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Post13. Promotion

     Yoox uses social media such as Instagram, Facebook, Twitter, and LinkedIn to intend to be welcoming places that encourage sharing and remain open to all customers and comments (Yoox.com, n.d.). It is operating for different purposes on each social media channels. Instagram post photos and information related to fashion, Facebook introduces fashion information and events that are happening in the company, and LinkedIn introduces news and activities of the company. In 2017, Yoox has used AI in order to provide a more personalized shopping experience to its customers on Instagram (Rydzek, 2018). Besides, the founder of Yoox uses his account of social media for potential customers and employees to inform his business philosophy.

https://www.instagram.com/yoox/?hl=en (Links to an external site.)

https://www.facebook.com/yoox/ (Links to an external site.)

https://www.linkedin.com/company/yoox-group (Links to an external site.)

https://www.instagram.com/federicomarchetti/?hl=en (Links to an external site.)

[Picture1. Yoox digital avatar]

     Yoox mainly is promoting by emails and apps. Customers can gain information about new products and sales from email. Moreover, it encourages customers the use of apps through extra price discounts. I think these ways are practical promotion tools for increasing their profit. In addition, Yoox has a lot of new attempts and one-on-one visit sales to top customers (Bojinca, 2019). Although this program is a limited service, it has a plan to expand according to its performance during test marketing. Given its high price and customer loyalty, I think one-on-one sales will be a new way to increase sales for Yoox.

     Yoox is one of the companies that make good use of public relations. This is differentiating from other companies' advertising and promotion strategies. It uses diverse institutions: Bloomberg, Goldman Sachs, Business of Fashion, and discriminatory events to promote its brand awareness. Plus, it used to bus wrapping advertisements for celebrated its anniversary in Europe and China. I think these ads are beneficial when viewed by customers because online retailers are not doing well.

[Picture2. Yoox advertisement]

     Considering the fast-paced online business environment, I believe that these efforts will continuously put Yoox the leading position in the industry.

References:

Bojinca, L. (2019, March 21). Fashion loyalty programs? The 8 most inspiring loyalty trends in Europe [Web log post].

Rydzek, C. (2018, December 12). YOOX combines AI and digital avatars in virtual try-on feature. Retrieved from https://thecurrentdaily.com/2018/12/10/yoox-ai-digital-avatars/

Yoox.com | YOOX NET-A-PORTER GROUP. (n.d.). Retrieved from http://www.ynap.com/store/yoox/

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Post12. Distribution

     Yoox is a kind of direct distribution, online retailer, a nonstore retailing (Lamb et al., 2019, p.260). Customers can conduct all purchasing processes, such as searching for products, placing on order, shipping, and returning through the Internet and apps. Its devices are equipped with up to date technology because to improve customers' convenience. Also, Yoox operates unique pop-up stores such as See by Chole, Montblanc, and Topshop online to provide distinctive services to its suppliers. They can show their own product line exclusively on the Internet. Yoox's distribution strategy is to implement all the forms of online that existed in the existing offline business.

     Yoox purchases luxury inventory by direct supply contracts with prestige fashion houses like Gucci, Armani, and Dsquared, which makes Yoox have a competitive advantage and sells multi-brands. To promote customers’ convenience, Yoox builds eight large-scale automated logistics centers around the world and delivers products quickly and accurately over 180 countries (Yoox.com, n.d.). For example, if a customer places an order in Korea, it will be shipped from the nearest Hong Kong Logistics Center. Yoox invests funds in supply chain management to improve its service quality.

[Picture1. Yoox Logistics center]

References:

Lamb, C. W., Hair, J. F., & McDaniel, C. (2019). MKTG12: Principles of marketing. Boston, MA, USA: Cengage Learning.

Yoox.com | YOOX NET-A-PORTER GROUP. (n.d.). Retrieved from http://www.ynap.com/store/yoox/

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Post11. Trend/Pricing

     Luxury online fashion business accompanies diverse threats and opportunities. Opportunities are that the size of luxury personal shopping market becomes increasingly due to increasing incomes of customers and the growth of online (D’Arpizio, Levato, Prete, Fabbro, & Montgolfier, 2019). Compared to the product life cycle, the online luxury market is a growth stage. On the contrary, threats are that the number of new competitors is increasing and the foreign government regulation is complicating, and tariff barriers are rising. Also, the bargaining power of suppliers like prestige fashion houses is stronger gradually. So, Yoox has a difficult to sell exclusive products in its shopping mall. Therefore, Yoox should focus on finding potential customers by a global advertising campaign aggressively because Yoox's brand awareness is still low, except in Europe. Also, it needs to strengthen its private label to provide differential products to customers and to reduce dependence on prestige brand suppliers.

