We are now in the new dot com era, a time known as social, local and mobile (SoLoMo)
cannibalistic” and has set the price and returns policy to be exactly the same.
The priority would remain to look for store expansions with online stores available for people who did not have easy access to a physical location. In addition to the online store, Zara created a smartphone App and say they engage with customers through a
social media
presence on Twitter and Facebook (Zara´s Facebook page has 16 million fans). So are they doing all the right things? Well maybe. If we go back and look at how discount retailers with out of town shops disrupted full- service department stores, the key lesson was that the only way to defend yourself is to set up an independent, stand alone unit with no links to the main stores. Quite clearly Zara are not doing that but instead are hedging their bets. History tells us that makes them vulnerable.
Startups From talking to retailers, their argument is as follows; “Our t-shirts go for €3, how can we build an online business on that?” Sounds sensible until you counter, if our t-shirts go for €3, how can they come all the way from India? The first online efforts to take on retail came during the dot com boom. The story of
Boo.com was well told in Boo Hoo: A Dot Com Story by Ernst Malmsten, a book released after the company´s collapse. Other companies concentrated less on replicating the complete shopping experience and instead on a niche such on repeat ordering. The idea was that every three or six months you would be sent a box of socks and underwear.
22 entrepreneurcountry
Popping into a store can be a hassle but these items are standard for many people so could be ordered on repeat. These companies had limited success but were mostly overtaken by the large online retailers who could negotiate better prices. We are now in the new dot com era, a time known as social, local and mobile (SoLoMo). New startups are competing not just on price but also on functionality due to the emergence of phenomena such as Facebook, Twitter as well as technologies such as GPS, Broadband and behaviours such as crowdsourcing.
The first thing to understand is how fashion is now organised around looks rather than garments, so for example, whenever noted author and party planner Pippa Middleton is photographed in public there is a spike in sales of whatever she is wearing. Just looking locally, Shot & Shop is a fashion startup in the Wayra Academy in Madrid. UniQinu is another one in Area31, the startup incubator at IE Business School. Another is Chicisimo, a global community of girls sharing their personal style and inspiring each other which has raised over €800,000 in Venture Capital. As ever, the tendency is to dismiss the passion behind these sites or others such as Fashion Foie Gras or What Pippa Wore as just enthusiastic amateurs. Call me back when they get a Business Model is the cry from the VIP lounge in Heathrow. The danger of course is that the business model they get works much better than the one you have.
Three more substantial names who merit our attention are Asos, Motilo and Net-A-Porter. As the pioneer of selling luxury fashion brands on the internet, Net-A-Porter is the best known. Founded by Natalie Massenet in 2000, the company was sold to the Richemont group in 2010 for around £350m. In an anecdote that will bring joy to those in the mostly unappreciated field of financial services leaflet printing, it all started when she picked up an “Are you an entrepreneur?” leaflet in a Barclays Bank. Motilo is the tale of another glamorous female entrepreneur, Rome born Sofia Barattieri.
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