Accessories Boom Online

Retailers expand e-commerce offering.

A screenshot from Departementfeminine.com

Accessories remain one of the few bright spots at retail these days — and online, they’re doing even better.

This story first appeared in the August 11, 2008 issue of WWD.  Subscribe Today.

“We’ve had more and more incredible sellout on shoes, for both niche and established brands,” said Federico Marchetti, founder of Yoox, the online fashion retailer specializing in end-of-season collections. In light of robust jewelry sales, Yoox is considering a full jewelry launch for the end of the year, he said.

“Couture costume jewelry, especially, has really taken on a form of its own, and the growth in our clutch business has been unbelievable over the past three years,” added Eva Jeanbart-Lorenzotti, founder and chief executive officer of the niche accessories-focused catalogue and Web site Vivre. “Shoes Accessories remain one of the few bright spots at retail these days — and online, they’re doing even better.

“We’ve had more and more incredible sellout on shoes, for both niche and established brands,” said Federico Marchetti, founder of Yoox, the online fashion retailer specializing in end-of-season collections. In light of robust jewelry sales, Yoox is considering a full jewelry launch for the end of the year, he said.

“Couture costume jewelry, especially, has really taken on a form of its own, and the growth in our clutch business has been unbelievable over the past three years,” added Eva Jeanbart-Lorenzotti, founder and chief executive officer of the niche accessories-focused catalogue and Web site Vivre. “Shoes are doing great, but people tend to want either the completely unexpected shoe or brands that they know will fit them well.”

Blame it on higher gas prices making consumers reluctant to drive, or simply a need to indulge from the comforts of home, but more and more people are turning to the Web to accessorize, with 24 percent of accessories sales in the U.S. generated online last year, up by 7 percent from 2006, according to Pamela Danziger, president of Unity Marketing. And that number is expected to grow this year.

“The figures [have] come from virtually nowhere 10 years ago. It’s really proving to be a reliable [shopping] source,” said Danziger.

According to the National Retail Federation, online sales of apparel, shoes and accessories in 2007 totaled $22.7 billion, and e-tailers have said they’ve seen stronger sales over the last few months even as department and specialty stores have struggled.

Clothing, shoes and accessories represent the fastest-growing segment of the global online shopping industry, second only to books, according to a report by the London-based research firm Mintel. Based on Mintel’s survey of more than 26,000 Internet users across the globe, the most popular apparel sites, in descending order, include eBay, L.L. Bean, Victoria’s Secret and the footwear and accessories giant Zappos.com.

Globally, it’s the retailing Goliaths that rule the online roost for apparel and accessories sales. These include La Redoute in France and Next in the U.K., as well as large American retailers including J.C. Penney; Sears; Redcats’ U.S. portfolio; The Limited, which owns Victoria’s Secret, and L.L. Bean.

Even fast-fashion and major designer players are leaping into the fray. Topshop in the U.K. has added e-commerce, H&M so far has sprouted e-commerce sites in Northern Europe and, since March, Mango has stormed the e-commerce scene with sites in 36 countries, offering clothing and accessories. These include Spain, France, Germany, Belgium, Austria, Bulgaria, Denmark and the U.S. Openings in Asia will follow.

“Other [categories], such as books, cosmetics and perfumes, are years ahead of accessories [on the Internet],” commented Jean Cassegrain, general director of Longchamp, one of a number of traditional European leather goods brands actively asserting their presence online.

Since the launch of its U.S. e-commerce boutique in 2006, Longchamp’s online business has risen by 40 to 50 percent each year. “The outlook for 2008 is also looking strong,” said Cassegrain, despite the global economic downturn.

Retailers cited healthy yearly increases for online accessories sales, while cautioning that a more prudent approach to online spending may begin to mirror the slowdown in stores.

“Since December, we have noted a drop in the average transaction,” said Vivre’s Jeanbart-Lorenzotti. “We’re making up for it in volume…but it’s certainly not the best time in the world to be [proposing] pieces that are completely out there,” she said, adding that business for her site has risen by 40 percent yearly since Vivre’s launch in 2004.

Successfully communicating the tactile and physical properties of an accessory on a two-dimensional page is one of the biggest challenges facing the online accessories business.

“The main difficulty is with ring sizes and communicating product proportions,” commented a spokesman for Mawi, the high-end British costume jewelry brand.

Essential tactics for bringing to life accessories online include providing copy contextualizing product, as well as a great search engine that allows visitors to shop by designer, color and size, and giving them access to “critical decision-making product information” such as dimension, weight and material, said Larry Promisel, vice president of e-commerce for Barneys New York. “We also have a zoom and pan technology to view the stitching and texture of products.”

According to Danziger, the number-one complaint from women shopping for accessories online is not being able to view the interiors of purses. “Many sites also don’t provide bag weight and that’s critical. Those are factors that are holding back sales,” she said. “Women are adapting their shopping behavior and the marketers are not adapting as quickly.”

“The Internet will [evolve] progressively, but it will be more about a silent revolution rather than an overnight explosion,” commented Evelyne Chaballier, director of economic studies for the Parisian fashion institute IFM.