     Yoox price policy inclines to the lowest in industries. Yoox usually is selling from 30% to 50% off the full price after a month since the product was released. Price of the product is continuously adjusted according to the sales trend of the product based on big data, and the price may vary from country to country. This is because customers have different preferences if a product that is not popular in the US is popular in Korea; the price of the product is higher in Korea. Furthermore, Yoox provides the customer with various selections by merchandises from $30 to $6,500 in the same category (Yoox.com, n.d.). So it obtains diverse targets by meeting customers' needs and wants of luxury fashion items.  

References:

D’Arpizio, C., Levato, F., Prete, F., Fabbro, E., & Montgolfier, J. (2019). The Future of Luxury: A Look into Tomorrow to Understand Today. Retrieved from https://www.bain.com/insights/luxury-goods-worldwide-market-study-fall-winter-2018/

Yoox.com | YOOX NET-A-PORTER GROUP. (n.d.). Retrieved from http://www.ynap.com/store/yoox/

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Post 10. Services

     Yoox sells luxury clothing and accessories online to its multinational customers in more than 180 countries (Yoox.com, n.d.). So I think its service quality is more important than the fashion business that runs a physical store based on a limited area. If customers do not satisfy the purchase or service, they will leave it immediately. Account for the characteristics of online business, Yoox provides the following services; increasing customer service personnel, improving shipping service, and adjusting the price policy.

     Yoox's customer care center can answer dozens of language. The company emphasizes on the responsiveness: the ability to provide quick services (Lamb et al., 2019, p.216). If I use South Korea site, I can ask questions by Korean. Yoox also focuses on the assurance of services: the knowledge of employees and their ability to convey trust (Lamb et al., 2019, p.216).  In the pricing, Yoox applies the price adjustment policy: match reduced rates within three days of customers' order's delivery date for the same item on yoox.com and empowers some authority to the customer care staffs to meet consumer expectations (Yoox.com, n.d.). Finally, Yoox uses UPS shipping service, which has a worldwide shipping network. When returning, customers can return products at any time by using the global shipping points of UPS. If there is no shipping point in the area, the delivery men visit customers' place and take the product to be returned. These services are activities that help build reliability in customers.

References:

Lamb, C. W., Hair, J. F., & McDaniel, C. (2019). MKTG12: Principles of marketing. Boston, MA, USA: Cengage Learning.

Yoox.com | YOOX NET-A-PORTER GROUP. (n.d.). Retrieved from http://www.ynap.com/store/yoox/

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Post9. Brand Detail

     The name of the brand is Yoox, and it reveals the personality of Yoox. As I mentioned at Post2, Yoox's term is the male Y and female X chromosomes and the OO a nod towards the binary code, the fundamental language of the digital age (Williams, 2017). Yoox's symbol is the following picture, and Yoox's trademark registration number is 4364284 (“Justia trademarks,” n.d.).

[Picture1. Yoox logo]

     Also, Yoox is a global brand, which obtains at least one-third of its profits from outside Italy (Lamb et al., 2019, p.188). I think Yoox's brand; including name, term, and symbol fits its business because the brand expresses men and women as it sells menswear and womenswear. Also, Yoox is not a manufacturers’ brand, but an online retail brand that does not have multiple product lines.

     Yoox strengthens brand loyalty for top customers by offering personal shopping experiences. It is called EIP-extremely important person program. Members can get a highly-personalized of fashion consultations by one-on-one home sessions, and this service is available to customers in London, New York, Hong Kong, and Los Angeles (Bojinca, 2019). Since Yoox sells high-end fashion item online, EIP is the suitable brand loyalty program for its target customers.        

References:

Bojinca, L. (2019, March 21). Fashion loyalty programs? The 8 most inspiring loyalty trends in Europe [Web log post].

Justia trademarks. (n.d.).

