BackDigitisation, sustainability to drive luxury fashion: Federico Marchetti
At HTLS 2020, Marchetti said that amid pandemic, beauty products and timeless luxury pieces have been in demand on Net-a-PorterThe fashion industry though late to push the sustainability agenda is finally catching up, he said
PremiumFederico Marchetti, chairman and CEO, Yoox Net-a-Porter Group (YNAP), who drove lifestyle retailing on the internet in the early 2000s with his flagship fashion site Yoox, on Friday said that the pandemic has helped accelerate demand for sustainable fashion and prompted significant digitization of apparel retail. Retailers will need to swiftly adopt to technology and embrace social media platforms as covid has prompted shoppers worldwide to spend more time browsing catalogues online.
Marchetti was speaking at this year's Hindustan Times Leadership Summit on Friday.
Marchetti has built a legacy lifestyle business online in days prior to the sprawling influence that social media platforms such as Instagram and Facebook had on fashion runways.
YNAP is backed by Swiss luxury goods group Richemont—that sells watches, jewellery brands such as Cartier and Montblanc to the world’s wealthy. Richemont acquired YNAP in 2018.
Earlier this year, the Swiss luxury goods maker, Richemont, along with China’s Alibaba invested $1.1 billion in luxury e-commerce marketplace Farfetch to grow its influence in the Chinese online luxury market.
The move puts Richemont in a key position when it comes to selling goods online at a time when the world over, shopping habits—be it for grocery or pricey perfumes—are shifting online.
For the world’s legacy retailers this means a shift in the how and what they sell.
Marchetti said on Net-a-Porter beauty products and timeless luxury pieces have been in demand during the pandemic.
“Recently, especially in the last six months, we’ve seen a big, big increase in everything that is timeless and investment pieces. So the brands that are doing the best are those brands, with top quality, with the most-luxurious touch, in terms of fabrics not necessarily the big logos, but the brands and the items that people can wear from generation-to-generation and not only from season-to-season, including jewellery and watches in these categories," he said.
Net-a-Porter that also retails pricey beauty products from Marc Jacobs and Charlotte Tilbury saw sales of beauty and skin care products surge over the last six months as shoppers continued dressing up—albeit for virtual meetings. “So, beauty, for example, is a category that on Net-a-Porter is flying. Probably during these covid times, in the sense that the people they want to look good also on Zoom. Also, male beauty and skincare is one of our hottest and highest growing categories," he said.
The influence of social media on the fashion industry—both on sales and how it is marketed -- has increased with covid pushing more consumers online.
Marchetti said the company has been working closely with Instagram for years with Net-a-Porter being among the very first retailers to use Instagram's online shopping feature.
Retailers today, he said, can do some amazing things using technology to create content and entertainment to help deepen consumer engagement while coaxing consumers to shop for beauty products or jackets online. "So, we are not just a shopping site we're the media, in a way, now. I always thought we are an "entertailer" that is, a mix of entertainer and retailer," he said.
The retailer also saw sales of sustainable fashion under its Net Sustain collection surge. The fashion industry though late to push the sustainability agenda is finally catching up, he said.
“Yes, thank goodness, there is more and more consciousness about this issue (sustainability) from both brands and consumers. So, for example, during the recent Cyber Monday (sales), we've seen a boom in sales for everything that is sustainable in our offering—both at Net-a-Poter and Yoox. I think the pandemic has been an accelerator of this consciousness, as well as the digitalization of the brands, but also the sustainability part. Probably fashion has been a bit late in recognising that, but definitely fashion brands and fashion the big fashion groups are definitely catching up," he said.
Estimates by the Boston Consulting Group have pegged a 45% drop in luxury spending this year especially as shoppers in the United Kingdom and the United States continue to witness a surge in covid cases, Bloomberg reported in September. The effect of this was already seen in legacy fashion brands filing for bankruptcies in the west.
“I think that we are in a very fast-paced industry that requires a constant continuous and relentless evolution," said Marchetti. The companies that are in trouble, are those that have rejected this constant change in technology.
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