LONDON — Apple, Facebook, Twitter — and now Yoox Net-a-porter Group.
The fashion e-commerce player has become the latest tech brand to partner with IBM. Its aim? To unite the Yoox and Net-a-porter businesses on one platform; improve customer service and speed to market, and capture quality data.
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The long-term partnership unveiled on Monday also marks the first time that Yoox and Net-a-porter, which merged last fall, are leveraging outside software and tech development in a major way. In the past, both Yoox and Net-a-porter had relied mainly on in-house staff to develop tech products.
YNAP said its purchase of IBM products and its ongoing cooperation with the company will help the e-tailer to channel its in-house technology efforts toward areas such as personalized customer and tailored brand experiences; mobile and native app developments; customer insights and analytics; social media marketing, and cognitive capabilities.
The deal is a clear sign that Federico Marchetti, chief executive officer of YNAP, is moving aggressively to improve on his professional strengths: Back office engineering and data analysis.
The terms of the agreement were not disclosed, nor would YNAP put a price on the value of the IBM partnership. Alex Alexander, YNAP’s chief information officer, said the financial figures and projections the company has already reported would not change as a result.
“This is all about how we can enable growth; the innovations to achieve it, and how to bring those innovations to the market,” Alexander said in an interview. “We’re a scale business, and obviously we want to grow our market share, and our customer base.”
Last fall, Yoox merged with Net-a-porter, creating an online fashion giant that offers in-season and discounted collections and operates e-commerce sites for numerous fashion brands, including those in the Kering stable.
In November, YNAP said it expected to incur one-off investments and non-recurring operating costs amounting to a total of 95 million euros, or $105 million, cumulated over the period of 2015 to 2018. The vast majority relates to capital investments dedicated to the development of a technologistics platform across all the group’s online stores.
Marchetti has made no secret of the company’s growth potential and has been bullish since the merger was revealed a year ago.
In October, when YNAP debuted on the Milan Bourse, he admitted he had underestimated the new company’s potential to reach 60 million euros, or $67.2 million, at current exchange, in earnings before interest, taxes, depreciation and amortization and capital expenditures in three years. He called that figure “conservative.”
Last month YNAP said that in the 12 months ended Dec. 31, pro-forma revenues for the group rose 30.9 percent to 1.7 billion euros, or $1.8 billion, compared with 1.3 billion euros, or $1.7 billion, in 2014. At constant exchange rates, sales were up 21 percent.
The first post-merger, full-year results will be released Wednesday evening.
Thanks to IBM, YNAP will be able to create distinctive customer and brand experiences for all of its multibrand and monobrand storefronts across the different touch points. The deal will also help to facilitate such services as same-day, in-store pickup or home-delivery in quick time from the nearest store of one of the brands it works with, and improve inventory visibility online and offline.
The partnership will extend to IBM WebSphere Commerce, IBM’s e-commerce suite, which offers business tools such as precision marketing and merchandising, allowing full independence of usage by internal and external business stakeholders.
“Our online flagship stores are very excited because we’ll be able to offer them expanded and enhanced omnichannel capabilities that will benefit their customers and the personalization [services] that they’ve been wanting to offer,” said Alexander.
“The higher-end brands want to differentiate, they want to provide that special customer experience. We will also be able to provide a global view of the inventory, so they can see inventory in store or online.
“For me, one of the biggest enemies of customer experience is ‘out of stock,’ and we’re able to eliminate that by having the product at the right time for our customers.”
Alexander added that YNAP will continue to rely on a mix of in-house tech teams, IBM software and intelligence, and other outside consultants as well to create a “unique” product and platform for its luxury and fashion brand partners.
“We’ve been on a journey of making what we do best in class, and broadly we’ve been doing that in-house. We will retain some of the best-in-class products we have developed ourselves,” he said.
He insisted the IBM deal “is not about outsourcing. In fact, we are investing more in our own people, and want to focus more on innovation. Last month, we announced the hiring of 100 additional technology experts. This deal is about how we support our customers with the agility and speed they expect from us,” he said.
The data gathered via the IBM technology would be used to personalize services across all channels, and to engage in real-time marketing, said Alexander.
“Whether customers are using their mobile or the Web, we can understand their shopping patterns and send them relevant marketing. When they’re using mobile we’ll be using location-based services, e-mail, SMS. There’s a very deep, personalized customer engagement that we can establish,” he said.
The IBM integration, he added, is in its very, very early stages. “These things will typically take a couple of years to achieve. We will phase in the implementation over the next couple of years,” he said.
Monday’s announcement also said that YNAP and IBM have created a fashion and luxury innovation committee that will allow YNAP and its brand partners to contribute ideas and input to IBM for the continuous development of bespoke e-commerce solutions.
YNAP will also join the IBM customer advisory council, a forum for a select group of IBM customers, whose input can influence future IBM product development.
YNAP is the latest company to partner with IBM. Last year, IBM inked a deal with Facebook to enhance the social network’s marketing cloud services, helping retailers and advertisers on the site. The multinational company also has deals in place with Apple to develop and sell cloud-based apps for range of different industries — including airline, healthcare, banking and retail — and Twitter to develop apps that analyze traffic and trends.