Lamb, C. W., Hair, J. F., & McDaniel, C. (2019). MKTG12: Principles of marketing. Boston, MA, USA: Cengage Learning.

Williams, G. (2017, October 04). How Yoox turned the luxury-goods industry onto digital. Retrieved from https://www.wired.co.uk/article/yoox

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Post 7. Packaging

     There are four functions in the packages; containing and protecting the products, promoting products, facilitating the convenience of products, and reducing environmental damage (Lamb, Hair, & McDaniel, 2019). Yoox's package has three functions among them.

      First, Yoox’s package has a physical protection function for the product. The luxury fashion items should not wrinkle or scratch when shipped. So, they wrap the product with thin paper and then packed with hard paper box. The double packing prevents wrinkles and damage to the product. Besides, various boxes are provided according to the product size, so efforts are being made to minimize damage to the product.

     The second, Yoox's package is designed to minimize environmental damage by using boxes made of recycled or recyclable materials (Yoox.com, n.d.). Yoox specifies the eco-friendly material, and it also tells users to recycle the Yoox's box inside the boxes. Environmental issues are a significant proposition for fashion companies. They are focused on developing natural dyes and artificial leather to protect nature and animals. Yoox has used recycling package since the beginning of the business.

     Also, Yoox's package brings about convenience to customers. The box is designed as straightforward to open and seal. If people open both corners, it is effortless to open even big box, and when they seal again, there is a wrinkle line that makes the shape of the box, so anyone can easily repack it. I want the quality of the current package to continue.

 Reference:

Lamb, C. W., Hair, J. F., & McDaniel, C. (2019). MKTG12: Principles of marketing. Boston, MA, USA: Cengage Learning.

Yoox.com | YOOX NET-A-PORTER GROUP. (n.d.). Retrieved from http://www.ynap.com/store/yoox/

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Post 6. Competition

1. Key competitors

     More than 200 e-retailers are competing in luxury markets around the world. Yoox's main competitors are US Department Stores; Neiman Marcus, Mytheresa, Shopbop, online multi-brands; Matchesfashion, LuisaviaRoma, Farfetch ("Yoox Net-A-Porter," 2017). 

     I want to mention about the most potent Farfetch. Headquarter is located in London and founded in 2007. Farfetch's 2018 sales were $ 1.4 million (Farfetchinvestors.com, n.d). Farfetch is displaying more items than Yoox, and the most significant difference from Yoox is that Farfetch has a consignment business model that does not have inventory. Also, it has been offering shipping services within 90 minutes of ordering in the ten cities (Farfetchinvestors.com, n.d). Moreover, Farfetch was invested by a Chinese company among some of its capital, so its activity in the Chinese market is expected to be more active than Yoox. Although Farfetch's sales are still lower than that of Yoox, the industry is evaluating Farfetch as a threatening competitor to Yoox.

2. Yoox's position in the market

     Yoox's positions are the price leader and digital innovator in the online luxury market. Yoox offers the lowest price in the industry due to selling off-season products and direct distribution contracts with many fashion manufacturers. Also, Yoox has been continuously developing new digital technologies and introducing innovative technologies on the Internet as well as on the mobile. For example, it introduced the word-ordering system the first in the industry and is using a mannequin as a social media influencer, which is different from other companies. Yoox is also interested in digital education for its employees, so Yoox opened up a digital education program with Bocconi University in Italy.

3. Yoox's market share

     According to Online Luxury Report, the market size of the global online sales for luxury will be $27.9 billion in 2017 (“Online Luxury”, 2018). YOOX NET A PORTER is the largest player in digital luxury with an estimated market share of 10% globally ("Yoox Net-A-Porter," 2017). YOOX NET A PORTER's sales in 2017 were EUR 2.1 billion (Annual report, 2017). Although it is difficult to pinpoint the market share according to sources, it is clear that YOOX NET A PORTER plays a leading role in the online luxury market.

 References:

Annual Report 2017 | YOOX NET-A-PORTER GROUP. (n.d.). Retrieved from http://www.ynap.com/document/draft-financial-statements-and-consolidated-financial-statements-2017/

Jefferies (2017). Company Note. Retrieved from https://www.jefferies.com/CMSFiles/Jefferies.com/files/Insights/YooxNetAPorter.pdf.