So far, business generated online by a mass brand such as Mango, for example, is comparable with that of one of the brand’s medium-size boutiques, she said. But the virtual rise of such players online is already changing the landscape.

“The problem facing mail-order catalogues is that they have [built their success] on a strategy of promotion, and [today] the Internet harbors fierce competition,” said Chaballier. “[The mail-order giants] are in decline.”

Lagging way behind the States, Europe’s department stores are only just going virtual. Leading the way in France, Galeries Lafayette and Le Bon Marché introduced e-shopping sites over the past few months. In Britain, House of Fraser, John Lewis and Harvey Nichols count among recent online arrivals, with Selfridges planning its launch for summer 2009.

Testing the virtual water with accessories has proven a popular strategy for a number of brands and retailers embarking online. Harvey Nichols’ e-commerce site, launched in September, offers accessories, niche beauty brands and food hampers, for example.

“The nonsized nature of accessories means that they are easy for consumers to buy online as gifts as well as for personal use, and do not suffer the high return rates of clothing,” said Julia Bowe, marketing director of the store. Accessories both on- and off-line have experienced double-digit growth, she said, with handbags, jewelry and sunglasses proving bestsellers.

“Accessories is a larger category of business, percentage-wise, online. One reason for this is that we’re taking a phased approach to adding categories and designers,” echoed Barneys’ Promisel, adding that they have a lot of runway to grow online. “The trajectory of growth [online] has been much steeper than the increase in store sales.”

Balenciaga, for now, also has restricted its first e-commerce site — launched in the U.S. in May — to accessories, including bags, shoes, sunglasses, scarves and jewelry. “Logistically, it would be a huge undertaking to sell fashion online, [as well as all of the complications regarding] fit and size,” said a Balenciaga spokesman.

Online retailers are divided on the best formula for courting business. “In terms of share of pocket, every site on the Web is competition,” commented Vivre’s Jeanbart-Lorenzotti, who believes differentiating one’s product offer from the big players is the best tactic for establishing a loyal customer base.

“We view our approach as an edited, or curated, point of view,” she said. “Anyone who approaches the Internet merely as a form of distribution and not an inherent psyche is making a mistake.”

“Whereas a brand’s own site only offers its [own collection], for us, it’s a question of ‘all you can eat,’” argued a spokesman for the medium-range French shoe e-commerce site, Sarenza.com, which modeled its approach on U.S. shoe giant Zappos.com. Launched in 2005, the firm was acquired by a group of French investment funds in 2007 for an undisclosed sum. Five million euros, or about $8 million, was generated in the year running July 2006 to July 2007, with sales expected to double this year. Bestsellers on the site, which delivers to France and Belgium, are midrange brands such as Geox and Kickers, with 36-year-old females its biggest customer.

Shoe sales at La Redoute, France’s number-one online retailer in terms of visitors, totaled around 10 times that of any its compatriot online competitors last year, with 1.5 million pairs sold. Ballerinas and boots topped the site’s bestsellers. Fifty percent of business for La Redoute, which is owned by Redcats, PPR’s mass market retailing venture, is now generated by its e-commerce site, according to a spokesman, with accessories representing increasingly big business.

Last year, La Redoute introduced a section dedicated to accessories, including bags, belts and legwear and shoes, which count for 700 out of 1,000 of the firm’s accessories references. According to a spokesman, the move to e-commerce has allowed La Redoute to adapt to fast-fashion cycles. Ten new shoe styles are now introduced online each month, for example.

In parallel, a number of traditional leather goods brands are aggressively multiplying their signature e-commerce sites.

Longchamp, for example, first entered the picture in 2001 with the launch of an interactive customization site dedicated to the house’s iconic Pliage bag. “It’s a concept that would have been very complicated to implement in stores but that works so fluidly online,” said Cassegrain of the site, which permits customers to select their bags’ colors and materials. But most importantly, the site has enabled the brand to develop an online presence while mulling a long-term e-commerce strategy. Having launched its first e-boutique in the U.S. in 2006, Longchamp plans to develop e-boutiques and selective online distribution points in Europe next year, followed by Asia.

“As long as distribution is controlled and it doesn’t become the jungle, [the limits of the Internet] are endless. One can do beautiful things that valorize product,” he said. “There is a savoir faire to selling online and for combating fraud. We now feel equipped.”

For Hermès, which currently counts silk accessories as its best-selling e-commerce category, with the U.S. its number-one market, online business is advancing by 50 percent each year, according to Charles-Henri Leroy, director of the brand’s client relations. “It’s evolving first because we’re offering more product lines and openings in an increasing number of countries,” he said, adding that he can even envisage the day when the brand’s elusive Birkin and Kelly bags will be available to order at the click of a mouse. “The problem is that we already have delivery problems in our stores. We only have 2,000 craftsmen with two hands each and we don’t want to disappoint our online customers — especially for those two lines of handbags.”

