Some of the world may be obsessed with fashion that hasn’t yet happened – or the stuff now appearing on runways from London to Paris, which won’t be in-store until late February of 2012 – but the folks at eBay are much more interested in the profit potential of immediate gratification.
How else to think about their new venture, the eBay Fashion Outlet, which is launching in the United States today (it already exists in Germany and the UK)? It’s like Bicester Village or Woodbury Common, but better, because it will be open 24/7 and delivering all the time! Wackamo!
But is it weird timing, to launch a site dedicated to end-of-season or last-season merchandise during fashion week? Not according to Miriam Lahage, eBay’s VP and general manager for fashion, who came by for a chat earlier today.
She had some interesting points:
1. Fashion is eBays’s biggest focus. They do $9.7bn in what we call sales, but they call gross merchandise value (because eBay doesn’t actually make sales, their partner brands do; they make a percentage of the final sales);
2. Over the last three years, 60 per cent of their users have opted for fixed-price purchases of fashion, not auctions, and 70 per cent are buying new merchandise, not “gently used handbags;”
3. Off-line, outlet shopping is one of the fastest growing kinds of retail, only it almost always involved a “shlep.” This solves that issue.As for what is in it for the brands, they get to control their “storefront” – so, their look – as opposed to having a third party design a multi-brand web site for them (see Gilt, or other flash sales sites). They are also not tied to a point in time (flash sales sites again) and, by hooking up with eBay for an outlet channel they get access to a potential new customer base with very little capital spending, and they also don’t risk cannibalising their own full-price merchandise by hosting a sale site that might look cheap by comparison.
Such a venture already exists on the high-end, with Net-a-Porter’s The Outnet, their sale shop, but this will presumably target a more mass audience. So far 200 brands have signed up, including Neiman Marcus’s Last Call, Brooks Brothers, and Spanx (ties and underwear are not really season-specific, after all).
Makes you wonder about whether or not this will affect the previously super-hot Gilt.coms of the world, doesn’t it? OK, there’s something to be said for time-and-peer pressure, in terms of sparking sales, but equally, that buy-now-or-miss-it stress may turn out to be something we may all be able to do without, in the end.
Vanessa has been the FT’s fashion editor since 2003, and is based in New York, though she lived in London for 12 years.