(n.d.). Retrieved from https://www.digitalcommerce360.com/product/luxury-retailer-report/

(n.d.). Retrieved from https://www.farfetchinvestors.com/financial-news/news-details/2019/Farfetch-Announces-Fourth-Quarter-and-Full-Year-2018-Results/default.aspx

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Post 5. Target Market

1. NAICS code

    Yoox's NAICS code is 454110-Electronic Shopping and Mail-Order Houses (naics.com, n.d.).

2. Yoox's target market

     The criteria for target segmentation are largely divided into geographic, demographic, psychological, and product benefits (Lamb, Hair, & McDaniel, 2019). In this post, I will look at the demographic and psychological characteristics of the target of Yoox.

     In terms of demographic segmentation, the target market of Yoox is mainly 20 to 40 years of age and 2/3 of women and 1/3 of men by gender ("Yoox Net-a-Porter Group," 2017). Income levels are more than $ 100,000 in annual household income, with higher education and their occupations are professionals or managers in the company. However, it is challenging to target markets based on geographic or ethnic segmentation. Since Yoox has sourced products from all over the world, including Europe, America, and Asia, it does not distribute products that are specific to a region or ethnicity.

     From the psychologic segmentation, the customers of Yoox are interested in their own style, have a curiosity and global taste ("Yoox Net-a-Porter Group," 2017). Also, motivations for purchasing fashion items is not the concept of replacing existing old clothing, but rather the desire to be more prominent than others and to show others that they have a sense of fashion. Their lifestyle enjoys leisure and working life simultaneously. Therefore, they enjoy purchasing fashion items suitable for the place and time. They are also interested in social issues and enjoy expressing their opinions. It is also a group that considers social activities within the same social class as essential. Target customers are familiar with digital devices. They are open to new technologies and are familiar with purchasing products on the Internet or mobile and are active in social media activities.

 References:

Lamb, C. W., Hair, J. F., & McDaniel, C. (2019). MKTG12: Principles of marketing. Boston, MA, USA: Cengage Learning.

(n.d.). Retrieved from https://www.naics.com/naics-search-results/

Yoox Net-a-Porter Group. Retrieved from http://cdn3.yoox.biz/cloud/ynap/uploads/doc/2017/YNAP_ROADSHOW_PRESENTATION_September2017_vFINAL.pdf

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Post 4. SWOT Analysis

Marketers conduct a SWOT analysis to help them understand the present and future of the market. The internal factors are the strengths and weaknesses of the firm, and the external factors are the opportunities and threats analysis of the industrial environment (Lamb, Hair, & McDaniel, 2019). 

1. Strengths - High automation technology and technical hubs - Employee empowerment - Strong brand awareness - Market Leadership - Broad products supplier network - Competitive price advantage

2. Weaknesses - Reduced the exclusive market position in the luxury online marketplace - Reduced royalty for suppliers - Shrinking Margin

3. Opportunities - Increased  incomes of customers - Growth of online luxury fashion market - Market  penetration in new markets like Latin America and the Middle East

4. Threats - Increasing  new competitors - Chinese  and American Trade WarsBrexit  impacting on Europe market - Strengthening  foreign governments regulation

     Through SWOT analysis, I make two suggestions to the management of Yoox. First, I would like to propose to reinforce the brand identity of the firm to strengthen sustainable competitive advantages. The reason is that Yoox is a luxury discount shopping mall. To enhance the atmosphere of the website, Yoox is proposing fashion trends or carrying out various fashion events. However, I think these activities are inefficacy. I believe that Yoox focuses on sourcing differential products because its product differentiation from other shopping malls is getting worse. It would be more reasonable to make a publicity campaign to propose fashion trends to customers in the Net-A-Porter strategic business unit.

     Second, Yoox is beginning to make inroads into South America and the Middle East to secure new markets. I believe it will be more efficient to acquire more customers in existing markets than to entry new markets. Still, Yoox’s brand awareness in Asia and the US market weaken, so Yoox has to extend brand awareness in the existing market first. Notably, Chinese people like luxury goods. As China's economy grows, China's premium market continues to increase. According to Bain & Company Research, over the past three years, China's luxury market has grown twice as fast as the global average market growth rate (D’Arpizio, Levato, Prete, Fabbro, & Montgolfier, 2019). So I advise Yoox to focus more on expanding sales in Asian markets.

