Co.Design

Yoox.com's CEO on Betting Big on High-End Design

Americans love high-end fashion. Why can't they love high-end design?

Remember Pets.com, and its fiery explosion? In 2000, the Internet wasn't exactly a friendly place for fledgling e-commerce. And yet that's exactly when Federico Marchetti founded Yoox.com. Having just spent a decade learning the ropes of entrepreneurship in his studies in Milan and at business school at Columbia, the then 30-year-old Italian wrote a business plan whose first line read: "Yoox.com is the global internet retailing partner for the leading fashion brands." That line is still Yoox's core mantra, even as the company has gone public, gone global—with offices in Milan, Bologna, Paris, Madrid, New York, Tokyo, and Shanghai — and branched off into a full-fledged Web-design and distribution partner for brands like Diesel and Emporio Armani.

Since 2006, Yoox.com has been building out its design section, betting that the same person who might blow $490 on a pair of Givenchy booties might also drop two grand on a Memphis-style vase by Ettore Sottsass. The gamble has paid off: In the first quarter of 2010, profits were up more than 100 percent, and a new partnership with Established & Sons, one of the world's chicest furniture brands, was launched. Last week, Yoox unveiled its latest redesign with a completely revamped design section. We recently spoke to Marchetti about the brand and its plans for design domination.

Yoox.com launched in 2000 as an online retail partner for fashion brands. But its push into the design world began only a few years ago. Design has become an increasing presence on the site: Kartell's shop-in-shop launched late last fall as did a new partnership with the British furniture brand Established & Sons. What inspired the crossover?

Yoox.com was always meant to be fashion and design together. I?m not a pure fashion person; I?m actually more of a design person. And in fact the first Yoox.com website was conceived and designed by two architects — Alessandro Guerriero, who was a founder of Studio Alchimia with Ettore Sottsass and Alessandro Mendini, and Alberto Biagetti, who was his protégé.

Italy of course has a very strong competitive advantage in terms of design — even more so than fashion, frankly. But the main idea was simple: Customers who buy stylish clothing and shoes also love home design. It's a question of style — style for yourself, style for your house. And it really works. Fifty percent of the people who are buying design are also buying fashion on the site.


One of the barriers to design e-commerce has traditionally been the cost of shipping. It's obviously more expensive to send a Zanotta table worldwide than a Marni dress. How has Yoox addressed that issue?

The assumption is that when a customer goes on Yoox.com, it's for entertainment, a break during office hours. And our policy is that if you don't like the item when it arrives the next day, you can send it back for free. A small portion of the cost of shipping you don't get back, but we're talking about a few dollars here — the cost of a cappuccino at Starbucks.

If this is the customer, we don't think we can sell design that is planned. By that I mean if you need to furnish your house — a bed or a sofa — it's something you plan two, three months in advance. It's not something you do during your lunch break. So we don't have these objects. It's mostly vases, things for the kitchen, chairs, some small tables. If you order a big sofa from most of the players online, they ship it in three months. This is the opposite philosophy of Yoox.com. Everything you see is available and everything you buy arrives at your home a few days later.

Americans are typically a bit slower on the draw in terms of design compared with Europeans or the Japanese. Do you feel that there is as much of a market here? Is the key to breaking in actually to pair design with fashion?

The U.S. is already our second market and I think next year has all the potential to be our first. We just added a few people to the board of directors, we moved the office around the corner here in Tribeca — it's becoming very important for us.

But what are the other top websites for design in the U.S.? Moss. For us, it's good. Our customer is more fashion and design together. Maybe our customer is in love with Zanotti shoes, and Yoox.com becomes a way to educate them if they don't know about certain designers.

The concept of the site, though, can be difficult for the American market. Americans are less conceptual than Europeans. In the beginning, many American people said, "What is this?" We have eight million visitors per month but the main image on the homepage, which changes every month, is something that is not for sale. It's not a product. It's an artistic expression of our brand.

Can you tell me a bit more about the Established & Sons partnership?

Yoox.com sells items from E&S's permanent collection but it's also the exclusive purveyor for the company's lower-priced Estd collection. Established & Sons chose the format of a shop-in-shop. It's more visibility for them than being part of the multi-brand section. Together we develop new content all the time. Every two or three months, a new product comes out, exclusive to the Web, and along with it there will be new content, a special interview, etc. It's a partnership both from a content point of view and a product point of view.

For the multi-brand section, there's less product development but during certain periods, like Christmas, designers will develop special products for Yoox.com. We launch a different theme each Christmas. It becomes like a cross between a department store and a magazine, because in the end the Internet is both distribution and communication. A magazine launches a theme and the fashion editor puts together the different elements and we do the same. The difference is that we sell these items.

Yoox Group has pioneered a radically different business model in which you not only sell brands through Yoox.com but you power separate e-commerce sites for a number of single brands. How does this concept work in practice?

We run the websites for about 20 brands, and we launch six or seven new sites each year. When it says "Powered by Yoox," basically we manage the technology — the infrastructure, the navigation — plus all the supply chain including distribution. The products are in our warehouse, so we ship them and we handle returns and invoicing. We do search engine marketing and we manage the Web-marketing budget on each client's behalf. We have an agency that creates the web design for each online store, we consult about social networking, and we do the mobile aspect. We're a true online partner in every respect. What they do is what they can do better than us: the product assortment and the communication. For them it's more efficient, they can focus on what they do well.

Is it part of the plan to begin launching mono-brand sites for design as well? Right now I can only think of a handful of design companies that run their own e-commerce.

Yoox is a public company, so I can't make any forward-looking statements. But you can come up with the answer yourself. Fashion companies were a bit late to the Internet, and design companies are even later. But I think they will be the next wave of mono-brand e-commerce, and I think the demand will come from the companies themselves. In Italy, there is an expression — l?appetito vien mangiando — the appetite comes by eating. Basically the more they learn, the more they understand the medium and maybe one day they'll decide to have us do their mono-brand store. We are educating brands about how to get onto the internet successfully and without mistakes ? that's our role.

Do you have any advice for design brands that might be thinking about launching such a site?

We never do anything short-term that could make a lot of money but might also put the brand in danger. For example, we don't believe in heavily discounted flash sales. They make a lot of money, but I think it's dangerous for the brands and designers. Your image online is becoming even more important than your image offline. The Internet is everywhere, so if you sell at 90 percent off only for on weekend, still 10 million people see that. I think it's better to do a terrible shop on Fifth Avenue than to make a mistake on the Internet. So that's what we're there for — to serve and to protect.

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