"This is how I transformed the Internet into a luxury boutique."
by Piera Anna Franini, November 25, 2019
Photography by David Needleman
Before founding a company worth billions, Federico Marchetti had a dream: to work at Walt Disney. "I sent my CV, but it was not taken into consideration. Besides, in the US it is difficult to hire foreign candidates. And I wasn't interested in working from Italy. I wanted to stay where the decisions were made," he says. So, in 1999 he founded the Italian start-up worth over 1 billion dollars: YOOX.
In 2015, YOOX merged with the British giant Net-A-Porter and last year, YOOX Net-A-Porter was acquired by the Richemont group, with Marchetti as Chairman and CEO. It is him, at the helm of this global leader in online luxury with over 3.5 million customers in 180 countries. In 2017, before the Richemont phase, sales amounted to 2.5 billion euros.
Marchetti always arrives early. He was the first to merge technology and luxury, the first to understand that the future would go mobile. With the Ecobox, he launched the first packaging in e-commerce composed of 100% recyclable materials.
How does it feel to be a visionary?
“Visionary? That’s a strong word! I’m just a man with a good sense of timing.”
You do agree that you are talented?
“No. I only have the courage and willingness to take risks, qualities which can’t be lacking if you want to be an entrepreneur. You also must have vision, but it’s all about putting yourself in the customer’s shoes. I don’t have to invent major things, if I just think every day about what our customers would think.”
Meanwhile, YooxMirror was invented, a virtual dressing room that allows you to match clothes with an app. A revolution.
“It’s not genius. It's just the answer to a simple question: what would customers like? Probably try on clothes with an app. Done. When we started in 1999, clothes could only be tried on in boutiques. Then we introduced the dress trial service directly at home with free returns. Now, clients can try it before a virtual mirror."
A solid person. A true Romagnolo.
“Solid, but with so many dreams.”
They’ve named you an American-Romagnolo. Do you recognize this expression?
“Absolutely. My land has taught me to be extremely direct. Romagnolos are genuine, they say things as they are, which is my forte; people are no longer accustomed to honesty, so by saying simple things, nothing more than the truth, they are surprised. Therefore, I win people over.”
The dream takes us directly to Federico Fellini. YOOX NET-A-PORTER sponsored the restoration of Amarcord.
"Steve Jobs and Fellini were instrumental in my profession, but if I had to choose between the two, I'd bet on Fellini. Jobs invented the iPhone and we sell more than $1 billion via mobile, so I thank him. But Fellini is imaginative, a dreamer.”
Your last dream?
“Dreams are daily, mine always revolve around the customer: what to do to offer an increasingly beautiful and new experience. Because the point isn’t just to sell products, but also experiences. I have always believed in the complementarity between human touch and technology. The name YOOX comes from there: the man and woman chromosomes, Y and X, and the O which is the zero of the binary code or the DNA of the internet. So, the DNA of technology enclosed by that of man and woman, a philosophical principle that I immediately elaborated on in 1999, which continues to be our reference.”
Why did you want to work at Walt Disney after graduating from Bocconi and an MBA from Columbia Business School?
“It’s a great company. And the idea of collaborating with American film industries intrigued me. In New York, I really liked the course on media and cinema. I had even tried to write two screenplays; one was very close to the Matrix, albeit with a touch of Fellini, between conceptual and science fiction, not particularly successful anyway.”
But you chose to work between luxury and technology.
“I am a merchant and at the same time a person of entertainment. Just look at what we do with our content, from the article on the print magazine Porter to the Christmas video. I have always been attentive to the media. People tend to categorise me just as a businessman. However, even though it takes a back seat, in my mind the creative part is sometimes dominant.”
About movies. What did you watch interesting lately?
"Once upon a time in Hollywood. Beautiful the ending, Tarantino turned out to be the usual genius. Then I also liked the costumes that were curated by my friend, Arianne Philips. She was the one who curated a selection of pieces on YOOX during the restoration of Amarcord.”
Philips, you mean, Madonna's stylist?
"Yes. I met her two weeks ago in California, at the Tech Live, the Wall Street Journal's technology event’s dinner where Walt Disney was also present.”
"Bob Iger was also there, the legendary CEO who bought Jobs' Pixar."
Did you tell him the story about your CV which ended up in the trash?
“On seeing him, I admit that my mind went back to that moment, but I didn’t talk about it. It would have been too melancholic. I had more important things to ask him."
Dinners with Demi Moore, with the Silicon gurus and the world's top companies. Familiarity with the Royals of England. What is your relationship with high society?
“I am not much of a socialite. Usually, I prefer dinner at home. The fact remains that, whether for work, or for an actual interest, I like being with people. But I would not be able to have a life in which I was asked to entertain people every day. During my holidays, I do what really interests me, which I consider a luxury.”
A confidentiality that reminds us of another great Italian, Giorgio Armani.
