Mr Porter's Toby Bate­man on the fu­ture of the lux­ury e-re­tailer

Gulf Business - - FRONT PAGE - By Varun Godinho

The e- com­merce in­dus­try for lux­ury watches is be­gin­ning to boom. Lead­ing the charge is the on­line men’s fash­ion por­tal Mr Porter. Gulf Busi­ness speaks to its manag­ing direc­tor, Toby Bate­man, on the path he is tread­ing and what he in­tends to do with the lux­ury watch brands mak­ing a bee­line to the web­site

WHEN MR PORTER launched in 2011, it was a roll of the dice. Its el­der sib­ling, Neta-Porter, was over a decade old by then and its founder Natalie Massenet had just sold the women's fash­ion site to lux­ury con­glom­er­ate Richemont. The men's on­line shop­ping space was un­charted ter­ri­tory and there was no guar­an­tee that Mr Porter would suc­ceed. Hedg­ing his bets was Toby Bate­man, the firm's manag­ing direc­tor, whose task it was to get the pro­ject off the ground.

“We launched the busi­ness with 80 fash­ion and ac­ces­sory brands. By the sec­ond sea­son we grew that num­ber to 140, by the third sea­son we grew that num­ber to nearly 200. The one thing we had go­ing for us was Net-a-Porter as an older sis­ter and there­fore we had ev­i­dence that we could sell lux­ury items on­line.”

Early on, just as Mr Porter be­gan to get some mar­ket trac­tion by sell­ing ready-to-wear menswear, shoes, ac­ces­sories and groom­ing prod­ucts, it found a gap­ing hole in its port­fo­lio of avail­able cat­e­gories.

“If Mr Porter was go­ing to be a des­ti­na­tion for all el­e­ments of a man's wardrobe, we'd be miss­ing a vi­tal part with­out watches. It's like us not sell­ing shoes. That was the pri­mary rea­son that we got into the watch busi­ness in 2013.”

Re­cruit­ing lux­ury watch brands to come on­board, as Bate­man would soon find out, was far more chal­leng­ing than it was with fash­ion brands. “There hadn't been any prece­dent set for any­one sell­ing watches on­line in a suc­cess­ful, au­thor­i­ta­tive or bench­mark­ing way back then. It was an alien con­cept for the watch world,” he says.

Bate­man re­ceived his big break when Bri­tish watch­maker Bre­mont de­cided to be­come the first fine watch­maker to be listed on the site.

“That was a real leap of faith for them," he re­calls.

“They were able to take that de­ci­sion be­cause they are in­de­pen­dently owned. Hav­ing that brand en­abled us to demon­strate what we could do with fine watches as an item and a cat­e­gory.” While Bre­mont af­forded Mr Porter one foot into the door, it was the sign­ing on of IWC

un­der the then CEO Ge­orges Kern in 2016 that re­ally saw Mr Porter storm­ing down the front door. In­evitably, other ven­er­a­ble lux­ury watch­mak­ers from Pi­aget and Pan­erai to Jaeger-LeCoul­tre and TAG Heuer were keen to part­ner up.

In some cases, the men’s e-com­merce site bagged ex­clu­sive re­tail­ing rights to spe­cific pieces. Ear­lier this year, for ex­am­ple, Mr Porter was ap­pointed as the ex­clu­sive on­line re­tailer for the new Cartier San­tos watch. In ad­di­tion, Cartier also cre­ated a spe­cial steel ver­sion with a black leather strap of the San­tos that was made avail­able only on Mr Porter. Mont­blanc was another lux­ury watch brand that en­tered into an ex­clu­sive agree­ment with the com­pany.

“In April last year we be­came the global ex­clu­sive launch part­ners for the Sum­mit dig­i­tal watch. For one month, Mr Porter was the only place – on­line or off­line – where you could buy the watch,” says Bate­man.

Af­ter the mav­er­ick Ge­orges Kern took over Bre­itling in 2017, the watch­maker part­nered with Mr Porter to launch the Nav­itimer 8 ear­lier this year.

