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Stephanie Phair Talks Growth for The Outnet

The e-commerce site's managing director said the Net-a-Porter division has rapidly evolved into a compelling stand-alone offer.

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The business for discounted luxury goods has taken on a life of its own — and there is more to come, said Stephanie Phair, managing director of The Outnet.com, a division of the Net-a-porter Group.

Phair said the original concept behind The Outnet was to be an outlet for last season’s stock from Net-a-porter, but the e-commerce site has rapidly evolved into a compelling stand-alone offer, with 120 employees based in three cities, and a service backed up by Net-a-porter.

“Very early on, we realized the outlet-only offer was not going to cut it — it just wasn’t compelling enough.…So we realized we had to supplement our stock. Today, 75 percent of our stock comes directly from over 250 brands, and is sourced by a dedicated global buying team.”

Phair said that in growing the site, The Outnet shunned the popular flash-sale model in favor of a dedicated Web site where shoppers could buy when they wanted and with editorial content to support the brands. In addition, The Outnet doesn’t pigeonhole clothing by season, but instead organizes looks by categories such as trend or occasion.

At the same time, she said, the brands have been evolving, too, and taking the discount channel seriously. “Brands started to realize they couldn’t pretend that side of the business didn’t exist anymore — and they had to embrace it.”

Phair said she sees The Outnet as a “long-term partner to the brands, not just a liquidation play. In the long term, I think brands will work out their supply chains — they are already. There will be peaks and troughs of stock, but they will start to realize…that this is another channel to create awareness around a customer, to capture a valuable customer.”

She also pointed to the launch of The Outnet’s in-house collection Iris & Ink, and one-off projects with brands such as Oscar de la Renta, where the designer created a capsule collection for The Outnet, reworking classic styles from archived fabric.

“It was truly a co-branded initiative and we delivered over $500,000 in media value for the brand, 400 press mentions in 20 countries.”

Mobile, she said, is increasingly important, and represents about 36 percent of the site’s sales.

“It makes sense within our business model: on the go, quick, get it now. We started with being mobile-enabled, and then we launched our app. For us, mobile is not a different channel, it’s just a different device. You have to be there for the customer — wherever she is.”

Phair added that internally, The Outnet team starts by designing its mobile e-mails first, and then works backward, designing for the desktop and Web site. She added that China offers a huge opportunity for mobile purchasing once brands and consumers can overcome local barriers such as the gray market and unauthorized vendors.