In the latest sign of just how quickly consumer psychology is changing, Net-a-Porter yesterday sent an email blast to its huge customer database, offering a "discreet packaging service" to offset the conspicuousness and potential guilt associated with shopping in this, the most severe economic crisis in at least a generation.
Whereas previously the direct marketing email from the world's pre-eminent online luxury fashion retailer would have been accompanied by a strong, aspirational fashion image, the latest email features whispering women in a 1950's era photograph. The ad, while cleverly recalling the current fashion revival of the one-piece dress, focuses its message instead on the opportunity to continue to shop "and receive items in an unbranded recycled brown paper bag."
The move to the discreet strategy is even more noteworthy when one considers that the deluxe packaging usually offered by Net-a-Porter has generally been thought of one of the secrets to the success of the online retailer, and certainly one of the defining moments in its customer experience. Indeed, fashion magazines are currently running two-page Net-a-Porter advertisements showing nothing but the company's famous black boxes.
So why the abrupt change of strategy? The answer is clear: consumer confidence is at record lows. This graphic from the New York Times shows that American consumer confidence is at its lowest point since The Conference Board first began to gather data for its well-known survey more than four decades ago.
Earlier this week, Dahlia of Dualite in Montreal, left a comment here on BoF wondering if sensationalist media reports of the downturn have anything to do with these dramatic plunges in consumer confidence. I think it's pretty clear that media coverage does play a role in this, and certainly media businesses are driven by the need to sell papers, attract eyeballs, and generate clicks, leading to headlines raising the spectre of the Great Depression.
That said, having started to read everything in the news more carefully, actively seeking out information that goes beneath the scary headlines, I'm sorry to report that what lies beneath the headlines is even scarier.
From every corner of the globe, in every sector of the economy, key economic metrics are moving erratically, sometimes in magnitudes they have never moved before, within short periods of time that were previously unimaginable. Housing prices, TED spreads, stock market indices, LIBOR rates, consumer confidence, and many other important metrics for assessing the short-term strength and long-term health of our economy are out of statistical control.
As Larry Summers of Harvard University put it, this out of control "patient" needs to be stabilised first, and it seems the injection of liquidity and capital into banks has not yet done the trick. But, when this does eventually happen, there is a long road ahead to reconstruct and re-build the health of our shaken economic system. And until then, things are going to be very tough indeed -- and yes, even for the luxury industry.
The coming years may also require us to shed some of our long-held beliefs. The entire way we manage the global economy, and the various environmental, social and political systems that influence it, has got to be re-imagined for a world that is more connected and more rich, but also one which is more fragile, overstretched and unequal than ever before.
As for Net-a-Porter, like other retailers of both the online and offline variety, they can't have come out of the last few weeks unscathed. Rumour has it that the number one address for deliveries of Net-a-Porter products is the Goldman Sachs office in heart the City of London, where thousands of job losses have piled up in recent weeks, even at the venerable Goldman.
Then again, most of the dresses in Net-a-Porter's current capsule collection designed by Preen are sold out. It just goes to show that even in difficult economic periods, a stroke of well-timed and clever marketing, can still make users click and buy -- even if it is on the sly.