Fashion Predictions from The Economist

by Rachel Yeomans | September 4th, 2009   

It seems that not just consumers are addicted to the Internet and social media–it seems every other article I read on the fashion industry over the past week, is how the industry is going digitial. After writing yesterday on fashion e-commerce and style web giant Net-a-Porter, I wasn’t too surprised to glance over headlines and see one from The Economist’s business section entitled: “Selling designer goods online: When cheap is exclusive”.

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Current Advertised Sale at Rue La La

Highlighting American e-tailers such as Gilt Groupe, HauteLook, Rue La La, and their French rival, the article concentrates on the decline of store retail and the boom of e-shopping. Not only do these sites offer the same attire offered in retail stores at around 80% off the retail price, but also a hint of elitism. In order to even be able to log in to view the goods, you must be invited by another member–thus providing exclusivity and allure. Not to mention every sale only lasts a total of 24 hours; so you can imagine the rush to buy your size in the Nicole Miller shift being slightly less hectic online as you don’t have to tear it from the hands of another anxious shopper.

Here are some statistics:

Rue La La – started in 2008; expects $130m in revenue next year

Gilt Groupe - launched in 2007; has over 1.4m members in America, expects $400m in revenue next year; recently launched a site in Japan that has over 200,000 members

Vente-privee - launched in 2001; says its membership is 8m; up 42% from last year; has operations in Germany, Britain and Spain as well as France

Net-a-Porter – launched in 2000; expects $156 billion in 2009 according to Forrester Research

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Current Advertised Sale at Rue La La

After skimming through the rest of the article, I was taken aback by the cliffhanging wrap-up by Hamilton South, a founding partner of HL Group, a retail consultancy. According to South, the future of luxury retail may one day not be a mouse click away, but rather a remote control click. South predicts that one day television viewers will soon be able to use their remote controls to buy the clothing that appears in the programmes they are watching. Just imagine what that would do for the ratings of next season’s Project Runway… .