{"id":5565,"date":"2015-12-09T18:59:45","date_gmt":"2015-12-09T23:59:45","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/net-a-porter-bringing-luxury-online-and-around-the-world\/"},"modified":"2015-12-09T18:59:45","modified_gmt":"2015-12-09T23:59:45","slug":"net-a-porter-bringing-luxury-online-and-around-the-world","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/net-a-porter-bringing-luxury-online-and-around-the-world\/","title":{"rendered":"Net-a-Porter: Bringing Luxury Online and Around the World"},"content":{"rendered":"<p>Not many Internet companies can claim that they\u2019ve been around since 2000, let alone e-commerce businesses (did we even know what e-commerce was in 2000?).\u00a0 Natalie Massanet, magazine editor turned Internet entrepreneur, founded Net-a-Porter in 2000 in London with little institutional backing, only money from family and friends (2). What started as an idea to globalize the Pashmina trend (large scarves women use to wrap their shoulders) by selling them online (4) has become an e-commerce behemoth, with separate women\u2019s (Net-A-Porter) and men\u2019s (Mr. Porter) luxury full-price platforms, a discount platform (The Outnet), a fashion magazine (Porter), and a new fashion social netoworking platform (The Net-Set).<\/p>\n<p>Net-A-Porter generated \u00a354.2 million (about $82 million) of EBITDA in 2015, up 43% YoY, and has been EBITDA positive since 2012 (1). The site attracts nine million visitors per month and has up to 70,000 people shopping at any given time (4). It is a superb model of a tightly integrated business and operating model.<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong><u>Business Model <\/u><\/strong><\/p>\n<p>At its core, Net-A-Porter\u2019s business model is to sell full priced women\u2019s clothing. The vast majority of clothing and accessories sold on Net-A-Porter are in the luxury (Gucci, Oscar De La Renta) or \u201chigh street\u201d (A.P.C., Kenzo) segments \u2013 think bags selling for $2,000 or skirts selling for $750 or more.\u00a0 When Net-A-Porter started, operating in these segments presents a problem for e-tailers: with such a high price tag, customers expected to be able to try on clothing in a high-end store environment with superior customer service.<\/p>\n<p>&nbsp;<\/p>\n<figure id=\"attachment_5533\" aria-describedby=\"caption-attachment-5533\" style=\"width: 264px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/net-a-porter.png\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-5533\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/net-a-porter-300x169.png\" alt=\"Purchase Page\" width=\"264\" height=\"149\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/net-a-porter-300x169.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/net-a-porter-600x337.png 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/net-a-porter.png 998w\" sizes=\"auto, (max-width: 264px) 100vw, 264px\" \/><\/a><figcaption id=\"caption-attachment-5533\" class=\"wp-caption-text\">Purchase Page<\/figcaption><\/figure>\n<p>With price tags as high as Net-a-Porter\u2019s, its target market is much smaller than a moderately priced retailer. To compensate for this, Net-a-Porter must sell to high-end consumers all over the world.\u00a0 While style differs tremendously across the world, Net-a-Porter focuses on fashion that transcends geographies. Massanet believes \u201cKarl Lagerfeld is Karl Lagerfeld, and a red-soled shoe is a red-soled shoe\u201d (2).<\/p>\n<p>&nbsp;<\/p>\n<p>To increase the tangibility, Net-a-Porter offers three-day shipping and free returns to satisfy the \u201cinstant gratification\u201d feeling of shopping.\u00a0 Orders arrive in a high-end black box wrapped with black ribbon. The clothing inside is wrapped like a gift \u2013 tissue paper and all.<\/p>\n<p>&nbsp;<\/p>\n<figure id=\"attachment_5508\" aria-describedby=\"caption-attachment-5508\" style=\"width: 238px\" class=\"wp-caption alignright\"><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Net-A-Porter2.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-5508\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Net-A-Porter2-300x213.jpg\" alt=\"Net-a-Porter Packagin\" width=\"238\" height=\"169\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Net-A-Porter2-300x213.