Mr Porter also en­tered the co-branded watch space with some of these lux­ury watch­mak­ers. Last year, there was a Ressence X time­piece lim­ited to just 12 pieces. Ear­lier this year, French-Swiss watch­maker Bell & Ross too col­lab­o­rated.

“Car­los [Rosillo] at Bell & Ross has been very en­thu­si­as­tic about e-com­merce of watches to the point where he cre­ated a spe­cial watch for us which he then launched in Basel ear­lier this year.”

By de­but­ing these co-branded watches, spe­cial edi­tion time­pieces, and web­site ex­clu­sives of­fer­ings, Mr Porter has struck a far smarter e-com­merce model than other on­line re­tail­ers. But it has one more ace – the cre­ation of watch editorials. That, says Bate­man, is one of the big­gest dif­fer­en­tia­tors of its busi­ness model.

How­ever, it couldn’t fol­low the same ap­proach to watch editorials as it did with its fash­ion editorials.

“We’ve been pro­duc­ing watch editorials ever since we’ve be­gun sell­ing watches. Most fash­ion brands launch new prod­ucts ev­ery week.

“Large watch brands might have only a dozen nov­el­ties for the year. So we needed a plat­form where we could cre­ate con­tent on a weekly ba­sis, us­ing prod­ucts that have been there on the web­site for quite some time. We change the con­ver­sa­tion reg­u­larly. So in sum­mer we’d talk about watches to take to the beach, in win­ter we’ll do sto­ries about el­e­gant dress watches and in Septem­ber we might do watches to wear to a job in­ter­view.”

Watch editorials also bring in an all-new breed of cus­tomers who oth­er­wise wouldn’t grav­i­tate to­wards fash­ion-first

If Mr Porter was go­ing to be a des­ti­na­tion for all el­e­ments of a man’s wardrobe, we’d be miss­ing a vi­tal part with­out watches"

web­sites. By talk­ing about the re­leases from SIHH or Basel­world, Bate­man says, the watch editorials pro­vides an en­try point to the site for a lot of men who are in­ter­ested in con­sum­ing watch con­tent but not nec­es­sar­ily in­ter­ested in what Gucci and Ba­len­ci­aga are do­ing week-by-week. “We did a sur­vey among our cus­tomers on how they buy a lux­ury watch, and 80 per cent said that the first thing they do is to search on­line. That's be­fore they look in the shop win­dow, be­fore they try some­thing on in the depart­ment stores or at the de­par­ture lounge of Heathrow air­port or JFK air­port. They first read on­line. This has be­come the norm.”

To in­dex all those editorials, the site re­cently launched The Lux­ury Watch Guide.

“That guide en­ables us to cre­ate a site within a site with its own nav­i­ga­tional sys­tems. When you go to the brand's page on The Lux­ury Watch Guide, you get not only the his­tory of the brand but an ex­pla­na­tion of the dif­fer­ent fam­i­lies within that brand – for ex­am­ple, what's the dif­fer­ence be­tween a Bre­itling Nav­itimer 1 and a Nav­itimer 8 or be­tween a Su­pe­r­o­cean and a Chrono­mat.”

Mr Porter has in­vested in con­tent cre­ation by shoot­ing all the orig­i­nal pho­tog­ra­phy of the watches fea­tured on the site – it ap­par­ently doesn't rely on press hand­outs of im­ages sup­plied by brands – and has put in place ded­i­cated ed­i­to­rial staff to pro­duce the nar­ra­tive con­tent.

“We are putting the watches in the con­text of a fash­ion­able out­fit. We are talk­ing about the brand, its his­tory, the move­ment, the craft and where the watches are as­sem­bled. And we are still sell­ing at full price and not dis­count­ing,” ex­plains Bate­man

Ded­i­cated plat­forms for watch con­tent are also a re­sponse to the way men specif­i­cally in­vest in lux­ury watches, which is dif­fer­ent from the way they do in fash­ion.