 References:

D’Arpizio, C., Levato, F., Prete, F., Fabbro, E., & Montgolfier, J. (2019). The Future of Luxury: A Look into Tomorrow to Understand Today. Retrieved from https://www.bain.com/insights/luxury-goods-worldwide-market-study-fall-winter-2018/

Lamb, C. W., Hair, J. F., & McDaniel, C. (2019). MKTG12: Principles of marketing. Boston, MA, USA: Cengage Learning.

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Post 3. Strategy

1. Key differentiators

     Yoox's key differentiators are digital-based technology, product sourcing ability, and competitive price. Firstly, the digital-based technology of Yoox the company was a differentiator of the company, which was emphasized by the founders. In 2000, when the company started its business, customers were reluctant to buy luxury items online shopping mall, so Yoox focused on the ease of shopping on getting rid of shopping barriers. Yoox's management philosophy has led to innovation in digital-based technology, and it has grown to become a leader in the online luxury marketplace. New technologies are applied to maximize the convenience of the purchasing process, payment, delivery, and return. According to Yoox, it took 4 seconds to complete place the order (Yoox.com, n.d.). To minimize the experience of customers' failure to purchase, Yoox has detailed descriptions of product photos, colors, materials, and sizes, and actively promotes product proposals and promotions based on customers' purchase analysis.

     Another differentiator is the most extensive assortments of products. In 2016, Yoox had 8.7 million stocked items ("Yoox Net-a-Porter Group," 2017). Customers have a broader selection of products and are always on the lookout for new stuff every time. This sourcing power is attributed to the supply network capability of the firm.  

     One of the critical differentiators of Yoox is price strategy. Even the same product, Yoox offers the lowest price. This is possible with a direct distribution contract with the luxury fashion house such as Gucci, Dior, and Diesel. Yoox reduced the step of traditional fashion distribution structure by removing intermediary distributors. These innovative digital technologies, sourcing capabilities, and pricing make Yoox a leading company in luxury online retail market.

2. Sustainable competitive advantage

     Lamb, Hair, and McDaniel state that “a sustainable competitive advantage is one that cannot be copied by the competition” (Lamb et al., 2019, p.24). Yoox has sustainable competitive advantages such as providing the lowest price, the widest variety of fashion items, and convenience to the purchasing process. Besides, Yoox builds logistic warehouses to deliver its product fast. Twenty-five countries provide with the same or next-day delivery ("Yoox Net-a-Porter Group," 2017). To maintain these competitive advantages, Yoox continuously invests its employees' education like digital learning and empowerment. I think these Yoox's efforts can lead Yoox to keep sustainable competitive advantages.  

 References:

Lamb, C. W., Hair, J. F., & McDaniel, C. (2019). MKTG12: Principles of marketing. Boston, MA, USA: Cengage Learning.

Yoox.com | YOOX NET-A-PORTER GROUP. (n.d.). Retrieved from http://www.ynap.com/store/yoox/

Yoox Net-a-Porter Group. Retrieved from http://cdn3.yoox.biz/cloud/ynap/uploads/doc/2017/YNAP_ROADSHOW_PRESENTATION_September2017_vFINAL.pdf

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Post2. Describe Yoox

     In 2000, Federico Marchetti founded Yoox, a luxury online retailer company, in Bologna, Italy. Then, in 2015, Yoox was merged with Net-a-Porter of the UK and became the current YOOX NET-A-PORTER GROUP, a leading e-commerce company, which serves more than 180 countries worldwide (Yoox.com, n.d.). YOOX NET-A-PORTER GROUP has four strategic business units such as Yoox, Net-a-porter, Mr Porter, and The Outnet. Yoox and The Outnet are discount luxury online retailers, and Net-a-porter and Mr Porter are luxury fashion online retailers at full price. Each mall provides product/services differentiation. I want to focus on Yoox in term blog project.

