Yoox lsn 7 Flashcards
What is YOOX and what is unique about its name?
YOOX is an Italian digital technology company that sells fashion and luxury items online. Its name combines the Y and X chromosomes (representing men and women) with a double O (representing binary code zeros), which is meant to be a philosophical manifesto reflecting the company’s DNA: human and machine, men’s and women’s DNA embracing technology
What was Federico Marchetti’s background before founding YOOX?
Marchetti had a Bachelor’s degree in Business from Bocconi University in Milan and an MBA from Columbia University in New York. He worked at Lehman Brothers and Bain & Co. before starting his own company. He did not have a technological background or come from the fashion world
What was the initial idea behind YOOX?
marchetti’s idea was to sell fashion and luxury items online, specifically focusing on previous-season collections. He aimed to combine the worlds of luxury and technology. He wanted to create a virtual shop where customers could mix and match different styles and brands
What was the initial challenge in starting YOOX?
The fashion industry did not understand the Internet’s potential at the time, and luxury shopping was traditionally based on physical stores. Marchetti had to convince luxury brands to go online. There was no existing market for selling fashion online and there was a lack of investors
How did Marchetti secure initial funding for YOOX?
Marchetti secured initial funding from Elserino Piol, who provided 3 billion lire in exchange for 33% of the company. Piol gave Marchetti a strict timeline of three months to set up the company
What was YOOX’s initial business model?
YOOX started by buying unsold garments from past seasons from multi-brand stores and a few single brands. This allowed them to offer a mix of styles and brands and promote a mix-and-match effect. The clothes were sold online at half price
How did YOOX differentiate itself in the market?
YOOX focused on the creative component of each item, and not just price, presenting the idea that “good fashion never dies”. YOOX was a pioneer in bringing vintage online and also launched special projects with artists and designers. They also focused on customer experience with an easy to use interface, customer comments, and easy returns
What marketing strategies did YOOX employ early on?
YOOX focused on creating a “place of wonders” rather than just a website selling discounted luxury fashion. They used unconventional methods to attract attention, such as using a talking 3D android at Pitti Immagine. They also focused heavily on customer service, including accurate deliveries and easy returns
How did YOOX build relationships with fashion brands?
YOOX contacted fashion brands to buy their past season collections, offering a way for them to extend the life of their garments without competing with current in-store offers. They sold the items online at a discount, maintaining a margin to cover costs
What was YOOX’s expansion strategy?
After securing funding from Benchmark Capital, YOOX expanded to the United States in 2003, opening an office in New Jersey. They also expanded to Japan in 2004. YOOX also developed a mono-brand network, creating and managing websites for different fashion brands
How did YOOX transform the fashion industry?
YOOX convinced many luxury and fashion houses to go online when the internet was still unknown and helped dismantle the idea that sales had to be based only on the current season and new collections. YOOX introduced a new sustainable model by extending the life of garments and also transformed the customer into a DIY fashion enthusiast who could create their own looks
When was YOOX officially launched?
YOOX was officially launched on June 21, 2000, after a few failed countdowns
What was the initial funding situation for YOOX?
Marchetti initially turned down an offer for 500 million lire for 50% of the company. He then received 3 billion lire (approximately 1.5 million euros) in exchange for 33% from Elserino Piol. Piol gave Marchetti three months to get the company up and running
When did Benchmark Capital invest in YOOX?
Benchmark Capital contacted Marchetti in mid-2002 and invested in YOOX. Balderton Capital, Benchmark’s English branch, also financed YOOX in early 2003