“Within the price range of say GBP3,000-5,000 ($3,830$6,383), cus­tomers have a dif­fer­ent ap­proach to shop­ping for watches than they do with fash­ion. With watches, they still need to con­sume a lot more in­for­ma­tion than with fash­ion be­fore they de­cide to buy a time­piece.”

Mr Porter's web­site to­day has 400 brands across all its cat­e­gories span­ning clas­sic, lux­ury, de­signer and con­tem­po­rary brands. As Bate­man points out, watches at the mo­ment rep­re­sent a very small per­cent­age of to­tal turnover.

“Typ­i­cally the en­try prices on the cat­e­gory we re­fer to as lux­ury watches, oc­cu­pied by brands like Oris, starts from around GBP1,000 ($1,285) and goes up all the way to GBP50,000 ($64,218) for say a Jaeger-LeCoul­tre per­pet­ual cal­en­dar in gold.” The Swiss watch in­dus­try can be painfully hi­er­ar­chi­cal at times. His­tor­i­cally, some of them would throw a fit at the very thought of be­ing fea­tured on the same page as a $100 fast fash­ion prod­uct. So how does the site counter that?

“The re­al­ity is that a guy could be wear­ing a GBP50,000 ($64,218) JLC watch to the of­fice dur­ing the week, but when he goes to the south of France for his hol­i­day, he puts on a Lu­mi­nox rub­ber dive watch be­cause he's go­ing be spend­ing time in the pool with his kids. That's the real truth of how mod­ern men are con­sum­ing and wear­ing things. They mix high and low price points and it's ex­actly the same with cloth­ing. We of­fer a GBP3,000 ($3,853) Brunello Cucinelli cash­mere cardi­gan on the same page as I will a GBP50 ($64) pair of con­verse sneak­ers. The same man is go­ing to wear both of those items to­gether.” In many ways, e-com­merce and the in­ter­net cre­ate a level play­ing field be­tween big brands that have mil­lions of dol­lars as mar­ket­ing spends and smaller niche brands that don't have those in­flated mar­ket­ing ma­chines back­ing them up.

“The in­ter­est­ing thing about on­line shop­ping is that the prod­uct is king. Many years be­fore I joined Mr Porter, I worked in de­part­men­tal store re­tail. In a tra­di­tional shop­ping en­vi­ron­ment, be it a mall or a depart­ment store, big brands

like Rolex, Gucci, Ar­mani or Bre­itling will al­ways dom­i­nate.

“On­line, the pres­ence we give to niche brands like Ressence or NOMOS Glashütte is equal to that given to IWC, Jaeger-LeCoul­tre or Bre­itling. All of them get ex­actly the same treat­ment, pho­tog­ra­phy, prod­uct de­tails and we are very demo­cratic in the way we se­lect items to fea­ture in our editorials. The re­sult is that you get rid of some of that big brand glow and cus­tomers end up be­ing grav­i­tated to­wards the best item – whether it’s a watch or a pair of trousers.”

Af­ter bring­ing any watch brand on board, Mr Porter sifts through the en­tire col­lec­tion and selects only a few ref­er­ences to fea­ture on its web­site.

“We would typ­i­cally rep­re­sent 20-25 per cent of a brand’s to­tal of­fer," says Bate­man.

“We pre-se­lect only the best brands and within those brands we pre-se­lect only the best ref­er­ences. Peo­ple will, there­fore, shop at Mr Porter rather than go­ing to a brand bou­tique and see­ing hun­dreds of ref­er­ences and not know­ing where to start.”

There are thresh­old mark­ers that the site uses when de­ter­min­ing which brands make it on and which don’t. One of the most im­por­tant, he ex­plains, is that a brand needs to bring some­thing new to the web­site.

“Men don’t have the pa­tience or the ca­pac­ity to see a num­ber of dif­fer­ent brands do­ing more or less the same thing, pro­duc­ing prod­ucts with sim­i­lar de­signs at nearly iden­ti­cal price points. That’s one of the big rules we fol­low on fash­ion and one we fol­low on watches as well.”