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Net-A-Porter2-1024x728.jpg 1024w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Net-A-Porter2-600x426.jpg 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Net-A-Porter2.jpg 1034w\" sizes=\"auto, (max-width: 238px) 100vw, 238px\" \/><\/a><figcaption id=\"caption-attachment-5508\" class=\"wp-caption-text\">Net-a-Porter Packaging<\/figcaption><\/figure>\n<p>Importantly, Net-a-Porter founded <em>Porter <\/em>magazine. The magazine is a new format to advertise the company\u2019s offerings \u2013 one with glossy pages and the implicit approval of the luxury brands that advertise in it. 88% of Net-a-Porter customers cite print as their preferred media for fashion content (3).<\/p>\n<p>&nbsp;<\/p>\n<p><strong><u>Operating Model <\/u><\/strong><\/p>\n<p><strong>Focus on Design:<\/strong> To compensate for the lack of tangibility, Net-a-Porter\u2019s online interface creates a \u201cluxury\u201d environment. The homepage strikes the viewer more as a digital magazine with options to view multiple editorials and photo shoots instead of an e-commerce site. Additionally, when on an actual shopping page, the item is presented in a curated outfit.<\/p>\n<p>&nbsp;<\/p>\n<p><strong><em>Porter<\/em><\/strong><strong> Magazine \u2013 Integration of Technology into Print: <\/strong>A person who subscribes to <em>Porter <\/em>increases site visits by 25% and spends 125% more while shopping on Net-a-Porter (3). To facilitate this, Net-a-Porter has tightly integrated the magazine with their mobile app. Customers are able to scan an issue with the Net-a-Porter app and be directed to a purchase page with items from that issue (5).<\/p>\n<figure id=\"attachment_5550\" aria-describedby=\"caption-attachment-5550\" style=\"width: 218px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/115031853.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-5550\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/115031853.jpg\" alt=\"Porter Magazine\" width=\"218\" height=\"218\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/115031853.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/115031853-150x150.jpg 150w\" sizes=\"auto, (max-width: 218px) 100vw, 218px\" \/><\/a><figcaption id=\"caption-attachment-5550\" class=\"wp-caption-text\">Porter Magazine<\/figcaption><\/figure>\n<p>&nbsp;<\/p>\n<p><strong>Organizational Structure: <\/strong>Net-a-Porter offers the same assortment of goods across geographies. Therefore, they have centralized buying teams, technology teams, and customer service teams. To address different geographies\u2019 needs, Net-A-Porter separates the marketing teams by region (2). Additionally, according to Theresa Austin, Strategic Programme Manager, goals are aligned by team. For instance, the operations and customer service groups focus on proficiency and efficiency, whereas the mobile, marketing, and data insight groups focus on innovation and \u201copen-minded changes\u201d (2).<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Office Layout: <\/strong>Net-a-Porter\u2019s office promotes information flow and integration between teams. It is laid out as one large trading floor with 90,000 square feet of open space and no offices or doors (4). Additionally, to emphasize the global scale of the business, large screens are throughout showing real-time data of where orders are being place.<\/p>\n<figure id=\"attachment_5520\" aria-describedby=\"caption-attachment-5520\" style=\"width: 300px\" class=\"wp-caption alignright\"><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/MR_PORTER_LONDON_06.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-5520\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/MR_PORTER_LONDON_06-300x200.jpg\" alt=\"Net-a-Porter Office\" width=\"300\" height=\"200\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/MR_PORTER_LONDON_06-300x200.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/MR_PORTER_LONDON_06.jpg 575w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><figcaption id=\"caption-attachment-5520\" class=\"wp-caption-text\">Net-a-Porter Office<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Not many Internet companies can claim that they\u2019ve been around since 2000, let alone e-commerce businesses (did we even know what e-commerce was in 2000?).\u00a0 Natalie Massanet, magazine editor turned Internet entrepreneur, founded Net-a-Porter in 2000 in London with little [&hellip;]<\/p>\n","protected":false},"author":826,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-5565","hck-submission","type-hck-submission","status-publish","hentry"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/the-tom-challenge-tom-winners-and-losers-assignment\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - 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