Mr YOOX NET-A-PORTER
by Federico Sarica, March, 2016
Photograph by Nikolai Von Bismarck.
“Anyone who has worked with him – they say – has always had to know that ideas can even appear at four o’clock in the morning, and so you need to be ready if your telephone rings in the middle of the night.” Massimo Sideri – Corriere della Serra
As Federico Marchetti recently said in the Financial Times, when we talk about Yoox and Net-à-Porter, we are fundamentally talking about “two businesses that started at exactly the same time, with the same, identical vision, but two completely different approaches. We started with the end of season and they started with full price. Then we launched the monobrand sites, because we were strong in logistics, and they launched editorial content, because they were very good at marketing. It’s incredible, as if it had all been planned out. I don’t think there’s ever been a merger that was so perfect on paper.” A fusion of two visions that have been around for the same amount of time and that have ended by coming together to give birth to the biggest e-commerce company in the world that is dedicated to fashion. A group with more than 3,500 employees, who in its final form can count four multibrand sites and more than 40 monobrand sites. A colossus guided by the person who truly wanted the merger and who had worked for a long time to make it happen, Federico Marchetti himself, who met with Studio on an afternoon at the end of February in his Milan office.
The first reflection that we shared with Marchetti has to do with his profile – that of an all-round innovator, one of the few Italians to have achieved global success – and with the grand scale of Yoox Net-à-Porter. Innovation in the start-up stage is a relatively logical and simple concept, a road well-travelled that transforms into a much more difficult game when you grow considerably. How can you continue to innovate in companies of this scale? “A big company can be small, and a small company can be big in terms of its internal mechanisms”, begins Marchetti, “As a company grows bigger, you don’t necessarily lose the sense of the people around you, nor your spirit or courage; it’s like a man who remains a child on the inside. Innovation is that propelling force that you have to have when you set a long-term goal for yourself and you want to keep heading towards it. If, however, you feel as though you’ve already arrived, it’s less present. That inner child is very important: he’s the one who thinks, ‘I’m still at the beginning of the story.’ There’s a sort of tradition in the corporate world according to which if you are the CEO, the number one, you talk directly to seven managers and then they take care of the rest. There are, however, other companies that prefer to remain agile in their structure in some way or another. This is the case for us: we are still how we were when there were ten of us, or fifty of us, and I knew everyone. I like working with everyone. I live like the child I mentioned before, continuing to be myself, regardless of the size of the company. It comes to me very naturally, I don’t know if it’s the right managerial style, but in my opinion it is this spirit of innovation: to continue to be children inside, to always think of the future and never about the present, let alone the past.”
Yoox Net-à-Porter has reached a turning point, with their first official results out in March and work on the five year plan underway since February. The challenges are many, and we asked Marchetti to single out the biggest one: “I’m convinced that we need to become a mobile only company; not mobile first but mobile only. I imagine that in five years’ time, 99% of our general business will take place via mobile channels, which currently already account for 60% of our traffic and 40% of our sales. Everything will revolve around smartphones – clients will enter the Valentino shop on Fifth Avenue in New York, for example, and then they’ll decide whether to buy something from the assortment that they see in person or from valentino.com on their mobile. I’ve asked my managers to start working and thinking most about mobile only right from the start: and that is the biggest challenge.” In his new book The Industries of the Future (which we talk about in the following pages), Alex Ross writes that in the agricultural era, the raw material was the earth; during the industrial era, it was iron; and in this so-called information age, it’s data. Does Marchetti agree? “Yes. During the three days of preparing the five year plan, which were very exciting for us because for the first time the two companies not only worked together but also decided how we want to see ourselves from today onwards. We obviously invited the person who is in charge of Big Data to the team, he is an English guy who is very well informed and capable. His work now is to construct the foundations for the future, and on this we completely agree that in terms of data, for us, we need to optimise the processes and to understand what it is that our customers want, as well as for our relationships with the brands, we’re not even using one percent of our existing potential.”
At this point the conversation slides onto the theme of Italianness, the relationship between our Country and technological innovation, onto the possibility of recreating Italian culture, picking up again from a certain national genius that has marked the history of humanity and which at times seems to have been lost. (Here we begin talking about Leonardo, and we tell Marchetti that Walter Isaacson, the celebrated biographer of Steve Jobs, is writing a book about Leonardo Da Vinci, and so it seems he will pass some time in Italy. Marchetti lights up and says that Isaacson must be taken to visit a special place, and then talks about the nth YNAP project born of his personal love: supporting and collaborating with the Pinacoteca Ambrosiana in Milan, where countless works of Leonardo’s are housed, including the Codex Atlanticus, adding, “it’s like a second home for us, a wonderful place full of inspiration”. And then it went on: fashion, design, Made in Italy, and how many times during his global ascent and about being born and raised in Italy. “It’s definitely been a competitive advantage,” reflected Marchetti, “that we’ve tried to use for the best in terms of our cultural proximity to the fashion brands: I’ve always thought it would be difficult for an American from Silicon Valley to sit down at a table with Mr Armani, for example, and make himself understood. From this point of view, definitely, being Italian has helped a huge amount. There have also been many disadvantages, because if you are that American from Silicon Valley, on the other hand, you have the possibility of working with the best tech talents, of breathing a different air, of having access to capital with great ease. Here, in these matters, it’s exactly the opposite. I’ve always asked myself what the balance was, and I’ve always found the answer to be positive. We wouldn’t be where we are today if we weren’t born here. In terms of the Italian culture, it’s definitely a breath of fresh air, no longer stale, and that’s already something. Whether we’ll make it or not, we don’t know yet, but there’s an objective will to change that represents a starting point for the future. While I have great faith in the Italian genius and consider it truly at a high level when applied to creativity, it’s a different story when it comes to technology: I believe that many Italians who develop avant-garde technology will continue to do so in other countries, particularly in terms of access to capital which is much more developed elsewhere. We need to implement and encourage a system of venture capitalism which until now we haven’t even begun to perceive. When I started, it felt like a miracle to have found the only Italian venture capitalist at the time. But they are isolated cases because the structure is missing; it can’t be commercial banks, it can’t be the government, it can’t be angels or families that finance technological projects. Yoox was founded with 3 billion lire, sixteen years ago. Companies that are somewhat comparable were financed with 750 million dollars just three years ago. It’s clear that a genius idea can jump out at you and be realised with just a few thousand lire, but a system is a whole other thing.” Which is to say, Yoox Net-à-Porter is an exception, a stunning exception. The mission is to become the rule.
Originally published in Studio.