TheOutnet.com: A New Way of Looking At Last Season's Fashion

As a former New Yorker, I can tell you that there are few experiences more disheartening than the average New York designer sample sale: the long lines, the communal dressing room, the anti-social behavior and the general presentation of the merchandise is enough to put off even the most dedicated follower of fashion. It would be difficult not to come away from the experience with a diminished view of the brand in question and fashion generally. Under these circumstances, even the most beautiful garments tend to lose their appeal.

Luckily for the industry, the Internet is proving fertile ground for creative and innovative businesses specialized in the sale of discounted fashion. In fact, these businesses are currently all the rage: Gilt Group, Rue La La, Vente Privee and of course, theOutnet.com launched last Spring by the team behind Net-A-Porter. Stephanie Phair, theOutnet.com's director graciously agreed to sit down with me and discuss the business of discount fashion and how the Internet is helping to forge new attitudes towards last season's fashion.

1. Is theOutnet.com an outlet exclusively for Net-A-Porter over stock or do you also accept over stock directly from the brands themselves?

Even before theOutnet.com was launched, Net-A-Porter had always had a "Sale" section where customers could browse through items that had been marked down. Once theOutnet.com was launched, we took over that aspect of the business. However, we anticipate that over the next few years, the percentage of merchandise will surpass the outlet aspect of the business.

We've already made quite a bit of progress in that direction. For instance, theOutnet.com now offers beautiful Azzedine Alaia shoes and handbags and we've recently introduced archival pieces from 10 Corso Como, the influential Milan-based multi-brand boutique founded by Carla Sozzani. This includes truly beautiful pieces from Alaia, Balenciaga, Bottega Veneta, Bruno Frisoni, Charles Anastase, Christopher Kane, MM6 by Maison Martin Margiela, Marni and Prada all available at discounts of up to 50% off.

2. Many online discount sites have opted for a private membership or "upon invitation only" model whereas theOutnet.com is open to all. What is the reasoning behind this?

The underlying philosophy of Net-A-Porter is one of global distribution and access to all the best fashion. The Internet is by its nature a very democratic place so the "no-invite", twenty-four hour access model just made more sense to us than the private membership model which mirrors the bricks and mortar approach to discount selling.

3. Luxury brands are usually very reluctant to offer discounted prices hence the tradition of liquidating excess stock via discreet sample sales (and probably the reason why some of your competitors adopted an "upon invitation only" model). What was the response of designer brands when you first approached them about theOutnet.com?

Brands have confidence in Net-A-Porter and so I think there was a sense that if any online e-tailer could pull this venture off it was Net-A-Porter. So certainly, there have been benefits to having Net-A-Porter as a parent. However, the discount world is an ultra-competitive one and theOutnet.com has to forge its own path.

4. Are there still designers holding out? If so, which ones and why?

Not any designer brands we're pursuing at the moment. In fact, theOutnet.com has received tremendous support from the brands generally. They trust that we will edit the selection and present the merchandise in a way that respects the image of the brand. Also, at a time when any customer is a paying customer, brands understand that the time is right. They understand that they need to look at their image throughout the entire sales cycle.

5. The current success of discounted luxury sites is generally attributed to two factors:

- The sudden and sharp decline left retailers with a great deal of high-quality excess stock and so the selection of merchandise on these sites is very appealing;

- The downturn has left many consumers with less discretionary income than they normally might have making discounted fashion more attractive than it once might have been.

Are there possibly other factors that might account for the popularity of such sites?

Nathalie and the team at Net-A-Porter had conceived of the idea for theOutnet.com before the recession. As mentioned previously, Net-A-Porter had had a "Sale" section on its site for almost 9 years and Nathalie felt that the time had come to separate the two.

We see discount fashion as part of a natural progression: vintage, mixing high/low pieces, etc. No one wants to be slaves to trends. Our customers for instance are very fashion-savvy and aren't afraid to mix and match but they're looking for value for money.

6. Do you think that online discount sites will still thrive once the economy starts growing again and consumers have more discretionary income to spend?

If any business was well-positioned to launch during a recession, it was ours. But, we're here to stay well beyond the recession. Once we come out of this difficult period, we can only grow because we have the best brands and the best products. We'll be a stronger business for it.

7. Is the customer shopping on theOutnet.com the same customer that's shopping on Net-A-Porter.com or is it a different customer altogether? Is there overlap in customer base?

I would say that it's a mix: 60% of our customers are new customers and the overlap with Net-A-Porter's customer base is very small. We've essentially found a different customer. Whereas the Net-A-Porter customer is very fashion-forward and eager to buy pieces straight off the runway, theOutnet.com customer is searching for good value. Our customers are quite fashion-savvy as well but tend to mix and match more.

8. You operate a New York-based site which serves North America and Latin America and a London-based international site that serves the rest of the world. Are there patterns of consumption emerging that are specific to each market? Are discount sites more popular in some cultures or markets than others?

The world of discount fashion is more developed in the United States. Discounts need to be higher there because expectations are different. In terms of trends, our European customers are slightly more experimental in their purchases whereas our U.S. customers tend to buy into classics. Of course, we've only been around for a little more than six months so it's still quite early.

9. One of the hallmarks of Net-A-Porter is its exceptional customer service. Is is possible to extend the same quality of service on a discount site given that your margins are smaller?

When the idea for theOutnet.com was conceived, the thinking around it began with the notion of service. How do we turn discount on its head? How do we change all the received wisdom about discount shopping? These are some of the questions we asked ourselves and which drive our decisions.

We currently offer two methods of shipping, ground and express and we have recyclable packaging but everything we offer is outlet appropriate. Amidst what we offer, it's at the highest standards of quality within the discount context.

10. Do you sense that sites such as the Outnet.com have the potential to shape consumers' attitudes towards fashion by perhaps placing the emphasis on quality and longevity rather than trends or seasonality?

Our view is that this is beautiful product and should be treated as such. We edit our selection very carefully and offer the best of previous seasons. We spend a considerable amount of time merchandising because it's very important for us to be able to put together complete looks from the various brands we offer.

11. What do you see as your 2 or 3 biggest challenges going forward?

Our first challenge is growing fast enough to do all the projects we want to do. It's all about resources. This is a very fast-paced environment - its less about keeping up than remaining ahead of the game. Another big challenge for us is access to product. To date we've gotten the best products and we want to continue to get the best products.

12. Thank you for taking the time to speak to me about theOutnet.com.

It was a pleasure. Thank you.

For more information about theOutnet.com and their policies or to view their beautiful products, please visit theOutnet.com

Sincerely,

The Luxe Chronicles

Comments

[Helene]

Thanks Dahlia - yes, I did notice the video. It's a great way to discover the products.

I really think that the team of people behind Net-A-Porter and theOutnet.com are revolutionizing the fashion industry from the inside out. The fact that theOutnet.com managed to win over Azzedine Alaia who is notoriously strict where the discounting of his collections is concerned speaks volumes for the faith the industry places in the Net-A-Porter brand and by extension theOutnet.com. More power to them!

I'm gad you enjoyed the interview.

Helene

[Dahlia]

Great interview Helene. It's interesting to see that The Outnet is aware that the internet is indeed a very democratic place for fashion.

Did you also notice how Net-a-porter now has video for certain outfits? So simple, yet brilliant idea.

Cheers