Amazon might have set the tone for e-commerce, blazing the way as the everything store — but Jeff Bezos’ way isn’t the only way.
Just ask Michael Kliger, who has built a growing and profitable online luxury business at Mytheresa, winning in a category that has proven difficult for the Amazon machine to conquer. Kliger, who leads Mytheresa as chief executive officer, took the company public in January. For the year ended June 30, the firm logged adjusted earnings of 32.1 million euros as revenues increased 36.2 percent to 612.1 million euros.
Klinger revealed the key ingredients of his secret sauce in a conversation with London bureau chief Samantha Conti.
Related Articles
It’s not a complicated recipe.
You May Also Like
“A lot has to do with our focus,” said Kliger, noting Mytheresa sticks to carrying fewer than 250 brands.
He described that as something of a sweet spot and, “the right amount of brands to show that we are really focused on luxury.”
“We want to serve the multibrand, wardrobe-building customer,” he said. “This is a decision and I think any retailer has to make the decision: Which customer do you want to serve?”
That has the e-commerce site, which grew out of a boutique in Munich and was previously part of Neiman Marcus Group, orientated toward shoppers who are often out on the hunt.
“There are customers that buy a bag and won’t buy any luxury piece again for one-and-a-half years,” Kliger said. “But we decided we want to have the wardrobe-building customers. Customers that buy a lot of ready-to-wear. Our biggest category is ready-to-wear. This is a customer that is driven by occasion. They update their wardrobe as they have new occasions and we extended that from women’s wear to men’s to kids.
“This focus carries advantages in the business model,” he said. “The customer that repeatedly comes back has maybe a higher customer acquisition cost, but a higher lifetime value.”
Working with only a limited number of brands helps the company focus across the board — from its buying operations to the photo studio where product is shot. Having a tight-knit group of suppliers also allows the merchant to develop each relationship more fully.
“Writing an order is a collaborative process,” Kliger said. “We know our customer, we know what is selling well, but the brands know what they have developed…the new direction. We need both perspectives. The challenge — but also the opportunity — in luxury is you start with a fresh sheet of paper, you go into the showroom and then you discover.”
Finding just what will be right next is always the trick in fashion — and all the trickier in the age of COVID-19.
Kliger said the occasion business dried up for a time when lockdowns prevented gatherings, fueling sales of comfort at home categories including knitwear and cashmere. Now the tide has changed and heels and dresses are back.
But the company is also attuned to the underlying pulse of style.
“Before the pandemic, we entered into a next phase where savoir faire and material fabrication became more important than trend and marketing,” the CEO said. “We believe the pandemic is an overlay to this fundamental trend in consumer behavior.”
He said that was a “nuance, but an important nuance in fashion.”
That attention to detail and the subtle ways of fashion highlight Mytheresa’s brick-and-mortar roots and how it approaches business.
“It is a part of our DNA,” the CEO said. “As a boutique you always have to focus on customers, you have to make a clear curation.”
And Kliger, who joined the company in 2015 when it was a 100 million euro business, has used the modus operandi to drive a five-fold growth.
“We asked ourselves, Where is future growth?” he said. “Future growth is not by expanding the portfolio or looking for a different type of customer, but by staying focused, by going global. We were successfully serving wardrobe-building customers in Germany and Europe. And we felt there’s so much more market share, so many more customers to be gained in Asia, in the U.S. and at the same time we benefited from even more consumers moving their purchasing from brick-and-mortar to online.”
That doesn’t mean projecting the business out globally is quick or easy.
Asked in the Q&A session about China, Kliger said, “It is a market where it is quickly developing on one hand, but on the other hand is challenging.”
Fashion companies in general are still figuring out changes in China, where the government has cracked down on big tech, celebrity culture and more.
But Kliger said Mytheresa is connecting with consumers developing in the market.
“We’re really committing in earnest to this market, realizing it’s a marathon there, not a sprint,” he said.
Despite the go-go days of e-commerce during the pandemic, the same could be said of fashion’s better than two-decade march to the web.
Mytheresa itself made the jump across the physical-digital divide and now is helping consumers make the same journey, ready to serve them from anywhere.
“One reason to go online is convenience,” Kliger said. “Our customers are time constrained. It’s not that they don’t love shopping in stores. But in terms of priorities, how to spend their time, they’d rather do it in the evening at 10 o’clock on their couch rather than going out shopping.”
Kliger said Mytheresa is there, delivering not only “multibrand inspiration,” but also “convenience and efficiency.”
“You need those two elements together,” he said. “Because once a customer has decided on the product, then you want to have the fastest, the most reliable service, the minimum amount of interaction still needed.”
Focused and fast — the Mytheresa way.
MORE FROM WWD:
In Fashion: Amazon’s Plan for Growth
EXCLUSIVE: Beyoncé Hires Former Goldman Sachs Banker for Parkwood