Name: Federico Marchetti
DOB: 21 February 1969
Place of birth: Ravenna, Italy
Mr. Marchetti, 20 years ago you revolutionized the luxury fashion industry by bringing it online with your e-commerce platform, YOOX. How was your vision received back then?
In 1999, it was a completely different era in terms of fashion, of digital, and of digital fashion! Imagine that there was the 56k modem that you had to plug into your computer from your fixed line, and that's how you connected to the Internet. There was no Instagram. Netflix was selling videotapes. There was no Wikipedia. A completely different situation from now. And there was, let's say, a dreamy entrepreneur with a lot of imagination: I was imagining this world that was completely different from the reality that I just described to you.
How did you imagine it?
Well, the fashion world was completely distant and separate from the world of technology. At the time, fashion people were looking at tech people like nerds. And tech people were looking at fashion people like fashionistas. But I dreamt of this world where the two would coexist, and actually would embrace and reinforce each other.
“Once you have a strong vision that you fully believe in, you can easily convince others. To believe in something, that’s really powerful!”
Which is the status quo that we take for granted today.
Yes, and in fact, over the last 12 months of the Covid pandemic, the online world saved the fashion world: thanks to digital, brands continued to exist, to sell — and most importantly, continued to have a dialogue with their customers. But 20 years ago, at the beginning of my career, everybody was asking me the same question, “But how can you sell fashion online if you cannot try on the clothes?” (Laughs)
And from the perspective of the brands, there was also the fear that an online presence would diminish their brand equity. What made you feel so confident that was not going to be an issue?
First of all, I would say that once you have a strong vision that you fully believe in, you can easily convince others. To believe in something, that’s really powerful! In 1999 and 2000, the percentage of luxury sales done through digital was at 0%. Nowadays, that percentage is probably around one third of their total revenue. So from zero to a third! But at the very beginning, for fashion businesses, the Internet was not perceived as important. So in the end it was a matter of, “Why not dream with this dreamer?” They were testing the waters with me. I would say most of the Italian and French luxury brands, and many European ones as well, had their debut online with YOOX, or with Net-A-Porter, who we merged with in 2015.
What do you think made them trust you?
Looking back now, I have to say that me being Italian and located in Milan, was a big competitive advantage, and it definitely helped. But I also knew that the most important thing for the customer and for the brands was quality. So if you were giving quality to the brands and to the customers in everything from the supply chain, to the packaging, to the aesthetic, to the innovation, well, this was the key to success.
Several years ago you said that you always felt like an outsider in the fashion world. Do you feel more like an insider today?
Frankly, no. (Laughs) To be honest, I always enjoyed being super partes, which is a Latin expression used to define, rather than an outsider, someone that is neutral. Because I have to deal with all these brands: they have their own agenda, their own ego, their own aesthetic, their own strategy, and so on. And I have to build long term relationships, sharing very, very confidential information with all of them. Moreover, on the same platform I had Kering, LVMH, and Richemont — which are the three biggest luxury groups in the world, and they compete with each other! So the level of trust that was given to me in terms of information shared, was very important.
It’s vital for you to be perceived as someone who will keep everyone’s best interest at heart.
Right, and I am grateful for their trust. But I probably get this trust because I've been always neutral and I've never taken one position over the another. Even when Richemont bought 100% of my company, I continued to work with Kering, I continued to work with LVMH.
You raised capital for your idea and launched your platform just short of the dot com crash in 2002, which is incredible timing in hindsight. How did you experience the crash?
If I would have started one month later, I wouldn't be here right now! Because in April 2000, the famous Internet e-commerce economy that everybody said was going to change the world — it was all over. Suddenly there was no more financing from venture capitalists to e-commerce companies. You know when you see a door that is closing? I passed through exactly at the last minute. And that's fascinating, in a way. I've always been quite good at timing. Probably my two best qualities: a good sense of timing and a good intuition. Two sides of the same coin. Having a strong vision, and being able to anticipate what customers will want ahead of time — that’s what really helped me to never get worried. I'm an optimistic guy, which along with speed, is a fundamental part of being an entrepreneur.
“Without technology, we cannot dramatically change the pace in which we're operating. With it, I really believe it can help us to save the planet.”
Do you find yourself still as speed-driven today? Would you describe yourself as impatient?
Unfortunately, I have to say, yes! I love action. I love concrete things happening. I've always tried to be the first to launch something, and this requires speed of action, speed of execution, and at the same time, a great team! Because by myself, I wouldn’t be able to do anything. So thank goodness I have a great team, working with me for over 20 years now. We've been the first to invent the mono-brand online store, we've been the first international e-tailer to launch in China in 2010... We have had so many firsts. If you want to be innovative, you need to be the first, you cannot be a follower.
What does innovation look like for you these days?
I mean, in terms of e-commerce in the last five years, I've worked on artificial intelligence, big data, augmented reality… But e-commerce now has become very mainstream. In a way, I even feel that e-commerce is a bit old fashioned now. However, there is a lot of innovation possible and needed at the intersection between technology and sustainability! I foresee that in the next five years, there will be a revolution in terms of sustainability through technology. Already in 2008, I had this intuition that one day customers will become more interested in sustainable products and will be led by sustainable values.
What triggered this awareness?
Well, getting to know the fashion industry inside out I learnt that in the past 20 years, for instance, the production of garments doubled, and yet, 40% of these clothes are never used! And only 1% of materials are recycled. But also as my moral commitment — as a father, as a humanist who loves the planet. Today, I’m honored to be chairman by appointment of His Royal Highness The Prince of Wales of the Sustainable Markets Initiative taskforce on fashion. I think the fashion world is at a crossroad, and in terms of the big picture, it’s vital to go from a linear to a circular fashion, accelerated with the help of technology. Because without technology, we cannot dramatically change the pace in which we're operating. With it, I really believe it can help us to save the planet.