In 1995, Jeff Bezos launched the now ubiquitous Amazon.com, but it wasn’t until 2003 that they reported a yearly profit. After the dot-com boom of the early 2000’s, most people thought that online ventures were destined to fail. In some markets that was true until recently, but in fashion the opposite was true. In 2008, online retail sales in the United States were projected at $208 billion USD.
What most consumers overlook are the benefits of e-commerce for young designers. In the normal buying process, the designer marks-up the cost to a wholesale price and retailers sell them for the suggested retail price as provided by the designer. When designers sell directly from the warehouse, they bypass the retailer and the profit margin is exponentially increased. This is likely the reason why www.loefferrandall.com can donate a portion of the proceeds of their web-venture to Living India, an organization helping 48 orphans living with HIV in India. Designers are also turning to mobile phone applications to make the collections more accessible. Only time will tell whether this translates to real sales or not.
The fashion industry is seeing large and small designers alike
folding under the pressure of the economy and the fading markets.
Despite the obvious benefits of an e-commerce site, most designers
rely on the retail accounts to finance their production. A solution
to most luxury designer’s online retailing needs has been created
by private, invitation-only stock sales. Websites like
Vente-Privee, Editor’s Closet, Gilt Groupe, Rue La La and Ideeli
are booming despite the dot-com curse looming over them and the
fact that their target market is spending less money. Major online
retailers are following suit with projects such as
Net-A-Porter.com’s The Outnet and Revolve Clothing’s Rewind.
These ‘private’ sales allow luxury designers the opportunity to
unload stock without the notion of dark times entering the
consumer’s mind. Invitations to these sites are not hard to obtain,
but the firewalled entrance of them gives the illusion of
exclusivity. Despite only gaining mainstream popularity this year,
Gilt Groupe is expected to do over $400 million USD in sales this
year.
