Luxury Store Grows Online
By Cate T. Corcora
Net-a-porter founder Natalie Massenet.
For the first time since founding Net-a-porter five years ago, Natalie Massenet has time to weekend in her cottage outside London or in the south of France with her investment banker husband and their five-year-old daughter. Not so in the company's early years, when she stayed at the office all day Saturday and Sunday answering customer service calls.
Since it opened in June 2000, the London-based online designer boutique has doubled its revenues every year. Last year it posted profits of 227,000 pounds, or $409,404 at current exchange, on sales of 11.8 million pounds, or $21.3 million, and Massenet expects the business to double again this year. (If it does, Net-a-porter would be comparable in size to Jeffrey New York.) It also was voted "best shop" last year by the British Fashion Council, winning out against real-world stores owned by Matthew Williamson and Asprey.
Last year, Massenet added a chief executive officer, Mark Sebba, to her staff of about 120, which freed her to focus on fashion and marketing instead of operations. The business is currently growing by 15,000 customers a month, and Net-a-porter recently built a bigger distribution center in London to handle anticipated orders.
In the warehouse, handheld PCs are used to manage stock locations, and packing stations are equipped with computers and bar code readers. Last year, the company created its own software to track orders and individual stockkeeping units from receipt to dispatch. In the next six months, the company plans to replace its e-commerce software, Intershop 4, from Intershop Communications AG of Jena, Germany, with a custom application written in Java that will handle more traffic and allow Net-a-porter's merchandise to appear in Internet searches on Google.com and other search sites.
Every time the company adds a new brand, it acquires new customers, said Massenet. Otherwise, marketing has been largely through word of mouth and articles in the U.K. press.
A former editor at Tatler in London and W and WWD in the U.S. who grew up in Paris and Los Angeles, Massenet parlayed her editorial sensibility and fashion-world connections into a store that stands out among online retailers for its mix of editorial content and hard-to-find designer merchandise. Weekly articles present the latest trends, must-have items and ways to wear them. Net-a-porter's focus is on the kinds of sophisticated yet wearable clothes that are highlighted in magazines, but are often difficult to find in stores because they're considered "risky." The store recently added Miu Miu and Alexander McQueen to such standbys as Chloé, Marc Jacobs and Vanessa Bruno, and has an online exclusive to carry Burberry Prorsum.
"I think we had a very clear vision at the beginning of who our customer was," said Massenet. The Net-a-porter customer loves fashion and fashion magazines and has a high amount of disposable income. (The site's average order rings in at $800.) A recent survey revealed that she ranges in age from 18 to over 65.
The site emphasizes privacy, service and efficiency because those are important qualities for luxury customers, said Massenet. For instance, London dwellers get same-day delivery. Other customers receive packages overnight through DHL. Clients can preorder select merchandise, such as Chloé's Paddington bag. Personal shoppers operate much like sales associates in luxury stores, advising customers in advance about what will be available in six months, what the key pieces will be and making sure their clients have priority on coveted items.
Sixty percent of Net-a-porter's customer base is outside the U.K. The U.S. makes up 30 percent of the business; continental Europe, 15 percent; the Far East, 8 percent, and the Middle East, about 7 percent. Home-grown software calculates international taxes and duties for each of the 71 countries Net-a-porter ships to, so customers are not surprised when they receive their bill.
The site has close to 30,000 customers and 300,000 unique visitors every month. The weekly e-mail newsletter has about 250,000 subscribers.
Does Massenet have any plans to open real-world stores? Not yet. "With the introduction of the Internet and the ability to have one shop cater to the whole world, we're taking a niche market and making it into quite a sizable market because we're not dependent on foot traffic," she said.
Massenet said she believes retailers are still at the beginning of realizing the Internet's full potential. "We think everything they said about online is true. It's just taking a few more years than everybody thought."