Hermès chose to launch its first e-commerce site in the U.S. in 2002 — long preceding its corporate site, which only launched this spring — offering mainly silk accessories and fragrances. “Our business growth in the U.S. over the past five years [has proved the Internet] a good distribution channel,” Leroy said. Last year, the brand extended its e-commerce site to the U.K. and Germany, with further openings in Western Europe and Asia planned for this year.

A fuller range of silk accessories has since been added online, along with watches, canvas bags, silver jewelry, leather belts and bracelets. “We’re taking it step by step. Shoes will likely be added in the near future, and handbags will certainly come one day,” said Leroy.

“Our online sales remain a small percentage of our overall business, but are critical in terms of delivery of service to our customers,” commented Philippe Schaus, senior vice president and international director of Louis Vuitton, whose core online business is generated by leather goods and accessories.

The brand’s top-selling categories online are handbags, wallets, clutches and luggage, in order of importance. Louis Vuitton made its commercial debut in 2000 with a Web site on its sister company’s site eLuxury.com, followed by the launch of its signature e-commerce site at the end of 2005, available to French shoppers.

But the past year has proved particularly active for the brand’s online arm, having extended its e-shopping site to the U.S., Japan and Germany, with an opening in Italy planned for May. The site exists in eight languages, including traditional and simplified Chinese, with Italian soon to be added. In September 2007, Louis Vuitton also launched a personalization service offering to monogram initials in different colors for certain leather goods purchased online.

Some experts believe that the advance of brands’ own sites online will pose the biggest threat in time.

“My own vision is that monobrand sites, where customers can talk directly with the brand, will be more successful than multibrand outlets,” said Yoox’s Marchetti. “Whereas in the off-line arena, it can be seen as time-saving to visit multibrand stores — online, the time it takes to switch sites is one second.”

Yoox is among a number of players taking the matter into their own hands.

Since September 2006, the site manages the e-commerce sites of Marni, Emporio Armani, Diesel, C.P. Company and Stone Island. In March, Yoox bowed its men’s wear-focused site, TheCorner.com, open to the States and the European Union, which hosts tailor-made corners for a multitude of high-end fashion and accessories brands, including Viktor & Rolf, Veronique Branquinho and Marc Jacobs. Stocking both apparel and accessories, the site will open in Japan this fall, with women’s collections to be added within the year.

Neiman Marcus Direct, meanwhile, which owns the neimanmarcus.com, berdorfgoodman.com, cusp.com and horchow.com e-commerce sites, oversees the sales and logistics for the online U.S. boutiques of 11 luxury fashion brands, including Ferragamo, David Yurman, Baccarat, Juicy Couture and Michael Kors.

“It’s good business. The sales come through neimanmarcus.com, therefore adding business and revenue, which equals more sales for [us],” said a Neiman Marcus spokeswoman.

Rushcollection.com, a French fashion site specializing in past and present collections for niche European clothing and accessories brands, also hosts shop-in-shops for brands, including the hip labels Les Bijoux de Sophie, Maloles and Tila March. “Accessories are extremely important for the site,” said a spokesman, who explained that visuals of bags and shoes are often used to lure visitors to the site, distributed by e-mail.

Sophie Levy, founder of Les Bijoux de Sophie, compared her boutique on the site with having a corner in a brick-and-mortar store. “I have total control of brand image with professionals managing the logistics of the site,” she said.

“As with a brick-and-mortar store, there are many stages to getting product online,” commented Lucy Butler, a former jewelry buyer for Harvey Nichols, who launched her jewelry site, Ljblondon.com, last fall. With many brands wary of overexposure online, having solid contacts in the business is golden for entrepreneurs seeking to bring brands online, she said.

“Brands are concerned about a site’s image being good enough,” commented luxury French retailer Carole Benazet, who tapped the Web site guru Spill (who also designed sites for the likes of Colette, Marie-Helene de Taillac, Repossi and Marc Newson) to design her fledgling luxury accessories-focused site, Departementfeminin.com. The site offers shoes, scarves, bags and jewelry by brands such as Balenciaga, Lanvin, Alaïa, Chloé and Giuseppe Zanotti.

“Brands are being canvassed by a lot of start-up online retailers, but it’s too risky for them as sites can disappear overnight. The Internet is a very volatile market,” commented David Allen, manager of Shadestation, a Manchester-based retailer specializing in branded eyewear and watches.

With core product lines having reached a plateau, costume jewelry will be a new focus over the coming months, with DKNY and Diesel among new lines to be introduced for fall. Increasingly fragile in view of the market’s circling copycats, certain independent accessories designers, meanwhile, are using the Web to their own advantages.

Getting to market as rapidly as possible is vital for survival, according to Claire Chung, a former Christie’s executive-turned-jewelry designer who is planning to launch her niche accessories-focused e-commerce site at the end of the year. Chung views the site as a coalition for smaller brands forced to compete, more and more, for a space in the market. “We’re going to go global [with a strong marketing offensive],” she said.

“[Online accessories] is an ever-growing market and it will get more competitive,” noted Vivre’s Jeanbart-Lorenzotti. “It will create confusion for customers as there is so much choice. But [women] are enjoying this method of shopping; it’s become a way of life.”