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Happy Friday, everyone! With the spring equinox behind us (and all the holidays therein), it’s likely you’re preparing your online store for high spring sales, changing out inventory and images to appeal to consumers’ spring-forward mindset. Indeed, the worst of winter is behind us and smoother, summer days are right around the corner. Optimizing for conversions now will help your store combat a summer sales lag.
As you figure out your Q2 strategy, let’s take a look at this week’s top ecommerce news. We’ve rounded up the top highlights from Madewell, Nordstrom, Ordre.com, The RealReal and more to keep you up caught up.
Madewell Expands Omnichannel Presence –– Looks to Department Stores for Added Physical Footprint
As proof that even those companies doing well when it comes to ecommerce must diversify, Madewell inked a deal this week with U.S. department store chain Nordstrom, as reported by WWD. The distribution deal will start next month and Madewell items will be available in 15 Nordstrom stores throughout the U.S.
This is not Nordstrom’s first attempt at pulling in what many would call brands with cult followings into their stores. In 2012, Nordstrom tapped Topshop and added merchandise from that brand to 14 U.S. stores. Today, 52 Nordstrom stores have in-store Topshop departments. Topshop, itself, however, maintains only three U.S. stores –– in New York City, Chicago and Las Vegas.
It’s likely that if the partnership goes well, Madewell will also be expanding to additional Nordstrom department stores. In addition, Madewell announced similar expansion to a digital department store of sorts in February when the brand made their products available on Net-a-Porter.
In all, ecommerce brands, no matter their size or following, are seeing the need for an increased physical footprint –– and they’re choosing omnichannel (owned site, owned stores as well as both digital and physical marketplaces) to diversify and find new customer bases.
Ordre.com Launches B2B Luxury Marketplace for Online Retailers
With so many luxury brands finally including ecommerce as part of their larger strategy, luxury marketplaces like Net-a-Porter are seeing the immediate benefits of a growing demand for luxury online. In the wake of news last week that Net-a-Porter was acquired by Yoox, the parent company of Celine and Dior, plus Chanel’s announcement that the brand will move online by the end of 2016, new luxury marketplace Ordre.com fills a niche B2B luxury market.
Unlike Net-a-Porter or luxury brand-owned sites, Ordre.com is a B2B marketplace for luxury retailers. As of now, nearly 3,000 retailers across 93 countries have access to a new source of apparel fashions in Ordre.com, a marketplace featuring ready-to-wear designer apparel. Thus far, more than 20 designers have signed up for the platform including Chalayan, Emilia Wickstead, House and Holland and Jason Wu, and it expects to have apparel from as many as 60 designers loaded on the site within several weeks.
Indeed, B2B ecommerce is expected to top $1 trillion by 2020, and a strong luxury demand online may very well be the necessary catalyst to reach that projected growth.
Online Luxury Consignment Site Gets $40 Million in Series D Funding
The RealReal, an online luxury consignment store, secured $40 million in Series D funding on Thursday, April 9. This round of funding raises the company’s total funding to $83 million and reports confirm that The RealReal is poised to double its $100 million in annual revenue in 2015.
The RealReal was founded by Julie Wainwright, former executive at Reel.com and Pets.com, and began shipping out product in 2011. The RealReal is Wainwright’s first entrepreneurial effort, and quite a significant one given that many experts see the site seriously tugging away at eBay’s revenue.
“When I started in ecommerce, there was not a lot of clutter because there were not a lot of companies,” said Wainwright. “Nowadays, you have to have a pretty serious moat around your business to compete with Amazon, Wal-Mart and even Alibaba online. You really need a unique selling proposition and people need to care about that unique selling proposition.”
And Wainwright’s ecommerce company provides for just that. Her site offers a full-service marketplace where garments, bags, jewelry, art and other items are inspected and authenticated before being sold, all in an effort to authenticate the luxury item before selling it. The RealReal also has its own white glove service offered in 18 U.S. cities where luxury managers go to buyers’ homes, consult with them and then pick up their items.
The site offers its consignors 60-70% of the sale price, and then keeps the remaining portion for itself. As of now, the company is not yet profitable.
U.S. Consumer Spend About to Surge
Business optimism is up in 2015, but despite low unemployment, increasing minimum wages and low gas prices, consumers have been quick to save rather than spend during Q1. According to one research firm, however, that is about to change.
According to Bloomberg, Ian Shepherdson, the chief economist at Pantheon MacroEconomics, says that the jump in the savings rate is only temporary and that the next few months should bring a surge in spending. The firm cites a lag effect between low gas prices and their impact on the consumer.
“If we are right in our view that the lag between shifts in gasoline prices and the response from consumers is about six months — longer than markets seem to think — then the next few months should see spending surge.”
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