RISING NET WORTH
AS THE E-TAILING FRENZY FOCUSES ON LUXURY ITEMS, THE COMPETITION AMONG MULTIBRAND SITES INTENSIFIES.
Byline: Eric Wilson
The tightly held reins of luxury brands are loosening up a bit when it comes to selling online.
The pioneers of upscale e-commerce are beginning to prove themselves as viable sellers of prestige labels in atmospheres well suited to the goods, and luxury labels, in turn, are beginning to open up to the concept of Internet sales.
For instance, Voyage, the tony London boutique so exclusive it requires guests to carry membership cards, recently struck a deal with BestSelections.com to sell some of its products. LuxuryFinder.com, another e-commerce site, has more than doubled its vendor base to 60 brands in the past six months to include recent additions like Lacoste sportswear, Frette linens and T. Anthony home furnishings.
And there are ongoing developments as LVMH Moet Hennessy Louis Vuitton launches its Eluxury concept, exclusively selling online its stable of brands from Christian Dior to Celine; the upcoming launch of Fashion500.com, with former Bergdorf Goodman chief Stephen Elkin at the helm, and LuxLook.com’s planned August debut, partially funded by Holding di Partecipazioni Industriali, as a luxury accessories retailer featuring pieces from Bulgari, Dolce & Gabbana and Versace.
Until recently, these brands made only baby steps toward selling online, but that’s changing quickly.
One factor is that investment bank analysts have recently favored e-commerce sites that focus on expensive designer goods because they have a stronger chance of profitability than those that focus on volume sales and, subsequently, have been overwhelmed by infrastructure and shipping support costs. Another is that a handful of independent sites have made headway toward establishing themselves as luxury brands in their own right through advertising, marketing and presentation efforts.
But at the same time, their arrival is threatened as traditional retailers are also targeting online sales, including expected launches from Saks Fifth Avenue and Barneys New York, and existing sites such as NeimanMarcus.com, Nordstrom.com and Harrods.com.
Keeping the competition in mind, the entrepreneurs of some existing sites, as well as e-commerce destinations under construction, are working to create identifiable brands on their own, ones that take varying approaches to the word “luxury.”
At BestSelections.com, one of the longest running luxury-driven sites, having launched in January 1999, the philosophy is to offer “best of” merchandise from a broad array of retailers around the world. Its offerings — examples include $440 Jimmy Choo snakeskin mules from Tracey Ross, Alberta Ferretti leather jackets from Scoop at $575, Touche Couture’s ostrich skin pet carrying case for $3,950 and a single jar of spreadable fruit from Sarabeth’s Kitchen for $10 — are shipped directly from the individual retailers in their own packaging.
“If you ordered from Amazon.com, everything would arrive packaged the same way,” says Christine Merser, chairman. “From us, everything is wrapped in its own way. Obviously, that doesn’t brand us as well, but we make sure that every store we choose cares about the customer as much as we do.”
To distinguish itself among other e-commerce sites and to further cement its luxury image, BestSelections.com hired Princess Michael of Kent to write a monthly column about her worldwide travels and what she buys in various towns. Her first report focused on Venice, with site connections to two London stores that sell linens and Venetian glass through BestSelections.
The site features a hip list of retail partners, including Scoop in New York, Tracey Ross and Emma Gold in Los Angeles, The American Hotel in Sag Harbor, N.Y., and Voyage in London, which reflect a level of taste of the company’s merchandising team and the social connections of its president of international, Roberto Devorik, who formerly worked with Versace in London and assisted Princess Diana with her personal shopping. Princess Michael also helps the staff find similarly minded stores.
“Luxury in my mind is no longer a word that just speaks to cost,” Merser says. “It’s something that works for you, and it can be the best of whatever category you might be interested in. If it’s hot chocolate, then it’s Serendipity hot chocolate for $5. That’s a luxury product.”
Another active multibrand site, LuxuryFinder.com, launched in December, also contains original editorial and a broad array of product categories. However, most of the merchandise sold through the site is warehoused and shipped directly by LuxuryFinder.
Among its offerings are a $990 beaded Badgley Mischka handbag, $945 python hobo handbags from Lambertson Truex, an Asprey & Garrard topaz daisy necklace for $19,700 and paintings by George Romney and Thomas Gainsborough priced upward of $125,000, although art work purchases are queried through a partner dealer, Richard L. Feigen.
