Net-A-Porter was born as a shoppable, online fashion magazine, and the e-retailer is now enriching its editorial content, even as competitors follow its lead in making it easy to buy from online stories and photos featuring luxury goods.
Net-A-Porter, part of Yoox Net-A-Porter Group, No. 76 in the Internet Retailer Top 1000, announced last week the formation of a new group called Porter Digital that will post editorial content daily instead of weekly on Net-A-Porter.com, double its video output to two original films a week and feature 1,000 products in its photos and articles every week, rather than 500. The e-retailer’s weekly magazine The Edit is being rebranded PorterEdit, and all content will continue to be translated into four languages: English, German, French and Mandarin Chinese.
In addition, all the stories and photos presented on Net-A-Porter.com will now be available in the Net-A-Porter mobile app. Previously, consumers had to download a separate app to see editorial content produced by Porter, the publishing arm of Net-A-Porter that’s directed by Lucy Yeoman’s, the former editor of the United Kingdom version of the fashion magazine Harper’s Bazaar.
That group also produces a glossy print magazine called Porter aimed at affluent women, especially those who travel frequently for work. Readers can scan images in the magazine with their smartphones to pull up web pages where they can purchase featured products. That magazine distributed 180,646 copies in the 12-month period ended February 2017, according to the latest circulation figures released by Yoox Net-A-Porter.
The retailer has good reason to think more content will lead to more online sales. The average order value of readers of its weekly online magazine is 26% higher than for other customers. Plus, magazine subscribers buy 5.3 times per year versus 4.1 times for others, with net spend that’s 5% higher, a Yoox Net-A-Porter spokeswoman says.
There’s also the evidence that comes from its main competitor emulating its editorial strategy. Farfetch UK Ltd., an online luxury marketplace operator based in the United Kingdom, announced in June an alliance with fashion publisher Condé Nast, whose publications include Vogue, GQ and Glamour. As part of the deal, Condé Nast includes links from online articles to shopping pages on Farfetch.com, and the two companies collaborate on creating shoppable online catalogs.
These two big online luxury sellers recognize the crucial role of editorial content in the purchase cycle of discovery, influence and purchase, says Katerina Sudit, executive director of Mindshare North America, a media and marketing services agency that recently published a study of luxury marketing.
“What they’ve both recognized, both Farfetch and much earlier Net-A-Porter, is the role of content in driving the influence piece and mitigating the risk for the customer,” Sudit says. Buying pricey goods online carries with it risk, she says, in that a consumer considering a purchase may wonder whether the color of the item she sees on the screen accurately matches what she will see when she receives it, and how it will go with other items in her wardrobe, among other concerns.
“What content allows us to do is bridge that risk for customers, because it allows us to bring in the element of influence,” she says. “Yes, this will be cool. Yes, this is how to wear that white shirt, and here are accessories that work with it. By putting content as close as possible to the point of purchase these platforms are building their business on a successful model.”
‘Like fighting Amazon in fashion’
Editorial content on a luxury retail site helps to make up for the absence of the soothing touches of a bricks-and-mortar luxury shop, such as plush furniture, champagne and well-dressed salespeople, says Olga Pancenko, chief operating officer of handbag brand Perrin Paris. “All that is missing online, so you need to have something that comforts you in the process,” she says.
“Why Net-A-Porter has been so successful is that they’ve always had that strategy: ‘We’re going to be a magazine, an editorial entity. We’re going to show what cool people are wearing, the trends, what happened at Fashion Week, the industry news. And via this content we’re going to allow you to shop.’”
She says Farfetch is different in two ways. Unlike Net-A-Porter, Farfetch does not own any of the merchandise it sells, but rather provides an online platform where brands and fashion boutiques can sell. That means Farfetch takes on less risk than Net-A-Porter, which owns the merchandise it sells. And Farfetch, Pancenko says, is more of a technology company—and a very formidable one—than a fashion retailer. “Those people are the best in technology,” she says. “It’s like fighting against Amazon in fashion.”
Editorial content, she says, is especially important for e-commerce companies like Yoox Net-A-Porter and Farfetch that feature items from many brands because articles and photos can help the shopper understand how various items may go together, such as which skirt goes with this sweater and which accessories to add.
“For anybody who is multibrand it’s important to have your own editorial,” Pancenko says. “That’s how you put your product in context and frame it for the shopper. You also gain data about the consumer, what they’re interested in.”
