The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
LONDON, United Kingdom — In 2015, Condé Nast revealed its plan to transform Style.com into a global e-commerce player, folding the site's editorial coverage into the fast-growing American Vogue.com. Condé Nast is investing $100 million into the venture and has described the move as involving unprecedented cooperation between the company's US and international arms, underscoring the scale of the ambition.
But the luxury e-commerce space is highly competitive and crowded with a wide range of players, from department store incumbents like Neiman Marcus to traditional e-tailers like Yoox Net-a-Porter and platform players like Farfetch. Condé Nast sees its advantage in its ability to integrate content and commerce, harvesting the purchase intent generated by its hundreds of style-focused media titles with a seamless path between inspiration and transaction. The new Style.com employs a marketplace model, providing a platform for brands and shoppers to connect, without taking on the risk and expense of buying and holding inventory. But the company has also begun carrying stock and, according to sources, may yet pivot its approach.
Originally, the new Style.com was scheduled to launch in the UK last autumn, followed by a debut in the US in early 2016. But the project was delayed more than once and the UK site was finally unveiled on September 2nd, with a US rollout expected to follow later this year. Ultimately, Style.com aims to target the full global audience of Condé Nast’s media brands — a potential customer base of roughly 300 million people, according to the company — who will be able to shop directly from editorial content, using what Style.com calls its “shopping layer.”
Franck Zayan, president of Style.com | Source: Courtesy
But e-commerce is outside Condé Nast's core competency. And since the UK launch of Style.com, many have questioned both its underlying business model and execution, noting the number of major brands missing from the platform. While there has been no shortage of upbeat coverage on the launch, a scathing piece in The Sunday Times, which was widely circulated in the industry, declared: "Vogue's attempt to join the online shopping club falls flat."
BoF spoke to Style.com president Franck Zayan, previously head of e-commerce at French department store Galeries Lafayette, to learn more and provide a balanced view on the venture.
BoF: Let’s start at the beginning. Why did Condé Nast decide to reinvent Style.com as an e-commerce site? What is the opportunity that you see?
Franck Zayan: All publishers have been looking at e-commerce, probably for three to five years. Some of them have done things to tick the e-commerce box. But Condé Nast has a very different approach. It’s a family-owned company that builds businesses for the long-term. The goal is to build a new sustainable source of revenue, leveraging our global assets. Condé Nast’s media brands have great authority. We are a powerful producer of inspiration. What we’re doing now is building a connection between inspiration and transaction. A lot of pure e-commerce players are creating content, but we already have the content — the best content in the world in fashion and lifestyle.
BoF: Can you break down the business model?
FZ: We are building a marketplace online, where brands and their product information are basically connected to our platform. We handle the entire customer journey, including customer care after the transaction, while fulfilment is done by the brands. That’s the core of our model. Though we have also added an inventory model, because some of the brands, especially luxury brands, do not have an efficient enough e-commerce proposition. So we store a few brands. At the moment, it’s 80 percent marketplace, but the inventory model might grow as we get new brands, which do not yet have an efficient enough e-commerce platform.
BoF: Originally, the UK site was meant to launch in the autumn of 2015, with the US to follow in early 2016. Why the delay?
FZ: The US website will be open before the end of the year. Remember, we are working on a very long-term project. We are building something that needs to be a sustainable business for decades. We wanted to make sure that we’d launch with something that makes sense. It’s been a process. Remember, before us, there was no e-commerce team within Condé Nast. When I started, I was all by myself.
BoF: The luxury e-commerce space is highly competitive. What gives Style.com an edge?
FZ: First of all, it’s a space that is still growing and will grow significantly over the next six to seven years. So the size of the overall cake is getting bigger. Now, that being said, going out there with exactly the same platform as everyone else is not enough. We are building a position that stands on three pillars.
The new Style.com e-commerce site | Source: Courtesy
Number one is the incredible content we can leverage from brands like Vogue and GQ, which is very different from just saying we have content. Those brands carry incredible weight in the market. The product assortment is also part of it. We decided to position ourselves with big emblematic fashion brands as well as rising stars, new designers, new names. And, thirdly, there’s the technology piece. We’re not here to build a basic catalogue of products. We are here to build a sustainable proposition for customers that relies on recommendations and personalisation.
