With the pandemic, consumers have turned en masse to digital technology to fill their closets, spurring the fashion industry to reinvent at breakneck speed. The whole online shopping experience has been transformed in just a few months, with luxury brands branching out into gaming, the rise of designer-clad avatars, and the emergence of a next-generation take on TV shopping in the form of livestream shopping. Diaa Elyaacoubi, CEO of the luxury accessories e-commerce platform, Monnier Frères, talks to us about this rise of digital and even virtual technology, and the many changes this will likely bring in the near future.
This fall, Monnier Frères unveiled a new visual identity and a revamped platform. Why were these changes made?
Our ambition is to become the player that best targets these new generations of consumers -- namely Gen Z and Millennials -- through luxury accessories, as this is the product that represents the first luxury purchase of a young person in their twenties. In Asia, this generation, which consumes mostly online, is starting to seriously weigh in the balance, and is starting to shift revenues from stores to digital. We are also beginning to see this phenomenon in the West. It's the march of history. There is no turning back. Monnier Frères is in an advantageous position to target this population because you have to be a tech company, be extremely agile, and have the ability to integrate new technologies and new trends very quickly -- which we do. In the next few weeks, we will, for example, launch the whole cryptocurrency side, i.e., digital fashion and NFTs, just as we have already been able to integrate our first avatar and livestream shopping event with real influencers. We have to be ahead of the curve and on the cutting edge of technology to launch all these initiatives that appeal to this generation.
How are fashion and technology now inseparable?
Simply because there's more and more talk about this virtual world that is emerging, and which is causing a real sensation among the younger generation. Young people switch from the real world to the virtual world with such agility, such ease, that it is obvious that the fashion industry has to keep up. To be able to reach this new generation, which is more and more digital, more and more into cryptocurrency, the virtual, and gaming, fashion today must be directly linked to technology. Luxury and digital, but also luxury and cryptocurrency, are going to become mainstream things in a few years. If in five or ten years, we are not able to offer them an experience in these new virtual worlds, we will fail to win them over. That doesn't mean we have to choose between the virtual and real worlds, but there will be more and more bridges between these two worlds.
Aren't you afraid that virtual products will eventually replace physical products to the point of impacting your sales?
It won't be about choosing between one or the other. There are indeed many young people who spend a lot of time on social networks and who like to dress their avatars with clothes from big brands. But it's not going to replace physical products, it's a complementary thing. Sneakers are not a substitute for handbags or smart shoes, even though they are ubiquitous -- it's exactly the same thing. We will buy virtual sneakers as a complement to our regular clothes. At Monnier Frères, we must be able to meet the expectations of this new generation, to attract their attention, and to show that we understand them, while continuing to sell products that people dream of and contributing to the reputation of French chic around the world. This is one of our objectives.
How has the pandemic accelerated this transition into the parallel worlds we call the metaverses?
The pandemic has accelerated digitalization in many fields. In luxury goods, the online penetration rate has gone from 11% in 2019 to 22% in 2020. We have gained five years of acceleration in one year. And, of course, young people who have been stuck in front of their computers for months -- bearing in mind that they are already highly connected -- have made certain usages boom, including gaming and, more broadly, everything related to the virtual experience. These virtual worlds -- just like cryptocurrency -- have grown since covid-19. We know that there are always major upheavals in uses and consumption when there are major crises, and the pandemic has been a huge catalyst for many movements and trends that were relatively tentative before.
You have also experimented with livestream shopping, which has taken off massively in Asia. Is this phenomenon likely to take off in Europe too?
Livestream shopping is expected to represent 80% of e-commerce in China within a few years. It's a new way of consuming, of having fun. The phenomenon is such that it is even creating new stars called 'masters of ceremony' -- men and women who not only have a flair for sales, but also for storytelling and the ability to create trust and desirability with these new audiences. What is happening in Asia is happening in Europe and the United States. Young people need to be engaged, to be involved, to stay connected with fashion industry players, in order to proceed to making a purchase, and livestream shopping meets all these expectations.
It's effectively a modern version of TV shopping. So is it a step forward or backward?
The best models are those from history, and which therefore already exist, but the format changes. There's something reassuring about the fact that we're not reinventing everything, but that we're making the format evolve. With technology, home shopping is becoming extremely interactive. People can ask questions online and buy instantly. When we do our shopping livestreams in China, the sales volume per session is impressive. The TV shopping format -- which was outdated because it was linked to television, a technology from the '50s and '60s -- has become attractive because it is now a more appropriate, more modern format. Our livestream shopping in Europe with Léna Situations generated a lot of reactions and questions. Nobody was bored. Young people loved the storytelling -- a 2000s teenager's room with gadgets from the time -- but also the MC, of course, and the interaction from start to finish. It's great because everything needs to be built from the ground up. There's a whole new set of jobs that are going to emerge with shows based on livestream shopping, but also new stars, and audiences that are going to build around that. That's why Monnier Frères positioned itself as early as possible with the experience we have in Asia, and little by little we are understanding how to build these formats and how to host them.
After livestream shopping and cryptocurrency, what will be the next big thing in fashion tech?
There are many things, but there's plenty of time to talk about those (laughs). It will, in any case, be a continuation. There's livestream shopping, avatars, gaming, NFTs, virtual worlds that are starting to appear, and the emerging creation of new shopping communities. That's what we're interested in and what we're working on. So it's a little early to talk about the next disruptions.
What will the online shopping experience look like in 10 years' time?
It will be pure entertainment, in the spirit of livestream shopping. We'll get together virtually with our friends to learn how to wear a particular garment or accessory, or to buy a product. We will have physical meetings with a digital event or activity in parallel. We will, of course, follow livestreams and interact, and there will probably be gaming around these livestreams. This will not stop people from buying in a more traditional way, but there will inevitably be new channels centering around entertainment.