Monday, April 10, 2017

VALENTINO TEAMS WITH YOOX WITH E-COMMERCE SUPPLY CHAIN

Good idea. Can they develop and implement the supply chain to make it work?


Valentino Teams With Yoox to Offer More Choice of Luxury Online

Online customers will be able to order any Valentino product, whether it sits on the shelves of a Valentino store or in a Yoox Net-a-Porter distribution center

Models present creations by Italian designer Pierpaolo Piccioli as part of his Haute Couture Spring/Summer 2017 collection for fashion house Valentino in Paris, Jan. 25.
Models present creations by Italian designer Pierpaolo Piccioli as part of his Haute Couture Spring/Summer 2017 collection for fashion house Valentino in Paris, Jan. 25. Photo: gonzalo fuentes/Reuters
PARIS— Yoox YXOXF 1.00% Net-a-Porter Group SpA, the online luxury retailer, has entered a partnership with Valentino SpA aimed at overhauling the way luxury companies do business over the internet, YNAP executives said.
Under the partnership, YNAP and Valentino have integrated their inventory management, logistics and distribution systems, to augment the website that YNAP already operates for Valentino’s luxury clothing. That will give customers who shop online the ability to order any Valentino product, whether it sits on the shelves of a Valentino store or in a YNAP distribution center, YNAP executives said.
The arrangement is supposed to eliminate logistical problems that have slowed the luxury industry’s efforts to sell online. Shopping for luxury brands on the internet can be frustrating for customers, since online retailers such as YNAP often have a relatively limited amount of product in inventory ready for delivery.
“With this model, we are going to expand the online sales of the brand,” said YNAP Chief Executive Federico Marchetti. “Customers are going to have access to more products, and they are going to get them faster.”
That intention in some ways runs counter to tradition in the luxury world, where inventory management has long been used to cultivate an image of scarcity. Herm├Ęs International SCA, for example, has long daily lines in front of its main Paris store because certain bags are hard to find elsewhere. But sluggish global growth, especially a downturn in China and Hong Kong, has luxury companies looking harder at ways to boost sales.
The chance to attract new, younger customers also has big-name luxury companies abandoning their resistance to selling online, which many had feared would damage their brands’ prestige.
Mr. Marchetti said the company is working on similar arrangements with other luxury brands whose online stores YNAP already runs. The company, which specializes in selling luxury brands online, manages the websites of most of Kering SA’s brands—including Saint Laurent and Bottega Veneta—among many others.
The partnership represents the culmination of a major capital investment to establish a single order-management system, designed by International Business Machines Corp. , that will oversee the movement of Valentino products across the Italian company’s own networks and those of YNAP. Once an order is made online, the system will automatically pick which store or distribution center is best placed to supply the delivery.
“When it’s very simple for the customer,” Mr. Marchetti said, “it’s very complicated behind the scenes.”
YNAP has benefited from a luxury clientele that has grown increasingly comfortable buying high-end products online. Sales last year rose 12.4% to €1.9 billion ($2 billion).
Write to Matthew Dalton at Matthew.Dalton@wsj.com