We have an entire artificial intelligence team here, because the product assortment we show people needs to be relevant to them and what they are reading. We are just starting. Some might see that as a disadvantage, but I see it as an incredible advantage, because we are not stuck with any kind of legacy system.
BoF: Fashion is quite a complex market, where subtle differences between products can make a huge difference and the “rules” are always changing. How does your recommendation engine manage this complexity?
FZ: What’s really important is combining technology with human expertise. When we do image recognition, it’s very good at looking at patterns, textures, colours. But if you’re missing human expertise, you will always fall short — at least for now. We have a product team that is very much fashion-oriented. The recommendation engine is built by statisticians and PhDs in astrophysics. But it’s critical to bring them together with a product team that defines the requirements, the rules of brand adjacency, meaningful product tagging and so forth, so that the algorithm learns as it goes along. It’s the only way!
BoF: How are you integrating with Condé Nast’s titles?
FZ: Connecting content from the titles to Style.com — that’s what we call the shopping layer. Today, we’re focused on fashion, so it’s not that difficult. It’s GQ and Vogue in the UK for now. It will be a bit more challenging when we add other titles and other markets. The point is to build a lifestyle connection, so it has to be fashion, accessories and beauty, as well as luxury destinations, high-end technology. When we started thinking about how we can do that efficiently, there were a few prerequisites. When you go to a content website, you go there to consume content. If we take you somewhere else, it doesn’t make sense. We wanted to build something as seamless and unobtrusive as possible, so when you are done looking at a product, you can very easily go back to reading articles.
BoF: Condé Nast has made investments in a number of luxury e-commerce players, including Farfetch. The company must have learned from these.
FZ: These were made by Jonathan Newhouse before this project. But there were essentially two purposes. One was purely financial, because Condé Nast has its investment arm. The second was to better understand the space, the market, the people, the environment. It made a lot of sense.
BoF: Farfetch has a robust omnichannel strategy. As much as online sales are growing, people still like to touch and feel and try things on.
FZ: With our marketplace model, the brand manages the fulfilment of the product. But no one says the product has to go through postal delivery. If a brand has the ability to deliver a product in-store and wants do it, then you might very well buy a product from Style.com and pick it up in the store. Ten years ago, people would go into a store, interact with the people there and come out of the store with or without a product. Today, things are different. People buy a magazine, they get inspiration, they go online, they find a product, they eventually try or don’t try it on, buy it, receive it at home, return it to a store if they don’t want to keep it. The journey has completely changed. And that’s exactly what we’re building: a platform that takes into account all these touch points with customers, and goes from the webpages of a magazine all the way to the store.
BoF: Have there been challenges getting brands on board? There are many major brands missing from the site. For example, there are no LVMH brands.
FZ: A lot of luxury brands, in general, they don’t look at themselves as front-runners. They’re not innovators when it comes to technology. They tend to focus more on their products and the power of their brands. We’ve been talking to a lot of the luxury brands and they have very recently started their process of becoming more mature when it comes to digital and e-commerce. Most of them are not yet at that tipping point where [online sales] start to represent something that is considerable enough. A lot of them are just coming to that point. So we will see, very soon, a lot of luxury brands moving faster into this space.
BoF: They’re also focused on their own direct-to-consumer channels.
FZ: Yes, they are. But all these brands also have extensive and long-lasting relationships with Condé Nast. So if we were a pure play start-up coming out of nowhere, I honestly think that we would have a lot more difficulty. But because they know Condé Nast and they know what Condé Nast stands for, it makes it easier for them and for us to connect. All of this is a process. I’m convinced this process with most of these brands will end up in a partnership, because Condé Nast and Style.com are very much complimentary to what they have.
BoF: How are you working with retailers like Colette?
FZ: We’re not working with retailers in general, we’re working with Colette. Colette is the only non-brand partner we’ve chosen to work with because it’s more than just a retailer. It offers a powerful and curated assortment and it’s a brand of its own.
BoF: It’s only been a few weeks since launch. But how are things going?
FZ: It’s been going quite well, to be honest. The metrics we follow are fairly common for a commerce site: traffic, sales, conversion, engagement, etcetera. We also follow very closely how readers from the Vogue and GQ websites use our shopping layer. Though we don’t communicate figures, I can say we’re very happy and excited by what we see thus far.
