (such as department stores) and pure virtual competitors (Pure-play, such as Net-a-Porter) and other brand Brand (Aggregators).

All two play an important role.

Brand official website can not only serve as a sales channel for loyal customers, especially those often interacting with brands, but also serve as a part of marketing tools to help achieve brand integrity.

At the same time, polymers can provide multiple choices, inspirations and suggestions for consumers who do not prefer a single brand.

The customers of these polymers can provide incremental sales for the brand, and provide directions for new customers who do not have access to the official website of the brand.

Luxury and luxury consumers' acceptance of e-commerce has increased rapidly. We believe that the online market penetration of luxury goods industry will double in the next 5 years.

But when Net-a-Porter was founded, many luxury brands had very limited knowledge of the online world. They also avoided using this channel and knew little about their internal strength.

Therefore, as the pioneer of early brand aggregation, Net-a-Porter established the traditional wholesale business mode, which echoed with traditional department stores, bought brand products and propagandize to consumers.

This is a simple solution for the brand to provide online business: Net-a-Porter is just another wholesale customer who can provide incremental sales to online consumers.

However, with technological progress, brand and retailer's ability to operate in the Internet world, will such a business model be the best solution for brands or consumers? I'm afraid not.

New and perhaps more suitable business models for luxury brand strategy are emerging.

This includes the Farfetch operation model.

Unlike the established brand name brands, Farfetch is a platform operator, concentrating only the inventory of its boutique partners online, presenting itself without holding any inventory.

On the contrary, the algorithm adopted by Farfetch turns customer orders to specific boutiques holding stocks and links to local logistics distribution networks.

Customers' orders are directed to different boutiques based on geographical location, express cost and distribution records of boutiques.

For customers, there is almost no obvious difference between buying products using Farfetch platform and Net-a-porter platform.

But by working with more than 400 boutiques so far, Farfetch can provide more brand choices. It also benefits from boutique store partners' professional purchasing knowledge and efficiently selects and plans relevant product ranges.

Because no inventory management is needed, the cost of on-line boutique has been minimizes, and the need to do so is basically limited to image processing and data mapping.

For boutiques, the advantage lies in incremental sales, and there will not be any risk of "killing each other" online, and more customers may enter their own stores, because selling on Farfetch also allows customers to take their own products or return products in their boutique outlets.

Most importantly, orders will also generate incremental profits under Farfetch.

The Farfetch model is of course effective: the company grows at a rate of 60% per year and is expected to exceed Net-a-Porter in 24 months to become the largest online brand aggregation.

As the market is changing and competitors are becoming more aggressive, Yoox Net-a-Porter is cutting its market share.

In fact, we are worried that when the group has to manage the challenging enterprise merger, Yoox Net-a-Porter may not be able to keep pace with the industry.

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