HOW TO SPEND IT
In less than a second
by Nicoletta Polla-Mattiot, March 1, 2019
It's worth saying this right away: I made my first online fashion purchase yesterday, less than twenty-four hours before meeting Federico Marchetti.
I buy with touch, I like to feel a dress on me more than to see it, so I'm the worst digital buyer. I downloaded the app, registered and bought a jacket from 8 by Yoox, the first collection developed thanks to artificial intelligence, creativity based on algorithm and the binary code inscribed in Yoox’s name.
I choose express delivery, one day shipping. If all goes well I will receive it just before the interview.
Second premise: I may be e-commerce averse, but I make up for it by being completely addicted to Instagram. The idea of this interview was born from the following Instagram posts: a fake chemical formula, two forerunners side by side and a swimming pool. At the end of the year, YNAP’s president and CEO posted "C2C +O2O" as a prediction for the future of commerce in 2019. "Don’t worry we’re not going back to chemistry class. It's the formula we've been using for nearly twenty years: Content to Commerce and Online to Offline." This is the first topic I intend to investigate, that vocation to identify shopping and the entertainment industry which accounts for the group's success (to the extent that the term ‘entertailer’, coined by Marchetti, is a registered trademark). Not only that, there is also the relationship between the physical and virtual store, which is the sweet spot in the luxury market that most brands want to attain for the future.
But let's go back to Instagram for a moment and the second post I mentioned: a photo of a table waiting for its speakers, on the left Tim Berners-Lee, to the right Federico Marchetti. The inventor of the World Wide Web, which will celebrate its 30 year anniversary in March 2019, and the inventor, only eight years later, of the marriage between the Internet and luxury fashion.
Inevitably we start from here, from the concept of timing. "Time, for me, is timing and I have to say that I have always got it right," he says with that mixture of irony and awareness that sets the tone of our whole conversation. This, along with enquiring eyes, those of an eternal boy and a natural old-fashioned kindness. "If you think I invented Yoox at the end of 1999 and founded it in 2000, the day of the spring equinox! Basically in three months I had the idea, made the business plan, collected the money and opened it. This was the first piece of the puzzle, my first page, and already it contained the whole story. I go to the notary on March 21st, I sign and June 21st, the summer solstice, Yoox.com is born. "
In April 2000, the investment in Dotcoms showed disappointing results, from which a wave of sales led the Nasdaq, the index of technology stocks, to drop almost 9 percent in three days. This triggered a vertical drop in the sector: many Internet companies closed within a year. "At that moment, all of the gates of Paradise, that is, the doors of venture capitalists, closed. Just like that, in a second. A moment before they were wide open, a moment later everything changes. For three years, no one made online investments. This is why I say that timing is everything, I started from scratch, I was poor. If only I had started two weeks later, we would not be here talking about it.”
Instead he keeps on talking and recounting his moves. The first in 2015 when Marchetti led the merger between Yoox and Net-a-Porter and became a global leader in luxury fashion e-commerce. The second - which is recent history - in 2018 when, with a valuation of six billion dollars, YNAP Group became part of Richemont, one of the largest groups in the world in the luxury sector.
"Being the first is important to me. I like to invent things, not copy them. We have never copied anything or anyone in twenty years. The eco-sustainable approach to fashion? We started it in 2009, now it has become a mantra for many others. The idea of being able to buy directly from the fashion show dates back to 2008, while the famous See Now, Buy Now debate started three years ago. Perhaps, however, the innovation that was most ahead of its time was the focus on mobile as our main sales channel since 2006: it was a year before the iPhone! In short, you always have to look at everyone else from the rearview mirror." Three million active customers in 180 countries and $2.5 billion in sales in 2017, more than half of which were on mobile, seem to agree with him. There is more evidence elsewhere: the first thing you see when entering the Milan offices of Yoox Net-a-Porter Group is a screen that transmits real-time purchases worldwide. In the two minutes it takes for my entry badge to be prepared a dozen bags flash up on the screen along with a few sneakers, a down jacket, a dress, two coats, a swimming costume, each with an indication of the location of the purchase (Manila, Tokyo, Castiglione delle Stiviere, a curious world tour that travels at the speed of a purchase every few seconds. Last Black Friday records were broken, with an order being made every 0.7 seconds). "Of course, it also takes luck, but you have to go and tease it and take risks. And then when you work hard, you obviously sacrifice time for yourself. You have to be hyper-organized: it’s the only way to survive. The commitments are now numerous, because there is Richemont, Alibaba, Yoox, Net-a-Porter, Mr Porter, Porter Magazine, The Outnet… Instead of Chief Executive Officer you should call me Chief Problem Solver!"