     The meaning of Yoox is the male Y and female X chromosomes and the OO a nod towards the binary code, the fundamental language of the digital age (Williams, 2017). Also, Yoox sells overstocked or unsold products from the previous years or seasons at a discount price. The company can buy stocks through direct dealing contracts with the luxury brand such as Armani, Cavalli, Ferragamo, Gucci, and Dior because there are many famous fashion houses in Italy. Moreover, they have their own brand, Yooxen, which is a kind of private label of Yoox. They incubated young designers with talented on its websites. The prices of brands introduced by Yooxen are lower than prestige brands, suggesting new fashion trends.

     The pricing strategy of Yoox is selling at 50% off the full price. When you compare the price of similar products, you can see that Yoox offers the lowest price range among comparable online malls. In terms of promotion strategies, 20% off a month after launching a new product and approximately 40% off promotion after three months. Also, they are encouraging intermittent free shipping services to stimulate purchasing desires to new and existing customers. Besides, Yoox provides a detailed explanation of items such as size, color, fabric, and fit more. Customers can check the fit of garments quickly and reduce the probability of a purchase failure.

     As one of the leading groups in the online luxury retail business, Yoox is engaged in countless innovation activities throughout the value chain system to maintain its competitive advantages in various product sourcing and price strategies.

Summary of Yoox 1. Business - Online luxury fashion retailer - Website: www.yoox.com - Products: Prestige Women's fashion, men's fashion, kids' fashion and design art and accessories such as Gucci, Nina Ricci, Marni, Dolce & Gabbana, Prada, etc. - Established in 2000

2. Competitive advantages - Selling overstock or unsold luxury items in previous seasons at discount price range - Innumerable fashion items - Quick shipping services with high-quality packing

3. Parent company - Company Name: YOOX NET-A-PORTER Group - The type of company: Private Company - Company Website: www.ynap.com - Vision statement: Empowering people As the world’s leading online luxury retailer, we have a responsibility – and also an opportunity – to empower people to create a more sustainable future. We must work as a catalyst, sharing knowledge, innovating, leading by example, to translate this vision into reality ("Sustainability", n.d.). - Net Revenues: EUR 2.1 billion in 2017 (Annual report, 2017) - Number of employees: 4,700 in 2018 - Headquarters: Milan, Italy - Subsidiaries: UK, US, Japan, France, Spain, China, Hong Kong - Established in 2015

 Reference:

Annual Report 2017 | YOOX NET-A-PORTER GROUP. (n.d.). Retrieved from http://www.ynap.com/document/draft-financial-statements-and-consolidated-financial-statements-2017/

Sustainability | YOOX NET-A-PORTER GROUP. (n.d.). Retrieved from http://www.ynap.com/pages/sustainability/

Williams, G. (2017, October 04). How Yoox turned the luxury-goods industry onto digital. Retrieved from https://www.wired.co.uk/article/yoox

Yoox.com | YOOX NET-A-PORTER GROUP. (n.d.). Retrieved from http://www.ynap.com/store/yoox/

* The keywords are in bold.

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Post1 Brand Name: Yoox

     My major is fashion merchandising, and after graduating, I am going to join a fashion company or establish my own company. Mainly, I am interested in online fashion retail, and the company that will build in the future is a luxury online retail company. Yoox is an ideal luxury online retailer I think, and I’ve been following the products mix, services, price range, and promotion strategies that they provide as a customer of Yoox since 2013. Although Yoox was not on the brand list of the original blog project, I gained permission from Professor Kathy to perform the blog project on the Yoox brand. I thank the professor for allowing it.

     The reason I became interested in Yoox was that their business model was much differentiated. Since luxury fashion items are expensive, they are sold mainly in physical stores. Yoox has sold luxury fashion items at online shopping malls from the beginning of the business in the 1990s. They also sold new products as well as carryover goods at discounted prices, thereby lowering the price barriers for customers in purchasing luxury items. This was possible because Yoox was able to buy a variety of carryover products through direct distribution contracts with luxury fashion houses. Luxury fashion items have their own signature designs that are less sensitive to fashion trends. So customers do not hesitate to purchase overstock stuff.  The founder of Yoox was born in Italy, and he was a graduate of Columbia Business School and started his business before online shopping mall became popular. I was deeply impressed with his insights as a founder and his strategy to grow his business. I follow up on his management activities through Facebook and Instagram.

Through this project, I plan to study marketing plan deeply, how to grow brand equity and management activities of the CEO. I am confident that this course will give me great inspiration for my future career.

* The keywords are in bold.