“In 1999, I fell in love with my computer,” said Natalie Massanet, founder and chairman of Net-a-porter.com. “I thought maybe we should be moving the store to where the customer is, which is right in front of her. Women’s lives have changed quite a bit.”
The Net-a-porter customer no longer has time to spend all day getting her hair done and shopping on the high street, she said.
Massenet had been an editor at Tatler, W and WWD. “I realized there was an amazing disconnect between media and retailers,” she said. “Fashion magazines are the marketing arm of stores” in the sense that they create excitement and desire for the products the stores sell. But often, women can’t find what they see in magazines because the stores don’t buy the items. They’re conservative or they buy based on what sold last year rather than what’s new or in the magazines, she said.
So Massenet decided she wanted to start an online store with hard-to-find, must-have items. “If we could make our Web site as exciting as a page in a magazine, we’d probably be a good chunk of the way there,” she said. “Women have a special relationship with their magazines.”
The business started with $1 million in funding, took items on consignment from partners such as Jimmy Choo and bought merchandise on poor terms because it had no credit. “Our recipe for success is to launch at the worst possible time,” Massenet said. “Why have amazing funding when you can do it with no money?”
“No money helped us in the long run because it made us roll up our sleeves and be scrappy and come up with something,” she said.
Shortly after the site launched, the dot-com bubble burst, starting with the failure of Boo.com, an online fashion retailer that spent more than $100 million.
“Nobody wanted to invest in e-commerce; they all wanted to invest six months before,” Massenet said. “The lesson for investors is don’t follow the market. Sometimes a good idea remains a good idea.”
Net-a-porter drew traffic to its site with mentions in online media. An article in the July 2000 issue of Vogue called it a “chic” new boutique. It was “an amazing lift and great endorsement,” Massenet said.
Brands also helped raise awareness for the fledgling retailer, and Net-a-porter, in turn, helped drive sales for brands online and off.
Jimmy Choo launched around the same time as Net-a-porter. Every time someone did a search on the brand, they would end up on Net-a-porter, since Jimmy Choo wasn’t yet widely available online.
“The brands have definitely helped with our awareness,” Massenet said. “And we’d like to think that, now that we’re a little better known, we can go out and raise awareness.”
Early on, when selling online was still considered a novelty and risky, Net-a-porter started selling Burberry Prorsum. Unknown to Net-a-porter at the time, Burberry had instructed its established brick-and-mortar accounts to let the company know if there were any complaints. Net-a-porter sold out of a pink trenchcoat within two hours. It turned out that the same coat had also sold out in Burberry’s New York and London stores after it had appeared on the Net-aporter site.
As a result, Massenet met Burberry’s then chief executive officer, Rose Marie Bravo, who suggested the two create items to drive sales for both businesses. “We love fashion, we love technology and, at the base of it, we love working with our partners and driving business,” Massenet said.
It’s important to train customers to act quickly or they’ll lose out on a sale, she said. From the very beginning, Massenet wanted to be a full-price, full-service store rather than offer the discounts some saw as synonymous with the Web.
The company developed software that would automatically compute the sales tax and duties in every country and include them in the price so the customer wouldn’t be surprised. It introduced same-day shipping in London and New York, overnight shipping to Europe and two-day service to Hong Kong.
Now the company has grown to $100 million in sales. It has more than 200,000 customers and gains 7,000 new customers a month. Editorial content is updated weekly and is viewed by more than 2 million readers each month.
“The editorial was a very elegant way to invite people back to our site and create a destination,” she said.
Net-a-porter has moved into new territory by offering video of runway shows and select items for sale the same day from Roland Mouret, Alexander McQueen and Halston.
“What was once a trade event is now a consumer event, but there’s an extraordinary lag between putting the shows on and the desire in front of the customer base and actually getting the product to her,” Massenet said. “Why don’t we let the girls around the world see the new Halston and get it to her the same day? It does mean the buyers have to work a bit in advance.”
The company is “pushing the envelope just a little bit and trying to show our designers and our brands there are new ways of marketing to a consumer base,” she said. “We’d like to get everyone collectively thinking about how we can change selling.”
Net-a-porter is branching into mobile commerce and developing an off-price site. A shopping application optimized for the iPhone could be available as soon as February, Massenet said.
“The Internet is a very efficient sales tool for previous-season stock,” she said. “It’s a different customer, a more aspirational customer. We call it the Outnet, which is the outlet for Net-a-porter.”
Despite global economic troubles, the company is still ahead of plan. Nonetheless, it is buying cautiously. “In terms of online trading, we’re still performing ahead of budget, but it doesn’t mean we’re not worried about what could come next,” Massenet said. “We are growing from a low base, first of all; we are acquiring new customers at a rate much faster than we would be losing customers, and we are a discreet shopping destination,” which could work in Net-aporter’s favor in difficult times.
“When neighbors don’t have money and times are tough and people are criticized about shopping, and Mrs. Obama is saying she’s shopping at J. Crew, it’s very cool to say you’re not spending money now,” she said. “They are still buying very expensive items, but maybe they’re not talking about it the way they used to.”
“We’ve never been through this before, we don’t know if it’s going to trickle down and hit us,” Massenet said. “Actually, it could turn out to be an opportunity. Maybe everyone’s spending will migrate to dot-coms and we will have underplanned for next year. We’re conservative in our plans for next year, so we’ll see.”
Massenet predicted that e-commerce will be “huge.”
“Stores are going to be magazines and magazines are going to be stores,” she said. “Spring-summer and fall-winter seasons are probably completely irrelevant. People just want great product when they can get it.”