I wonder how much fun he still has.
E-commerce continues to grow in double digits. It is difficult to understand how far you can continue to push results. "We do not do forecasts, but the market we are in is a kind of river in flood, of which we are probably just a strong stream. I do not feel like I’ve arrived at that point. I always feel like I’m at the beginning of the story. Let's say I'm in a book of ten chapters and, if all goes well, I just got to the second one". In the world of online Amazon is a benchmark, unsurpassed in logistics and service, but the Bezos colossus sells commodities, "we”, says Marchetti, “we sell experiences." This is the world of luxury and also that of hard luxury, watches and jewelry, on whose online sale the group started betting in 2016 ("the first to do so"). Other firsts? "I have been working for four or five years on the synergies between the physical store and online store because they have the same customer, whether the customer goes to Montenapoleone or goes on the internet. It is necessary to integrate the experience also in terms of availability and accessibility to the product.” Being disruptive is a cliché from Silicon Valley, he notes on Instagram. "I prefer to be constructive, to build something brick by brick, we are constantly building, so I feel like doing a different job every year". Collaborations with artists on Yoox (the latest being Rob Pruitt with a series of 40 unique blankets), charity initiatives (like the one for the benefit of the Franca Sozzani Fund for Preventive Genomics), technological experiments (such as Daisy, the avatar that interacts and helps with purchases, a sort of virtual self that interacts beyond the phone. It’s Daisy and the future of 3D alter-egos, our extensions on the web, that inspired the cover of this issue of How to Spend it, with an avatar model). Lots of ideas and lots of money: a gigantic business if you think that the total online turnover in the world exceeds $ 2.2 trillion and is equal to 10 percent of total retail sales.
"I'm often pigeonholed in the role of a calculating businessman, a man of numbers, the stock exchange and big mergers. In my head, that’s only a part of me, everyone prefers to see my hard side, which is there, it has to be, but I feel more truly like someone who has ideas. Someone who at 13, in Ealing in London, bought a pair of orange boots in the sale (they were Timberlands before Timberland existed). It's my soft side. Perhaps I am just the reincarnation of an old shopkeeper from the Middle Ages." We’ll add to that picture a small verbal tic, the Latin ‘indi per cui’ that he repeats a number of times as he passes from one sentence to the next throughout the interview; and the inevitable "my daughter is the most beautiful in the world" with the correction "she really has the most beautiful hands in the world!"; and the fact that he never forgets a question and always goes back to give you his answer (“yes, Le Petit Prince never left a question unanswered"): the picture of this soft side is complete. Let’s go back for a moment to the Instagram profile and the post about the pool. It wasn’t just any photo, since it was taken by Henry Bourne. And it wasn’t just any swimming pool, since it was designed, along with the rest of the house on Lake Como, by a director like Luca Guadagnino. "For the first time in his life he worked as an architect with me. Here, again another first".
Post Scriptum: I'm in London tomorrow and I should receive my second online purchase, this time from Net-a-Porter. I chose the formula "you try, we wait." I can try it, touch it, look at it and keep it. Or return it. The story continues ... As Marchetti says, we are only on the second chapter.
Originally published in Italian in How to Spend It, Il Sole 24 Ore