DIRECTING CYBER TRAFFIC: ELUXURY SIGNS DEALS WITH 3 MAJOR PORTALS
Byline: Valerie Seckler
NEW YORK — After only five weeks live online, eLuxury,com., Bernard Arnault’s ambitious Internet venture, is already taking its big first steps to pump up customer traffic.
The upscale e-commerce player today is set to announce alliances with three of the Internet’s major portals — AltaVista, Yahoo and LookSmart — and they’re the first among several marketing initiatives in the works for the second half of 2000.
The deal with AltaVista is the most elaborate and has resulted in the launch of a Designer Shops channel, which is now open in the portal’s shopping area. Currently, eLuxury, which created the channel along with Alta Vista, is featured exclusively at that destination, but the portal may add more players over time.
“What we’re trying to do is to advertise the site, both online and offline, leaving no stone unturned — online with this deal and more to come; offline to start this fall,” said Alain Lorenzo, president and chief executive officer of eLuxury-.com.
“We are in the process of firing all the weapons, one by one,” Lorenzo noted Monday in an interview from Paris, where he was busy packing up his house to relocate to his new home in Tiburon, Calif., north of San Francisco, where eLuxury is based.
“By doing it step by step, we can assess the costs and benefits of each.
“The idea is to acquire as many customer names as possible so that those users register with us and start buying things; then we can build a data base we can mine,” he added. “What we’re really interested in is converting browsers to shoppers.”
According to Lorenzo, eLuxury is “right on target” with its business plan, in terms of its “customer traffic, purchases and average transaction size,” but the chief executive declined to specify.
As for the portal deals, they call for:
The launch of the Designer Shops channel at AltaVista, featuring all of the products, services and fully integrated functionality of eLuxury.com.
The assumption of a “majority presence” in Yahoo Shopping’s Designer Shops and Luxury category.
ELuxury to become one of the largest sponsors of LookSmart’s Fashion and Beauty Center.
“These deals are not just a case of leaving our own name on a portal,” Lorenzo emphasized. “AltaVista and Yahoo have given us large chunks of space because they liked our chances; they liked our collection of brands.”
Those labels include Bottega Veneta, Bulgari, Celine, Christian Dior, Ebel, Fendi Watches, Givenchy, Guerlain, Jean Patou, Jonathan Adler, La Perla, Louis Vuitton, Malo, Michael Kors, Pratesi, Salvatore Ferragamo, Tag Heuer, Thomas Pink, Trussardi and Wolford.
The site went live with 2,200 stockkeeping units comprising 61 labels; now there are 67 brands at eLuxury with plans to extend the list to 100 by October.
Terms of the partnerships were not disclosed, but Lorenzo said they either call for the portal to share in a percent of eLuxury’s sales stemming from links with that site, or to realize a fixed amount of revenue based on the portal’s provision of minimum levels of traffic deemed acceptable by eLuxury.
“To gain access to their portfolio of labels — Dior, Bulgari, Vuitton — is tremendous for us, a real coup,” said Richard Rogowski, producer of Yahoo Shopping.
Rogowski continued, “I think this is a little unexpected; something that will be interesting to visitors at Yahoo Shopping, which has a mass audience.
“But a lot of Yahoo users have college degrees, high disposable net incomes, and are time-pressed,” he added, “so, intuitively, we feel there is a shopper at Yahoo for these items.”
The deal eLuxury has fashioned with Yahoo calls for links to eLuxury at the Yahoo Shopping area as well as to eLuxury’s virtual boutiques. So far, eLuxury has mounted boutiques for 20 of the 67 labels it sells online, and expects to have opened 10 more by October.
Expressing less enthusiasm over the partnerships Monday, however, was Heather Dougherty, digital commerce analyst at Internet consultant Jupiter Communications. “With luxury goods, I’m not sure they’re going to reach the customer they’re looking for,” Dougherty said of eLuxury.
“In terms of getting their name out there it could be effective, but I’d be surprised if their conversion rate is high,” the analyst projected.
According to Web ratings agency Media Metrix, Yahoo pulled the third-most unique visitors in the U.S. in June — after America Online and Microsoft — or 48.4 million people. AltaVista ranked eighth, with 15.6 million unique visitors, and LookSmart came in 17th, with 11.7 million (see chart).
“Portal deals and affiliate programs are something e-tailers have to be careful with in the luxury space,” Dougherty cautioned. “As each day goes by, the demographics of the Net are getting less upscale and more mass. Yahoo, especially, is mass; about as mass as it gets.
“Many parties who ran out and did deals with AOL have had mixed results. The question for eLuxury,” she pointed out, “is how valuable are those new shoppers going to be?
“A $930 Vuitton dog carrier bears some sticker shock for many customers.”
Looking ahead, Lorenzo said, “There will be similar deals down the road. They won’t be comparable with the sheer traffic we can get from these portals, but they will be focused on community and content sites that can bring us a more targeted customer.”