The Yoox Net-a-Porter technology hub will focus on artificial intelligence, augmented reality “try on” services and as well as streamlining its logistics and delivery systems. The company is expected to hire at least 100 new IT staff over the next two years.
The new technology hub will bring together the UK teams of Italian luxury online store Yoox, and luxury fashion e-commerce platform Net-a-Porter, which merged back in 2015. The building where the team currently resides is located in west London’s White City, and currently houses 500 IT staff, however it can fit a capacity of up to 650 IT experts.
Yoox Net-a-Porter (YNAP) says it aims to double the size of its business by 2020, and as such plans to invest over $750 million in technology, warehouses and delivery systems in London.
YNAP’s new tech hub will focus on developing artificial intelligence that can assist Net-a-Porter personal shoppers to provide more appealing ideas for its “big-spender” clients, as well as develop the next wave of technology for consumers using their smartphones to shop. The company says they are also dabbling with a new augmented reality service, one that will allow its shoppers to “virtually try on” accessories like handbags, sunglasses or jewellery.
Federico Marchetti, founder and chief executive of YNAP, told the Guardian that his team would not, however, be prioritising ways for shoppers to try things on virtually, as he believes that YNAP’s shoppers prefer services that allow them to physically try on items and return them easily, such as its “You Try, We Wait” service it trialled in China and London, which will be fully rolled out in the UK in September this year. The premium service is specifically available to Net-a-Porter’s high-spending customers, where uniformed “butlers” deliver a selection of items to the client, and waits while the customer tries the items on, before returning any unwanted goods.
Net-a-Porter will also roll out its personal shopper service it refers to as EIP – “extremely important persons” – in London later this year. While these big-spender shoppers make up only 2% of its total consumer base, they tally 40% of Net-a-Porter’s sales; it can generate hefty returns by serving these customers well.
Marchetti says he’s also on a mission to hire more female IT staff at YNAP; currently, its staff are 61% female, however females only represent 28% of its tech staff. He says that recruitment difficulties in hiring more female IT professionals has led the company to team up with Imperial College London, to lift the digital skills among local children, particularly girls.
YNAP is one of the world’s largest online luxury fashion retailers. The company reports an annual turnover of nearly $3 billion; it says about half of orders are made via mobile devices. On Monday, its share value jumped more than 8%, following reports that Chinese e-commerce giant, Alibaba, was considering buying a stake in it.
China currently presents an important growth point for luxury retailers, and a team-up with Alibaba would certainly help YNAP compete against rival, Farfetch, which recently paired up with China’s other dominant e-commerce group, JD.com.
Online luxury sales are expected to double as a proportion of the fashion market over the next five years, to 14%, and while YNAP faces competition from e-commerce luxury online stores like Farfetch and Mytheresa, the company looks like it’s riding the waves of changing consumer behaviour.
Marchetti told the Guardian that the two companies (Yoox and Net-a-Porter) were successful in merging its individual cultures, which has been able to sell $60,000 Valentino dresses via a smartphone and its $170,000 + watches and via Whatsapp.
“This is the first example of the luxury industry making such a big investment in tech. We have 1,000 engineers in London and Bologna. That’s something that no luxury brand in the world can have. We are the perfect merger of luxury and tech, that’s why we are serving the brands so well.”