On Sept. 19, eBay will launch eBay Fashion Outlet, the first virtual “outlet shopping mall” in the U.S.
The move is based on the momentum being seen on eBay’s original two outlet sites operating since 2010 in the U.K. and Germany, and the industry consensus that outlets are the fastest-growing retail channel, with online ranking second.
After eBay Fashion Outlet makes its debut, the e-tailer is expected to roll out additional outlet Web sites in other countries. But for starters on eBay Fashion Outlet, there’s an opening roster of about 20 companies, including Neiman Marcus Last Call, William Rast, Spanx, Fila, Timberland, Brooks Brothers, Bluefly and Custo Barcelona. Additional names are expected to be revealed in the weeks and months ahead, with the denim sector expected to be a particularly big category, according to eBay executives.
EBay Fashion Outlet will operate round the clock and year-round, sell women’s and men’s apparel, handbags and shoes generally at 20 to 60 percent off the retail price, and will primarily target 25- to 44-year-old women. It will also give trend direction and shopping guidance from eBay creative director Andrea Linett.
For consumers, eBay Fashion Outlet means they can shop outlets (each with their own “storefront”) without having to face the typically long drive to a physical outlet mall. They also get a consistent offering of the same labels, in contrast to flash sites or off-price sites that often have unpredictable, spotty assortments.
For brands and retailers participating, eBay Fashion Outlet means possibly reaching new audiences and incremental sales. EBay clothing, shoes and accessories get 4.8 million visitors each month, according to comScore Inc., which tracks the online world. And eBay says a women’s dress is sold every 18 seconds, a pair of women’s jeans every 18 seconds and a pair of shoes sold every three seconds online. Also, $9.8 billion worth of fashion was sold on eBay last year.
Despite these figures, the outlet mall is a big step forward in eBay’s almost 18-month-old strategy to further bolster its fashion business.
“We’ve been on a journey since April 2010 to focus in on fashion more than before,” said Miriam Lahage, general manager, eBay fashion, citing the creation of a dedicated fashion destination, fashion.ebay.com; limited edition collections from Narciso Rodriguez and Derek Lam, whose line was crowdsourced, and the addition of the “Fashion Vault” flash sale feature. EBay has also partnered with the Council of Fashion Designers of America on an ongoing anticounterfeiting campaign.
Neiman Marcus Last Call already has its own Web site, as do other brands that will be on eBay Fashion Outlet. For Brooks Bros., eBay marks an outlet launch online. “We are very interested in significantly upgrading our direct business and making a number of investments in people and platforms,” said Ken Seiff, the founder of Bluefly.com, who is advising Brooks Bros. on its multichannel strategy. “We are testing partnerships to find new ways to engage large numbers of prospective Brooks Bros. customers. EBay’s enormous reach and unique position in the market makes them an ideal partner. We may continue to build a larger presence of products on eBay after we see the initial results.”
For Neiman Marcus Last Call, “eBay offers us more innovation, more marketing and a different, bigger customer base,” said Ann Paolini, senior vice president and managing director of Neiman Marcus Last Call, which launched its own Web site in October 2010. Last Call’s pages on eBay “will be done in a style and manner that closely mirrors our site,” Paolini noted. “You will see the same collection.”
EBay’s U.K. and Germany outlet malls have offerings skewed to brands based in those countries or with an appeal that’s national. However, some of those brands could make their way onto eBay Fashion Outlet in the U.S. as well. The U.K. outlet sells Superdry, Ted Baker, Karen Millen, L.K. Bennett, House of Fraser, Schuh, Dune, Office and Kookai. EBay Germany sells Eastpak, Fila, Speedo and Triumph.
While eBay provides the platform, the brands and retailers will still operate their outlets on eBay, own their merchandise and fulfill the orders as they would otherwise without any extra infrastructure expense. They also will create the look of their pages on the site. “We provide the shell and they design into that shell,” said Lahage. That shell will have “a different look and feel from regular eBay,” with merchandising driven by the brands and retailers. “Every brand will chose their own merchandising strategy, as you would expect. The aim is to have the best selection across all the brands and to bring online that same outlet shopping experience that consumers can’t find close to their homes,” Lahage said.
There will be multiple entry points in addition to eBay Fashion Outlet, such as on the eBay homepage, the fashion.ebay.com homepage, as well as through retailers’ and brands’ own URLs. Also, a mobile app is being considered.
While some outlet centers offer a bare-bones experience, Lahage insisted that won’t be the case at eBay Fashion Outlets. “The customer should expect to get great customer service and to get their packages swiftly and on time.” She said delivery times and shipping costs will vary per brand.
Asked about the financial arrangement with the retailers and brands, Lahage said, “We only make money when they make money.” Officially, eBay said it will get a percentage of the sales.
It’s almost a no-brainer for eBay to go the outlet root, because as Marshal Cohen, chief industry analyst at The NPD Group, observed, “Outlets are the fastest-growing sector — 26 percent growth year-to-date, but as much as they are growing, they have limitations. They are far away from dense populations, though that’s starting to change with some outlet centers [emerging] closer to the epicenter of communities.”
The online sector has grown about 8 percent year-to-date, though compounded growth of online businesses in recent years beat all other channels, Cohen added. “All indications show the consumer spending and shopping time favors the online experience. Online has the ability to better communicate the product experience, to discuss products, to play videos.”
Cohen said eBay’s challenge is to build up its array of outlets on its site, but it’s very doable. “Even if a brand has an elaborate site already, you still want to get more exposure through other sites. It’s all about reaching different audiences in different ways.”
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