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When Munich’s savvy, designer-oriented boutique Theresa jumped into the brave new world of luxury online retail with mytheresa.com in 2006, the skepticism — especially in German circles — was rampant.  Would they pull it off? Could they pull it off? A decade later, the question now is what move will mytheresa.com be making next?

Acquired by the Neiman Marcus Group in 2014 and under the leadership of mytheresa.com president Michael Kliger as of 2015, the business has been growing by leaps and bounds. Turnover for 2015/2016 (end June 2016) hit 169 million euros, a gain of 40.6 percent. As Kliger noted, “We have no debt and are very profitable — though you have to prove it every day again. The real gauge for success is customer happiness.”

To find out just how mytheresa.com aims to keep its demanding luxury customers in 120 countries not only content but motivated, entertained and even surprised, WWD met with the executive at mytheresa.com headquarters in Aschheim outside of Munich. Here, Kliger offers takes on mytheresa’s new logistics center, the latest exclusive capsule collections, fashion films, music videos, gadgets, games, market forces, today’s sped-up pace and the culture of more, more, more.

WWD: Have you been feeling any effects related to the current problems at Neiman Marcus?

Michael Kliger: I can’t comment on the situation in the U.S., but from the beginning, Neiman Marcus Group has operated us as an independent self-standing unit.  There are expectations in terms of growth, and maintaining the unique positioning of being a curated shop focused on the high end of the runway, so they have clearly defined what we should not do. But our buying team is totally independent, our approach to brand collaborations is independent, our brand portfolio is quite different, as is our choice. I think it’s the right approach to go after different customers with different propositions.  Otherwise, they could have just launched neimanmarcus.com all over the world. The mytheresa.com business is another business, and I’m quite happy that Neiman’s has always respected that.

WWD: You’ve just moved into a new logistics center that’s more than double the size. What other improvements or advantages does this center bring mytheresa.com?

M.K.: Fashion is a lot about emotions and creating desirability, but in the end, you want your package on time and in perfect condition. This is our way of reaching the customer, and it’s an amazing physical touch point one has. If someone is on our site in the Americas or Asia, it’s still surreal. It’s still theoretical. They just saw it on the screen. So if they order, you don’t want to let anyone down. You want to fulfill or even exceed expectations.

What we’ve done well so far is that we’re always reaching new levels on many fronts. This year we have seen many more capsule launches with leading brands such as Prada, Miu Miu or Off White, Missoni and Dolce (Gabbana). A lot of firsts. We launched a nice game on wechat. The Off White launch was actually a social launch. But all of that must be matched with other firsts. Like the warehouse, which for the first time is now semi-automated. We cannot just innovate or progress in one area or we get out of sync.

WWD: Investment levels sound high.

M.K.:  We need to invest — it’s not so much about Capex — the warehouse is an exception. The rest is really about smartness. You don’t need a lot of money to create amazing capsules, but you need brains, the right taste and the right creativity. So that’s where we invest to make sure we have the best teams in Munich working for us and not somebody else.

WWD: Mytheresa.com’s maximum shipping time is now 72 hours, or four days to Australia. Are your customers demanding a faster pace?

M.K.: In all of Europe it just takes us 24 hours, but you are right. In a dream perfect world, of course they would like, “Oh — this is on the runway, can I have it this afternoon?” There needs to be a balance between “You get it right now” and then “OK, it will come.” There is a moment of suspension, a desirability that builds up over time. In our industry, people are willing to queue, to have their names on lists and wait for years, but patience is going down everywhere. It’s a cultural development. So yes, we try to be faster but as long as we ship just from Munich, there’s a limit to certain geographical locations.  Unless the truck or plane gets faster, it is what it is. What we can improve is hitting the right time. So if you order tonight and are working in London, maybe it would be cool if it came tomorrow at 4 a.m., but more likely you’d like to have it at 11 a.m in the office. But really at 11 and not at 1. It’s not only speed, but speed and reliability.

WWD: What else are your customers demanding?

M.K.: Our customer is a very engaged, very busy woman, so if she says, “I’ve got something coming up on the weekend and tonight I will have 20 minutes to go through mytheresa.com,” that’s the time she’s allocated to us. We need to make sure that in these 20 minutes we make it possible for her to find the right thing. So predictability means your search works, the products are available, “You have my size.”

In general, I think people are getting bored more easily today. There’s so much news, there’s so much excitement, but then she says, “I also want to be surprised. I want to see something that I didn’t expect.” And that’s driving us to find out how we can present something new or in a new way. Speed, don’t bore me and don’t let me down – it may sound traditional, but our research shows nine out of 10 of our customers are working women or have their own company. More than five out of 10 have kids, so her life is very hectic and that is where we can help but really need to perform also.

