Voox: An overview and applications

YOOX Group has developed a niche in the online luxury good from a time in which many people thought this was a contradiction. For generations the luxury market focused on the brick and motor experience with world-class service. However, as technology has evolved and economic growth has generated more and more luxury consumers, the ecommerce luxury goods industry is exploding. Consumers expect the same service standards as they have become used to in the luxury goods market; however they expect these standards to be applied to new platforms. This requires significant effort from operations to uphold these standards as well as marketing because consumers have learned to block promotional messages and demand unique content.

Company Background

YOOX Group is one of the industry leaders in global Internet retailing that has formed strategic partnerships with many of the leading fashion & design brands to provide the company's online and ecommerce presence. The organization has established itself amongst the market leaders with the multi-brand stores yoox.com, thecorner.com and shoescribe.com, as well as with numerous mono-brand online stores all "Powered by YOOX Group" (YOOX Group, N.d.). The company currently has offices and operations in the United States, Europe, Japan, China and Hong Kong; however it services more than one hundred countries worldwide through over thirty customized brand offerings from different retailers and partners.

The founder and current chief executive of Yoox Group, Feberico Marchetti, was able to create a business that most people thought of as something of a contradiction which is the he sale of luxury goods online (Fairchild, 2014). Most people associate the luxury goods market with something of a full service experience that customers must experience first-hand. However, through the founder's vision, the group has been able to create a new ecommerce platform that targets the luxury niche for many popular luxury designers. Many of the individual websites offer unique shopping experiences such as being able to share your "social wish list" on social networking sites such as Facebook. Using this application it is also possible to view social media "friends" wish lists, baby, or wedding registries. Other unique features include the ability to view different individual artist designs that are hosted as well as celebrity "showcases" that offer content that cannot be found elsewhere.

Opportunities Analysis

YOOX is in a difficult position to further expand their company however there is also a lot of potential to increase the total market size by adding new target markets; especially in developing markets. Online and mobile shopping for luxury products has exploded in China, in addition to other developing markets where smartphone usage continues to accelerate according to a recent survey of 10,200 consumers in China which found that by KPMG that seventy percent of respondents said they use their desktop every day in order to purchase items or search for information on luxury products, while 60% said they use their smartphones every day for this (CFO Innovation Asia Staff, 2014).

More and more people in the market are using the latest smartphones to research products in the luxury industry and in China; in particular, the luxury goods online presence has leapfrogged the traditional retail channels for millions of consumers in these markets. Some consumers have purchased luxury goods from brands without ever stepping foot in one of their retail locations. As a result, a brands online presence has never before reached such significant importance in the business model.

Email is still the most popular and cost effective way to reach most consumers. However, this platform is predicted to continue to evolve in the future as various email service providers (ESP), such as Google, have been able to adapt filters to screen out various email sources from promotional sources. Many of the latest cell phone have email programs that automatically collect promotional material and compile them in a specified folder or send them to the spam folder. "We wanted to give our users more control over their inbox," said Alex Gawley who is a product manager with Google after the email giant first released their new software with smartphone "tab" features (Minsker, 2014).

Even though the digital media economy took over a decade to build and develop, it has reached a point in which there has been an exponential shift from desktop to mobile computing power. Even though it is clear that the shift has been occurring, digital advertising has had a considerable lag as it has tried to keep pace with the platform changes and it was not until around 2008 that industries that did business mainly through offline sales channels began to consider online as a branding advertising medium that could both build long-term brand equity and drive offline sales it (Fulgoni & Lipsman, 2014). It was during this time frame that advertisers began to release that online marketing began providing a better return on investment than traditional advertising channels.

Figure 1 - Total U.S. Internet Usage in Minutes (Billions) by Platform (Fulgoni & Lipsman, 2014)

Many organizations waited until the research was overwhelming before they started transitioning to the digital trend and were largely left behind by many of the early adopters. A similar divide has been predicted with regards to the movement of digital advertising from the desktop targeted content to mobile platforms and social networking. This has led to many social networking sites offering native ads which are integrated into the users' content in their sites (e.g., Facebook's "Sponsored Story" in News Feeds and Twitter's "Promoted Tweet"). This allows advertisers to ensure that their marketing message is presented to the target market in a manner that is harder to overlook and cannot be blocked with filters from different sources.