"A giant compared to me. Armani was one of the first to believe in YOOX. I have great respect for him, a respect that borders on worship. He is one of the greatest, if not the greatest.”
We saw you with Marc Raibert of Boston Dynamics. Brilliant, true. But always with those Hawaiian shirts, even in Boston.
"It's his trademark, but I told him: Why don't you try going on Yoox and Mr Porter? You will surely find something matching your tastes”.
After the state exam, you left Ravenna for Milan bypassing the nearest Bologna. Ambitious.
"All my friends had chosen Bologna, so for me it was a quantum leap: the provincial guy that ends up in the big city. I wanted to lay the foundations for becoming a good entrepreneur and it seemed to me that Bocconi was the most fitting university to do so. It should be added that I was attracted to the idea of being in a metropolis. I was a studious boy, graduated with honours in four years, and yet I made the most of my time in the city, going to concerts, exhibitions, parties. I wanted to absorb everything, I didn't want to limit myself to academic growth”.
The same leap was replicated with New York.
“At one point, in Milan, I felt perfectly at ease. It was therefore time to think about the next step. And where could I learn even more of how the world works, better than in New York? I wanted to learn from the city, to understand the dynamics of retail, the philosophy of shops. So, it was Columbia University and home in Soho, Manhattan”.
How did you get to Yoox?
“At Columbia I had already put together a business plan for the entrepreneurship course. I had designed Mediterranea: a slow food in a fast food environment. But I soon discovered that this was not my passion. At that point I analysed my ‘Italianness’ and concluded: if not food, it is fashion. I decided to start from Italianness, where we are more competitive, without neglecting the fact that by playing on this, I could have returned to Italy”.
If you would’ve stayed in the US, you wouldn’t have founded YOOX?
“That's right, and for a series of reasons- due to lack of cultural closeness and sensitivity to understand the client, for the diversity of the language. In this sense, Italy has played a positive role".
And on the digital front?
"Here, Italy suffers the problem of the “small”. And this is demonstrated by the fact that YOOX NET-A-PORTER is the only unicorn in our country and that there are no Italians at the Silicon (Valley) forums except me. It makes me sad".
What's the problem?
“I would start with access to capital. YOOX was launched with 20 million euros. Now in Silicon, it starts from a minimum of 20 billion. I had the luck, skill and right timing on my side: being the first, the money was enough. But you can’t compromise on quality in the digital world. Technology is the great revolution; all the capitals are converging there. Unfortunately, in Italy there is no culture of venture capital and without large capital it remains small. A big limit”.
The meeting with Elserino Piol was decisive. Correct?
"When I started, there were very few and the only good venture capitalist was Elserino. He was a very elegant gentleman with me, he immediately understood the opportunity".
Are you still in touch?
"I went to see him three weeks ago. I took my daughter because she was curious about hearing the story of Dad knocking at various doors that remain closed, while Piol decides to bet on me. He is always very lively. He will turn 88 on December 7th”.
What suggestion do you give to young "startuppers"?
"Don't just think about Italy. Or better. Italy can be a strong point, but it is not the only market".
Let's go back to the Italian limit of "small is beautiful".
“A little company struggles, it’s fragile. A large company is more invincible, the size is crucial for survival. I had 100% of YOOX, after the enlargement I got to 4% because it is better to have 4% of a large leading company in the world than 100% of something small. But this approach does not fit in with the culture of Italian capitalism that aspires to control by 51% and is based on family ownership. That kind of approach does not work in digital."
In which direction will shopping go in the next five years?
"Five? Let's do three. The maximum horizon for digital is the three-year period. We’re accelerating on everything that is mobile, therefore iPhone (iOS) and Android. We make more than a billion dollars in sales via mobile. We managed to sell $140,000 worth of watches via Whatsapp. Through whatsapp, I even finalised the joint venture with our partner Alabbar.”
Mohamed Alabbar, the owner of the Dubai Mall?
"Yes. In the final phase the two teams needed some help, we intervened, and we closed the deal.”
What kind of family did you have? What was the watchword in the Marchetti house?
"Honesty. When I left home, my mum did nothing but repeat: be honest. At a certain point I couldn't take it anymore, but then I realised that certain values assimilated during childhood remain forever. Dad was a tireless worker, he was a warehouseman at Fiat in Ravenna, he wasn't a Marchionne, but he interpreted his work with a great seriousness. At Christmas, he would take us to the mountains, but he would return immediately to take care of the inventory. He passed away two years ago. At the funeral I met his former colleagues, and they told me stories I didn't know and ways of doing things in which I felt reflected, and I had never realised that."
"They explained to me that he always defended the people who worked on his team. He took the blame, leaving his merits to others. I also strongly defend those who work with me; I’m the one who usually negotiates with shareholders the end of year bonuses for my people. When things don't work it's my fault, when they do well, I say it's the team.”
Originally published on il Giornale