WWD: Doesn’t the constant demand for newness and excitement sometimes almost blank itself out?

M.K. It’s like an arms race. Someone has this, then you need that. Culturally you can moan about it, but it’s a fact of life. Every show needs to be bigger, every collection has to be nicer, and she has the right to that. No one comes to our site because, “Oh, my last pair of shoes broke.” That’s not our customer. And if we can’t excite her – be it the product – and mostly it’s the product – but also our way of presenting it, we can’t make her buy. We can’t create desirability.

We’re not in the business of selling more clothes but selling joy, pride, excitement, beauty. Fashion is only a mirror. The world itself feels very jittery and there’s so much uncertainty, and no one can take that away. Sometimes then people say, “Give me quietness,” but I think at the moment the mood is more, “OK, it is what it is, but then at least I want to enjoy it.” It’s the Gucci moment: Show me more, show me color, show me abundance.

WWD: Mytheresa.com doesn’t stock hundreds of pieces of one item, so in a way your customer has already been trained to react quickly.

M.K: For our type of business — a luxury boutique — people are not happy if items are sold out, but it’s not a boutique if you have 1,000 (pieces) of the same thing. So yes, there’s an element of hurry, and also the real promise that this is edited, curated. (Our customer) wants something beautiful but doesn’t want to see everybody wearing the same thing.

We’ll definitely stay true to our boutique positioning, but we still see great growth potential because we go global. We don’t want to reach more women in the same geography and same region and sell more by expanding in terms of brand portfolio or price points. It’s the same professional woman that loves fashion in all kinds of places. When we organized the Victoria Beckham event in Seoul, I was introduced to one of our top customers: a business woman from Myanmar. There are so many of these amazing women and that’s why we have huge potential for growth, at least in the foreseeable future, that doesn’t force us to become a mass merchandiser, or to deviate from our boutique position. I do not want to become a catalogue of all things to everybody.

WWD: What disappointments are absolutely taboo for today’s luxury shopper?

M.K.: Once she’s ordered on our web site, it’s anything that prevents it from being the right product on time at her doorstep. It’s the basic annoying things that all of us would be annoyed at a restaurant or hotel.

In the more medium term, disappointment is still the element of surprise and newness. If, for example, someone comes to the web site for the last three times and there’s nothing new.  It’s trickier because you don’t get a complaint in our service center saying, “Lately I’ve been bored,” but that’s a risk. So we’re investing a lot of time, resources and brain capacity to make sure this doesn’t happen.

The lineup of freshness and newness that we have is pretty stressful for many people in my company. For me it’s exciting. Like after the Missoni yoga launch, we were preparing for the Korean launch, for the Miu Miu fashion film, the Off White capsule, the exclusive capsule from JW Anderson, another Dolce & Gabbana capsule, plus more to come I can’t talk about. They just show up, but there’s months of work and preparation to get all of this right. We also launched a wechat game in China: 5,000 played it in the first two days, which for us is still an exciting number. For Off White, people could vote on how the dress would look that Virgil prepared, and there was a nice engagement on Instagram. Will these (activities) revolutionize? No, but we need those little cherries every time so when people come to our web site they can say, “Wow, these people are really trying to surprise and entertain me.” Last Christmas, we had an exclusive series of feathers designed by different designers. I don’t know whether people will keep them or put them away in a drawer, but I and the whole company believe that these little things count. Can they compensate for big things going wrong? No. But they can make a difference. We want to be more than just a shop.

WWD: You offer about 200 top international brands. How important are emerging designers and new names at mytheresa.com?

M.K.: Again, it’s the analogy of the cherry and the cake. At the moment, the cake is dominated by the big names. Gucci, Valentino, Prada, St. Laurent, Chloe, Fendi, this is where our business is, but if we only had those and continued to have those, where’s the newness?  And then the newness comes – like Vetements a few seasons ago or Jonathan Anderson. Even if they never reach or even come close to those other brands, they’re still very important. Because that’s what our customers expect us to find and present.

WWD: Any recent discoveries?

M.K.: We are very happy with the business of Zimmerman, with Ula Johnson, Attico, Magda Butrym. We also just launched Tory Sport, which is a nice cherry in the logic of “same woman, more occasions.” We don’t want to just dress her for events and for her work, but also her sports and other leisure activities. We really spend time understanding her, and her three biggest leisure activities are traveling, family and sports. And within sports, it is either running or studio. It’s not golf, tennis; that’s not our woman. If we can dress her for all these occasions, we would love to.

WWD: You’ve done any number of short films with designer partners.