Expectations? While e-tailers like Net-a-Porter are creating magazine-like content of their own, Condé Nast has built some of the world's glossiest and most popular media brands. How exactly the company would harness the power of these titles to propel its e-commerce play was perhaps the most anticipated piece of the Style.com strategy. With Condé Nast said to be investing $100 million over the first four years of the venture — more than what the company typically spends to launch a new magazine — it's fair to say expectations were high.
First impressions? For a first iteration product, the new Style.com is relatively slick and easy to use — if a little bland. Where is the emotional charge conjured so well by Condé Nast's media properties? Compared side-by-side with Net-a-Porter, the site's product pages are missing features like zoom and video. It's also immediately apparent that many major luxury brands are missing from the site.
The “shopping layer,” which is currently deployed on the UK websites of Vogue and GQ, is promising, however, and Zayan and his team can take credit for developing a reasonably frictionless experience. Yet the feature is not without faults. On the British Vogue website, triggering the “shopping layer” pulls up a catalogue-like, full-page panel that features all the products associated with a given story, while obscuring the editorial that was, presumably, the original driver of desire.
Most potential? While celebrities and digital influencers are challenging the power of traditional media brands, Condé Nast's titles remain huge generators of purchase intent for fashion and lifestyle products in markets around the world. If the new Style.com can efficiently and seamlessly harness its parent company's portfolio, it can offer brands a potent marketing weapon that competitors don't have. According to data from SimilarWeb, a digital market intelligence service whose data is imperfect but directionally accurate, the UK websites of Vogue and GQ are amongst the top drivers of traffic to Style.com, suggesting the potential of its underlying content-meets-commerce strategy.
That said, Style.com only nets about 677,000 visits per month, significantly less than Net-a-Porter’s 5.2 million visits per month or Yoox.com’s 9.8 million visits per month, according to SimilarWeb. Condé Nast’s decision to maintain “church and state” separation between Style.com and its media brands may also be putting the venture at a disadvantage compared to competitors where the creation of media content is closely coordinated with merchandise.
What's missing? There is no avoiding the fact that Style.com currently has a very limited brand and product offering. Since launch, Style.com has plugged some of the holes in its assortment, adding megabrands like Gucci and Burberry, yet these brands are only available via the site's partnership with Colette. As a result, Style.com sells only 70 products from Gucci, while Net-a-Porter sells over 380. Last September, Anna Wintour joined the board of Style.com and is said to have helped facilitate conversations with brands. Yet many of the industry's top luxury labels are nowhere to be found. Particularly glaring is the absence of any brands owned by LVMH, the world's largest luxury conglomerate.
This may be part of the reason why the average duration of a visit to the site is only 1 minute and 3 seconds, while the average number of pages viewed per visit is just 1.86, according to data from SimilarWeb. These numbers put Style.com well behind Net-a-Porter, for example, where the average duration of a visit is 5 minutes and the average number of pages viewed per visit is 6.95, or Farfetch, where the average duration of a visit is 3 minutes and 46 seconds and the average number of pages viewed per visit is 4.63.
What’s more, Style.com has yet to launch in the US, the world’s largest retail market, though this hasn’t stopped Americans from trying to visit the site. According to SimilarWeb, 20.91 percent of traffic to Style.com comes from the US, but thus far these visitors have been served only a basic holding page. Net-a-Porter, by contrast, was global from the start and now ships to 170 countries.
Over time, Style.com aims to target the full global audience of Condé Nast’s media titles with shopable content. But operationalising this across the company’s entire editorial portfolio — which is fragmented by brand and geography and not collected together in one platform — is easier said than done. Thus far, Style.com’s “shopping layer” works only on the UK websites of Vogue and GQ, which each attract about 1.9 million monthly unique users, according to metrics published by Condé Nast, a small fraction of the media giant’s total audience.
But perhaps most importantly, many of the world’s top luxury brands are currently in the midst of reevaluating their relationships with third-party distributors and shifting their strategies towards direct-to-consumer channels, where the margins are higher and they have more control over brand experience and customer data. Style.com’s business model appears to be out of sync with this prevailing reorientation. The site is yet another middleman taking a hefty commission, reported to be around 30 percent, while shifting inventory risk and the logistical hassle of shipping and returns to brands.
Overall, while the new Style.com may have been a competitive proposition in the luxury e-commerce marketplace of five years ago, in today’s landscape, it may struggle to secure a strong position without significantly revamping its product assortment and underlying business model.
This interview has been edited and condensed.