Fashion has joined the IoE - the Internet of Everything.
The opening salvo that Fashion, in particular, luxury, is in the Valley's crosshairs was reflected earlier this month when Yahoo CEO Marisa Meyers co-chaired Anna Wintour's Met Gala sealing Yahoo's sponsorship of the Costume Institute's China Through a Looking Glass exhibit.
Luxury fashion's IoE entrance appears to have jet-propelled the runway strut into a competitive quest for a winning social media omnichannel strategy. A quick glance at the NetBase Crosstab below illustrates luxury fashion's race on leading fashion ecommerce platforms over the past year. The brands themselves, with the exception of Burberry, have thus far shunned direct ecommerce sites.
However, things are about to change. Channel, Fendi and Tom Ford all have announced the imminent launch of their own direct sales sites, and you'll even be able to buy a $2,000 Tom Ford bag online. And Channel plans an in-store Net-à-Porter shop.
The chart analyzes seven luxury brands across eight luxury fashion platforms, including soon to launch ecommerce site Style.com, owned by Vogue. Vogue is folding Style.com, formerly a fashion news and runway curation platform, into its mothership, with the stated intention of blending ecommerce with its editorial, as part of its new omnichannel strategy.
The inclusion in the competitive analysis of Yahoo Style, a fashion news curatorial site, projects tech's interest in enveloping the highly lucrative space of luxury fashion ecommerce into IoT strategy, underscored by Mayer and Yahoo at the Met Museum's Costume Institute. Just as the fashion industry worldwide is targeting tech hires to optimize social influence, reach and sales, the inverse holds true, as well, as tech innovates attractive mobile and social solutions for fashion brands.
"Socializing" luxury fashion is mega business, to be sure. Initially slow to enter the fray, luxury fashion brands are finally accelerating the catwalk pace from saunter to speedway. A recent McKinsey report on luxury fashion ecommerce reveals that digital luxury purchases are expected to grow from the current 3 percent of total market to 18 percent by 2018, representing a total market size of $12 billion. McKinsey forecasts astounding ecommerce growth by 2018, with China's 70% growth by far outweighing far from paltry projections for the U.S. (17%), U.K. (18%) and Germany (12%).
Vogue's Style.com is a latecomer to what luxury fashion ecommerce sites like early entrant Net-à-Porter have known for 15 years. Not surprisingly, Vogue is accelerating its omnichannel strategy to include social editorial content shopping in the wake of Net-à-Porter's launch of Net Set-the first shoppable luxury social network. Style.com will initially feature 100-200 brands-fashion, technology and travel-for clickable purchase from magazine branded websites and digitized Vogue magazine app.
For its part, Net-à-Porter, fueled by fresh resources from its merger with Italian ecommerce site Yoox, recently launched Net Set, an app initially offered on an invite-only basis and available on Apple Watch, iPad and iPhone. The combined Net-à-Porter/Yoox value is an estimated $2.5 billion. Anticipating the burgeoning mobile-only Millennial luxury fashion consumer market, significantly, Net Set will capture data from its predominantly Millennial customer base. Despite resistance to invest in mobile buying technology in the U.K., Net-à-Porter's HQ, according to a new Barclay's study on mobile shopping, fashion buying remains the strongest sector.
As confirmed by the Net-à-Porter social media source analysis on the NetBase platform, the chart below indicates that Tumblr, principally used by Millennials, accounts for substantial reach. (Note: While NetBase captured the full Tumblr feed for this year, 2014 data includes only a partial third-party feed. A full one-year Tumblr feed would notably elevate the 20% overall social media source mentions.)
Net-à-Porter Founder and CEO Nathalie Massenet has witnessed an astounding 40% growth in mobile, but as fashion knows well, the ecommerce shopping can be perfunctory and can't replace the customer experience offered by a brick and mortar shopping event, not only the touchy-feely enticement and thrill of discovery, but also the inventive narrative offered on the sales floor.
To enhance its shopping experience, Net Set is designed as an interactive portal, where customers will be able to interact with prestigious Style Council designers, as well as the Net Set community. The rise of Instagram-like shoppable fashion sites hasn't been lost on Net-à-Porter, which will leverage the technology to allow members to also upload their own images and generate inspiration boards of their own, matched to shoppable designs.
Among other Net Set features is a virtual tour into the closets of stylish women, including Massenet's. While clicks are no replacement for bricks in the shopping journey, Massenet appears to be on track to deliver personalized experiences, including interaction with designers like Stella McCartney, who will control her own page.
Experimentation with fashion omnichannel strategy isn't without big stakes. But that hasn't impeded fashion ecommerce maverick FarFetch from going from "clicks to bricks," literally, with its recent acquisition of Browns, as it continues to attract significant investment in its omnichannel strategy.
Not to be dismissed, second-hand luxury fashion sites like RealReal and Poshmark have also paved the way with highly profitable ecommerce models, proving the high demand for recycled luxury fashion. Like Rent-the-Runway, which unlike the others is also experimenting with a brick and mortar play-even though it rents luxury fashion rather then selling it-these sites confirm that excess luxury fashion has a respectable secondary market.
As the NetBase Brand Passion Index below indicates, used luxury fashion reseller Poshmark has huge social reach and influence, indicated by the bubble size relative to the other brands, trailed by Net-à-Porter and Style.com.
What's next? Given the luxury fashion ecommerce boom predictions, there's going to be an abundance of luxury fashion floating around. And, if the economy ever picks up, or doesn't, at least the luxury resale market is destined for growth. I suspect we may see more Hermès $10,000 Birken bags walking the streets of New York City.