M.K.: Videos, games, social competitions, films… Yes, there will be more. We’re working on a new film in October with a French designer, but I can’t give details now. In May, we also did a music video with Alexa Chung, and it was an exclusive video and an exclusive song – it’s our song! So I guess you could say we’re now a music producer (laughing). But we also believe fashion is fun, so games, movies and music (are part of it). And we travel a lot and do events. We even did food recently: beautiful little mytheresa cookies from Paris with all the must-have designer pieces of the season.

WWD: In summer 2015 you started instashop-mytheresa.com to let people shop your social media picks. Is that still current and what other new kinds of interaction do you want to offer?

M.K.: The offer to shop on Instagram didn’t take off. But again, as it’s so hard to predict what will work or not, in our business you are forced to jump on everything. If you would research to find out if it works, six months later you’d realize you should have done it. You need to find ways to be very agile, to try things out. So we did the game for wechat. Will this be the beginning of many more games?  I don’t know.

We do know our customers own so many devices, and the highest penetration of Apple Watches is in our target group, but it hasn’t worked yet. We don’t see many orders on Apple Watches, but maybe the next watch from Google will do the trick. We don’t know. The speed of innovation on the technology side is so fast, but which one will really work, we don’t know. I recently talked to someone at Amazon who gave me the stats that in the U.S. every 20th order is already on Alexa. It’s daunting. So is this the next big thing, screaming at devices in your home? (laughing).

WWD: Anything else on the social media front?

M.K.: We are really amazed at what a social media platform like wechat can do. It’s a lifestyle, from communicating with friends to how to pay an invoice. We have not seen something like that in the West. Clearly in our customer group the highest interest is in the messenger services, and What’s App is more important than Facebook and better than Twitter (as) you can add pictures.

WWD: You have an extremely international clientele in 120 countries. Are any markets showing particular potential or challenges at present?

M.K.:  It’s a very flexible or erratic world. So Russia is coming back – but from really a level of no demand. Will this continue? It depends a lot on the politicians involved.  China has not exploded – it’s still there and actually quite stable. Nothing melted there.  Korea is an exciting market but there are also domestic political issues, and huge ones of course with their northern brothers. The only geography which may be surprising in the sense it’s not on everybody’s radar is Southeast Asia. These are countries of  100-200 million people and where women often play an important role in business. So beyond China and Korea, there is Thailand, the Philippines, Malaysia. These are huge counties and there is a lot of affluence and professionalism, and some even dwarf many small European countries. The one white spot remaining is India, but given the infrastructure and red tape, it may stay that way for many years to come.

WWD: Fashion may not be about age, but is there a shift going on in with mytheresa.com’s demographics?

M.K.: We are seeing more younger customers, but it’s due to us globally growing. Our typical customer in central, continental Europe is older than the average customer in Asia, but I think it’s not us, but as such. The luxury shopper is generally younger there. What is important and good for the luxury industry is that we see a huge interest from a younger audience in our products and brands. Even if they’re still not in an income position to afford Gucci, Vetements, Off White, Balenciaga, when the team puts out a social post, there is enormous interest in these brands. They’re not the heavy buyers yet, but luxury is here to stay. It’s not for classic older customers, and is reinventing itself. And people find it desirable. Not everybody, but a significant part of the younger generation are getting joy and fun out of it. Which is important for the whole industry, because we are not in an industry that will die out because the future doesn’t see luxury. That’s not the case.

WWD: We heard you expect mytheresa.com to be one out of about two online multibrand stores selling international luxury brands, so apparently you expect a significant consolidation in the luxury online retail business.

M.K.: Yes, I do. We’re still in a phase where people who do a decent job will enjoy growth online. It’s not hard to grow because the channel itself is growing. Today digital has a share of slightly less than 10 percent of luxury, and I definitely expect this will go up to about 30 percent. So it’s a market that’s tripling, which is beautiful, but there is an end to that (kind of growth), and as it gets closer, there will be a consolidation. It will be the better versus the best. We are not only thinking about tomorrow but have a longer-term vision, and know the only way to be one of the remaining two is through customer loyalty. If they want you to stay that protects you, but if they see no reason for you to exist, you’re gone.

WWD: Other online players are now opening physical spaces, but you don’t need to. What’s the advantage of having both Theresa and mytheresa.com, or are they separate spheres?

M.K.: The store was there first. Theresa is our mother, but the kid has outgrown the mom. It’s emotionally important that we’re a retailer, and I think that via the store we get an additional feel for the market and the products. And it’s also emotionally very important for many of our vendors, so when they come to Munich to talk to us, they also stop by the store. Why? They can see how we treat the product and how we engage. In terms of more Theresa stores, that not in the plan.