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Denim Brands Warm to E-Commerce

The once reluctant and skeptical denim industry is beginning to give its e-commerce operations a fuller embrace.

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PARIS — The once reluctant and skeptical denim industry is beginning to give its e-commerce operations a fuller embrace.

This story first appeared in the August 6, 2009 issue of WWD.  Subscribe Today.

Denim players such as Replay, Guess, My Lovely Jean and Le Temps des Cerises are expanding their online operations in a bid to capture a significant consumer segment that has fled the real-world retail environment for the virtual one.

While overall economic conditions remain challenging, a recent report from Forrester Research shows e-tailers are benefiting from a steady migration to online shopping. Online apparel sales in Western Europe are forecast to grow from 13.14 billion euros, or $18.92 billion at current exchange, this year to 19.88 billion euros, or $28.63 billion, in 2014. That hasn’t gone unnoticed by denim labels.

“Following the success of e-commerce in France and given the growing numbers of online customers, we decided to develop this axis,” said a spokesman for Le Temps des Cerises, whose Web store opened for business last month.

As they join the online party, denim brands admit they were among the biggest skeptics. When My Lovely Jean founders David, Gregory and Gary Pariente established their first brand, American Retro, seven years ago, they were doubtful online shopping for clothing would succeed.

“So many things are hard to shop online for the first time because, for sure, women need to try, to touch, the fabric,” said David Pariente, the company’s president. “After, when a woman has had a great experience, she’s bought something she liked, received it, the fit is perfect, then you realize, it’s like heaven. You don’t need to go on to a busy street, to get on the [subway], to get a parking penalty.”

Pariente, whose father founded French fashion chain Naf Naf, added that not opening an online store at this point “would have been last century. It’s become a way of consuming for everything — for travel, for food, for clothes.”

The online environment is also expected to weather the downturn better than other retail formats as consumers change their shopping habits.

“The global recession will hit online sales less hard than other channels as increasing numbers of consumers shop online to find better prices and save on overall costs,” said analyst Victoria Bracewell Lewis in the Forrester report, titled “Western European Online Retail and Travel Forecast, 2008 to 2014.” The report also found online shoppers are less adverse to economic conditions because they tend to be better educated with slightly higher incomes.

While hip brands such as Cheap Monday, Notify and Current Elliott still don’t have their own e-shops, the perception that it’s tough to sell denim online seems to be losing steam. Web sales accounted for 4.5 percent of jeans sold in France in 2008, according to the Institut Français de la Mode. Though that’s low, it’s higher than the 2.8 percent that were purchased in department stores. Most French consumers buy jeans in specialty stores and chains like Etam, Zara or H&M.

The biggest challenge to selling denim online remains fit, said Sucharita Mulpuru, principal analyst of eBusiness at Forrester and a former Saks Fifth Avenue executive.

“It’s hard to acquire new customers because of the complexities around fit,” she said. “Companies like Zafu have tools to help people find the right pair and brand of jeans online.” Zafu is a fit recommendation site for jeans.

Shoppers at Guess’ European online megastore, which drew 40,000 registered users in its first month after going live in France and Italy in May, can narrow their searches by criteria, including waist, wash, fit and leg length, said Michael Scatigna, Web business manager at Guess Europe. While he wouldn’t disclose targets for the European business, e-commerce sales in the U.S. and Canada jumped 38 percent last year.

Brands also are looking to online sales as the ideal platform for capitalizing on editorial coverage. Le Temps de Cerises said it wants to give those surfing its site the ability to buy products seen in the press, eliminating the time delay between the offer in store and the products presented in fashion stories in magazines.

“We offer the possibility to buy a product that appears in top fashion magazines in a few clicks of a button,” added Scatigna.

The unveiling of My Lovely Jeans’ e-shop coincided with an editorial in French Vogue. “Because of Vogue, we had an instant phenomenon about our sales online,” said Pariente.

Replay is embracing social media as well as e-commerce. When the Italian label opened its online store in May, it equipped the site with a “tell a friend” and a Facebook link. “Online shopping becomes a social activity, too,” the brand proclaimed.

Poor economic conditions make offering discounts a key to encouraging customers to click. While Le Temps des Cerises’ e-shop isn’t branded as an outlet store, it will mark down products that don’t sell well through its classic distribution network. My Lovely Jeans also sells certain styles at 20 percent off, and Swedish denim-heavy brand Acne opened an online outlet store this year.

The good news for denim brands is that jeans tend to fetch higher prices online as consumers track down brands to which they’re devoted, according to Institut Français de la Mode. Other apparel products, on the other hand, can be up to 15 percent cheaper online due to shoppers engaging in heavy price comparisons and discount hunting.

Brands will look to capitalize on the higher prices consumers are willing to pay for jeans with exclusive collections. Scatigna said Guess will introduce Web exclusives in the future, while My Lovely Jeans will offer some for fall.

“If people trust us to buy online and to buy jeans, which is not so easy because of the fitting, to thank them we will put some limited edition or exclusive styles online,” said Pariente.

My Lovely Jeans’ online customers have already shown a bigger appetite for trendy versus basic styles. A battered Demolition style, which comes in six cuts and three washes, represents 50 percent of brick-and-mortar business, but around 70 percent of online sales.

“The online consumer needs to get something different from the basic,” said Pariente.

Future design may increasingly be influenced by the jeans’ final destination — the virtual point of sale.

“Because of the success of sites like Net-a-porter and Style.com, you have to be screen-savvy when you design. That’s how a lot of women are judging what they buy,” said designer Earl Pickens, whose e-shop, selling between 20 and 30 pieces from his couture denim collection, will open next month. “I’m making clothes now that aren’t even meant to hit the shops. They’re meant to hit the screen.”

Pariente predicted that within 10 years online sales could represent 50 percent of the company’s business and reap even higher profits.

“We don’t have all the fees that a retailer has, like sales, personnel, rent and so on,” he said. “We have some overheads, the Web master, the design, but it’s much less compared to a store. For sure, it can be a very profitable business.”

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