For the watches specif­i­cally, he adds that high-qual­ity brands that have prove­nance and her­itage – in other words, plenty of fod­der for the com­pany to craft sto­ries around – have a marked ad­van­tage over the oth­ers.

One of the legacy fac­tors that typ­i­cally slow the tran­si­tion­ing of cus­tomers from brick-and­mor­tar stores to the on­line space is con­cern over af­ter-sales. Bate­man says that they’ve got a ro­bust mech­a­nism to deal with this is­sue.

“All the watches come with man­u­fac­turer’s war­ranty, just as if you were to buy it from any au­tho­rised dealer. If you need a watch ser­viced, we’ll come and col­lect it from you, de­liver it to the brand to be ser­viced and then have it re­turned to you. Re­turns are free and we will come and col­lect them from you.”

In May this year, Richemont com­pleted a GBP2.4bn ($3.06bn) takeover of the Yoox Net-a-Porter Group un­der which Mr Porter and Net-a-Porter op­er­ate. This means the po­ten­tial to more fully tap key mar­kets like the Mid­dle East.

“Yoox Net-a-Porter has en­tered into a joint ven­ture with the Alab­bar Group to lo­calise our e-com­merce oper­a­tions in the next year or two," says Bate­man.

“You will be see­ing a lot more news com­ing through about Net-a-Porter and Mr Porter and in­deed Yoox and Out­net too on the mea­sures to im­prove our lo­cal ser­vice in the Mid­dle East.”

With the re­cent news of the world’s big­gest lux­ury watch con­glom­er­ate, the Swatch Group, ex­it­ing the world’s largest watch trade fair, Basel­world, spec­u­la­tion is rife as to the fu­ture of the con­ven­tional trade shows it­self. Bate­man is def­i­nitely not sound­ing the death knell for these watch shows, though he adds that there are mon­u­men­tal changes be­ing made to the way the watch com­pa­nies con­duct them­selves and their busi­ness.

“Things have dra­mat­i­cally changed in the last 24 months at fairs like the SIHH and Basel­world. Ear­lier this year when we were at the fairs in Jan­uary and March, I was in­tro­duced to a dig­i­tal direc­tor at ev­ery ap­point­ment I had with ev­ery brand. These are brands that as re­cently as last year did not have a dig­i­tal direc­tor.”

Mr Porter is also lever­ag­ing the in­flu­encer cat­e­gory, but as Bate­man em­pha­sises on the tone of that in­flu­encer bas­ket, he says, “Kanye West and Kim Kardashian aren’t part of it”.

Mr Porter’s ap­proach to so­cial me­dia in­flu­encers has re­sulted in the cre­ation of The Style Coun­cil on its web­site which is a net­work of 130-140 in­flu­encers se­lected by Mr Porter.

“The di­verse group of men have one thing in com­mon – that’s an opin­ion on style. Some of them are tra­di­tional in­flu­encers with large so­cial me­dia fol­low­ing, while the oth­ers are just re­ally in­ter­est­ing men from arts or de­sign or mu­sic or even from tra­di­tional busi­ness in­dus­try,” ex­plains Bate­man. With Richemont now the par­ent com­pany, it’s in­escapable for a greater num­ber of big lux­ury watch brands to come on board.

“We are launch­ing Vacheron Con­stantin on our site with the Fiftysix time­piece this Septem­ber. We will also be launch­ing Cartier across all their watch fam­i­lies on our site. We will be the ex­clu­sive e-com­merce part­ner for Vacheron, as we will be for Cartier.”

But just as Mr Porter has done from the be­gin­ning, it’s also go­ing to be root­ing for the smaller play­ers.

“Over the next few years, we will be launch­ing more niche brands within the watch cat­e­gory,” con­firms Bate­man.

An un­der­dog giv­ing other un­der­dogs a shot at the big time – what’s not to love about this story?

80% of Mr Porter cus­tomers search on­line be­fore buy­ing a lux­ury watch

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