Luxury online retail platforms are no longer considered a revolutionary concept as successful high-end e-commerce sites have just as much recognition as labels. Platforms like Net-a-Porter, Ssense, Farfetch, Matches Fashion and Mytheresa have created a brand identity of their own. Third-party online retailers have proven that consumers prioritise the acquisition of the product over the in-store purchase experience. However, without the conventions of a traditional bricks-and-mortar to help facil
elp facilitate sales, online luxury platforms have had to lean into alternate retail pillars; inventory, loyalty and storytelling. Net-a-Porter, Farfetch and Ssense have built brands that stand on their own despite being third-party e-commerce companies, thanks to different strengths and weaknesses. Inventory defines image The inventory strategy adopted by luxury e-commerce retailers has a direct effect on their ability to build a coherent brand. Net-a-Porter is considered a pioneer in the online luxury space since its founding at the start of the millennium in the year 2000 by Natalie Massenet. “Net-a-Porter is much more of a wholesale model. They’re buying the inventory, they’re holding it themselves but they’re also taking that risk if something doesn’t sell,” explained co-founder and CEO of The Growth Activists, Rosanna Iacono. Ssense was launched in 2003 by brothers, Rami, Firas and Bassel Atallah and considers itself a fashion outsider despite its strong industry influence and ability to sell out brands. “When it comes to Ssense, I think what’s interesting is they’ve got a bit of a hybrid approach,” Iacono said, referring to their mix of a wholesale and marketplace model. Farfetch was established in 2007 as a global luxury platform designed to connect creators, curators and consumers. “Farfetch has de-risked by going into more of a marketplace model, for them is that they’re not able to create that same highly curated, highly deliberate image,” said Iacono. Much like third-party online luxury retailers, legacy designer brands too have started to see the benefit of controlling their inventory and in turn their image. “Over the last four or five years, what we saw were a lot of brands pulling back from wholesale, particularly hyper luxury, and going back to control their own distribution,” said Iacono. “We started seeing brands like Prada and Gucci pulling back on their breadth of distribution and have been far more selective. They’ve invested much more in controlling their own brand experience.” Loyalty follows trust Trust plays a crucial role in facilitating sales of designer goods both offline and online. “It’s just a condition of being able to do business to have a high level of customer experience, a very deliberately curated customer experience so that you are building that ongoing loyalty,” said Iacono. “Trust leads to loyalty and it’s really about the consistency of the customer experience and being very deliberate around that.” Trust in the realm of third-party online luxury retailers extends beyond authenticity, it extends to the brand’s reputation to curate a consistent online shopping experience. Ssense has earned a reputation for discovering and platforming emerging designers. With 80 per cent of the site’s audience between the ages of 18 and 34 it has had to ensure it stays true to its demographic with its luxury product offering. “But [Ssense] also partner on consignment and drop-shipping arrangements with some businesses and some boutiques – I think they’re able to offer a curated selection,” said Iacono. Curating a defined image and staying true to it has allowed both Ssense and Net-a-Porter to maintain a loyal customer base. “Farfetch feels a lot more reactive and quite short-term. And I think that’s maybe one of the reasons they’ve been underperforming as well,” Iacono suggested. Storytelling generates sales Storytelling helps facilitate a high-end shopping experience and e-commerce can implement this through a variety of means. Styled photoshoots, product descriptions, exclusive collections, designer biographies and product recommendations are all tools multi-brand e-commerce sites can utilise to tell a brand story. “Where Net-a-Porter continues to be really strong is just the fact that they still have that highly curated edit,” explained Iacono. “The other thing that they do, which is very editorial, is storytelling. They’re creating stories around certain trends or around certain product categories.” Net-a-Porter following its success has created spin-off sites for men, Mr Porter, and for discounted items, The Outnet.“I just think there’s a lot of latent equity that comes with being the OG in the space,” concluded Iacono.