The cost of content
Perrin Paris sells on Farfetch.com, as do several boutiques around the world that carry its bags and clutches, which typically cost $1,000 to $2,000. Pancenko says smaller brands like Perrin Paris in the past would have had to spend tens of thousands of dollars on public relations agencies and magazine advertising in the often vain hope of getting editorial mention. Now Perrin, as well as its resellers, can work with Farfetch—for a fee—to get editorial exposure for Perrin Paris in the form of advertorials, articles that look similar to a publication’s stories but that are sponsored.
When those mentions translate into sales, the brand itself or a reseller who ends up selling the product, shares part of the proceeds with Farfetch. Commissions average around 30%, Pancenko says “Its a merger of traditional advertising, editorial and pay-per click models,” she says.
“We want to help our brand partners build visibility and tell their story as well as drive product sales,” says John Veichmanis, chief marketing officer at Farfetch. “On occasion, we create paid advertorials that tell a specific brand story for a target audience.”
Another multibrand online luxury retailer that’s invested in editorial content is 1stdibs.com, which sells high-end antique and contemporary furniture and home décor, including products that are often one of a kind. The e-retailer launched an online magazine called Introspective in 2006, and now produces four to eight stories per week, many of them in-depth, thousand-word articles on designers and trends illustrated with fashion magazine-quality photography.
“It’s a nice way to reach our audience to say in the world of art, antiques and design we’re arbiters of great taste,” says Anthony Barzilay Freund, editor in chief of Introspective magazine.
While he declined to get specific about the retailer’s editorial budget, he says the company has “made a substantial investment in creating content.” That includes an in-house team of six writers, editors, designers and photo editors that are complemented by freelance writers and photographers. “We’re a luxury website and we feel that’s an investment worth making,” Freund says.
Website visitors that read the magazine typically spend five to 10 minutes per story, Freund says. The e-retailer prints Introspective magazine twice a year to use as handouts at events.
And, while Freund says it doesn’t carefully track how many clicks from articles lead to sales, 1stdibs does track which stories draw the most interest. After seeing a growing number of website visitors reading articles about contemporary trends the company last year printed its first catalog focused on those types of items. “We published two versions: one to 40,000 interior designers that are part of the company’s trade program and one for our ultra high net worth customer base and consumers,” a spokeswoman says. “The second publication is for interior designers only and will be released next month.”
As Sudit and Pancenko note, editorial content has been the hallmark of Net-A-Porter, which was founded in 2000 by fashion journalist Natalie Massenet. Massenet left the company in 2015, months before the completion of the merger between Net-A-Porter, which features in-season apparel and accessories at full price, and Yoox Group, which operates e-commerce sites for luxury brands and also sells overstock and out-of-season fashion apparel at a discount on Yoox.com. Massenet last year joined Farfetch as co-chairman, sharpening the rivalry between the two online luxury powerhouses.
Two companies on the move
Yoox Net-A-Porter took over the top spot from Neiman Marcus (No. 41 in the Top 1000) last year in Internet Retailer’s annual ranking of global leaders in online sales of luxury goods, based on 2016 web sales. And the publicly held company may soon be part of a big player in global luxury. Compagnie Financière Richemont SA, the Swiss holding company that owns such brands as Cartier, Piaget and Alfred Dunhill, announced a $3.3 billion bid in January to buy the 75% of Yoox Net-A-Porter equity it does not yet own.
For its part, Farfetch, No. 16 in Internet Retailer’s global luxury ranking, fattened its bank account considerably last year when big Chinese online retailer JD.com Inc. invested $397 million to become “one of the largest shareholders in Farfetch,” according to the two companies. A year earlier, Farfetch had raised $110 million in funding. Farfetch now is reported to be contemplating an initial offering of stock.
Shoppers can find many of the same brands on Net-A-Porter.com as on Farfetch.com, including Burberry, Saint Laurent, Jimmy Choo, Stella McCartney and Dolce & Gabbana. Its deal with Condé Nast allows Farfetch to sell those prestige brands in collaboration with leading fashion magazines. But Net-A-Porter’s commitment to creating daily online commentary and fashion photography shows it’s not ready to cede its position as a leading luxury site rich in editorial content.
Top: Cedric Buchet/ PorterEdit/ NET-A-PORTER.COM
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