NEW YORK, United States — By and large, the entrepreneurs behind the first wave of fashion e-commerce companies started off with a simple goal: prove the industry wrong by showing that consumers would actually buy clothing and accessories online. Out of their contrarian beliefs and dogged tenacity emerged companies like Net-a-Porter and Yoox, both of which now rank amongst the world’s most successful fashion retail businesses, online or off. But if this first wave of fashion e-commerce was largely about bringing offline shopping online and leveraging the web’s phenomenal distribution opportunities, the next wave is all about the rise of ‘net native’ models.
"Taking the offline model for something and porting it to the web is not often the best way to build a business online,” explains Fred Wilson, managing partner of Union Square Ventures. “What we have seen over and over again is that taking a model that was optimised for the analogue world and porting it to the Internet is almost always suboptimal. And that the person or team that finds the optimal model for the Internet is almost always the one who ends up with the big win.”
In search of web-optimal models, a growing number of companies are rethinking e-commerce from the ground up in ways that were physically impossible in the offline world. For these companies, the Internet is no longer just a channel, it’s a fully fledged medium. And indeed, they understand that today’s fashion consumers, who have seen net native models transform industries like travel and music, are hungry for better ways to shop.
Farfetch, for example, is an online marketplace that offers consumers access to many of the world’s top fashion boutiques, all under one roof, something that is inconceivable in the physical world. My own company Lyst does a similar thing for brands and department stores.
Another emerging net native model is personalisation, which is something that Lyst offers as well. Much like Twitter allows users to create a personalised newsfeed, Lyst allows consumers to create their own shopping feed by following their favourite fashion brands, stores and people. Just imagine every single customer in the world being able to walk into their very own personalised brick-and-mortar store. Again, impossible. As is the idea of magazines that contain shops. Yet the commerce-meets-content model first pioneered by Net-a-Porter and picked up by the likes of Refinery29 and Harper’s Bazaar does just that.
If the first phase of fashion e-commerce was to change the mindset of a generation and bring online shopping to the mass market, today, the challenge is how to harness the web to rethink the shopping experience around the most effective and engaging ways to discover and buy, free from the constraints of the offline world.
Jeff Bezos, the far-seeing founder of Amazon, is fond of constantly reminding shareholders that it’s still “day one” for both his company and e-commerce at large. If that’s true for Amazon and ‘commodity e-commerce,’ then it’s certainly true for the kind of ‘emotional commerce’ that’s finally taking root in the far less mature online fashion space.
Net native concepts can emerge in-house at established fashion companies with innovation in their DNA, like Net-a-Porter, for example. Many fashion retailers may find it hard to develop net native models themselves, however, in which case, acquisitions and partnerships can be an effective route.
What’s abundantly clear is that, as e-commerce becomes untethered from the legacy of the physical store, the inevitable shift to net native models will fundamentally change the way people shop. And, as is often the case with major disruptions, those slow to adopt new models are not going to make it. However, those who make it a priority to develop new net native models, will, as Wilson says, end up with the big win.
Chris Morton is the founder and CEO of Lyst.
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