James Finkelstein, president of LuxuryFinder, says the site’s features include the ability to search for luxury items on the Internet, regardless of whether they are carried by LuxuryFinder, and a “luxury calendar,” where customers can use an e-mail service that alerts them to social and cultural events in various cities, as well as personal reminders via e-mail of anniversaries and birthdays, along with gift-giving advice.
“When we started, we really had to persuade people to add their brands to the site,” Finkelstein says. “People are very concerned about their image and brand, but now it’s really a question of how quickly we can get their brands on.”
Other designer sites are still in development.
Style365.com launched in February as an online guide to style with features on fashion, interior design and leisure activities, although not entirely geared toward luxury items. Its e-commerce component is still in development.
Style365 is one of the most stylized of the current online offerings, with a design by Massimo Vignelli that features related imagery from Bruce Weber and Mats Gustafson. It features a directory of what its editors consider to be some of the most stylish Web sites on the Internet, listing fashionable Web sites from Costume National, Yves Saint Laurent, Jean Paul Gaultier and Levi’s, plus leading sites in technology, food, gardening and travel.
“If you considered Lycos or AOL to be the yellow pages, what we have created is the gold pages,” says Terron Schaefer, a co-founder of the company who previously was a senior vice president at Warner Bros. after holding retail marketing positions at Harrods, Macy’s, Bloomingdale’s and Filene’s.
Through connections made at those positions, Schaefer assembled a board of advisers for the site that includes architect Frank Gehry; Joyce Ma, chairman of Joyce Boutique; Michael Steinberg, the former chairman of Macy’s West, and Myron Ullman III, group managing director of LVMH.
Besides the pedigree of its contributors, Style365’s major attractions include an absence of banner or blinking advertisements, which Schaefer called “visually offensive.” Vignelli designed large, square ads that more closely resemble magazine pages, with advertisers like Clinique, Neiman Marcus, Saks Fifth Avenue, Nike and Waterworks.
What will eventually be sold through the site is an amalgam of products being designed exclusively for Style365 by its board, including chairs and desktop designs by Gehry, jewelry by Ibu Poilane — a Karl Lagerfeld find who designs for Chanel — and printed gowns and bags.
To establish itself as a brand, Style365 has also lined up a series of designers and style luminaries to host online conversations, including Geoffrey Beene, Frederic Fekkai and Sam Shahid. The site is also a sponsor of the Council of Fashion Designers of America’s American Fashion Awards and will simulcast the event on June 15.
Also poised to launch at press time was LVMH’s eluxury.com.
Elizabeth Ingrassia, chief content and creative officer, says the site’s ambition is to distinguish itself by its product offerings and shopping services.
Among the brands it will carry are Celine, Christian Dior, Erickson Beamon, Louis Vuitton, La Perla and Trussardi. She added that the site will also be the exclusive online retailer of several non-LVMH brands, including Baccarat, Bottega Veneta and Bulgari.
Eluxury will also feature an editorial component with ratings on spas and travel destinations, reviewed anonymously by staff writers, who will be prohibited from accepting comp trips, she said. The company is also staffing up on customer service, noting that luxury products typically require a greater degree of customer satisfaction and that there will be no advertising on the site.
“It will be a guide to the best luxury services in the world,” Ingrassia says. “We will personally recommend the best dishes in a restaurant and the best rooms in a hotel. We’ll really go lengths to provide in-depth information on all the popular passions of a luxury consumer.”
Lastly is the upcoming launch of BigWigAuctions.com’s Luxury Channels Network, a site that will use broadband technology to offer video and digital audio broadcasts of programs related to luxury living as well as expanding its currently available product range. The site currently holds small auctions, mostly of fine jewelry and accessories.
Some recent items that have sold on the site include a woman’s Ebel sportswave watch, a case of Domaine de la Romanee-Conti wine and tickets to Barbra Streisand’s millennium concert.
While the Luxury network is planned to launch this summer and is expected to include fashion content, BigWig’s chief executive officer, Scott Lewis, says the company doesn’t plan to begin to approach luxury apparel retailers until at least the third quarter of 2000.